How Service Retention Influences Car Sales

Customer retention. Customer loyalty. Repeat business. Whatever you call it, it’s what every brand is after. In today’s highly competitive car buying market, the service department is the linchpin in a dealership’s quest for loyal customers.
According to a recent independent survey of in-market buyers, 64 percent said that a service department’s reputation was an influencing factor when choosing where to purchase or lease a vehicle. And more than half of new car buyers said they sought out service department reviews online before deciding where to purchase.

Every time a customer returns for service on their vehicle, they’re handing you an opportunity to engage with them one-on-one, get to know them on a more personal level, and cement the customer-dealer relationship.

When the service department does its part and delivers a great service experience, you create satisfied, loyal customers and can dramatically influence their repurchase intentions.
A new car buyer’s relationship with your service department should begin during the purchase and delivery process. With a simple introduction to the service team by the salesperson, your dealership can capture customer service intentions and eliminate the competition—before the customer drives away.

Dealerships that focus on offering service solutions and prepaid maintenance plans, especially in-house PPM plans that drive traffic back to their specific stores, will see increased vehicle sales and leases, increased customer loyalty, increased dealership brand loyalty, and increased referrals.

Customer loyalty and reward programs go hand-in-hand with maintenance plans in terms of customer retention. Customers enrolled in these programs visit their dealer’s service department nearly twice as often and spend twice as much as non-enrollees. They also repurchase more often at dealerships that reward their patronage.

For lease customers, equity mining tools enable dealers to root out current service customers who have positive equity in their vehicles. The software matches interest rates, factory incentives, and residual values to new vehicles and leases for customers that net out at about their same monthly payment.

Many of these service customers are reaching milestones in their vehicles and are likely unaware they have equity that could be put toward a new vehicle. Positive-equity customers are flagged for follow-up with customized and relevant sales and service opportunities via e-mail, text, or phone, or they are tagged when they bring in their vehicle for service or routine maintenance.

Equity mining gives dealers the ability to build out their customer databases by vetting all service customers, including those who leased vehicles from other dealerships.

Anytime you can jump start a lease turnover, the life cycle begins again and virtually all departments in your dealership benefit, especially Finance & Insurance, which then pulls the trigger on selling extended warranty and service contracts and other ancillary products and services.

Today, customer loyalty and retention starts long before a customer sets foot in your dealership showroom. Customers are casting an ever-widening net, researching extensively online, comparing costs and services from multiple dealers, and seeking out friends’ and peer reviews on social media.

Dealerships have to focus on building trust in their brand by transforming the overall customer experience, starting with the very first interactions online through the life cycle of vehicle ownership and repurchase.

Dealers who use the tools, technology, and processes at their disposal to interact with customers in personalized, relevant ways will be the most successful at getting customers in the door. Service keeps them coming back.

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