Customer loyalty takes on numerous meanings for different brands. Sports teams have a tremendous amount of loyalty from fans. Look at the upcoming MLB season and every team and fan believe this is the year for their team to win it all.
Another industry with a unique and loyal customer base is coffee. Consumers will go out of their way to pick their favorite coffee.
In our Kansas City office you will hear conversations about loyalty to BBQ and what makes each one different (by the way it typically comes down to sauce.) [Ed. Note: partially, but we can debate that elsewhere later.]
To simplify and keep this in the Automotive industry let’s define Customer Loyalty as a measure of how likely your customers are to do repeat business with your dealership, group or brand.
The benefits of Customer Retention and Brand Loyalty greatly outweigh all other marketing endeavors. You will have higher front and back grosses. The vehicles traded in by your customers will sell faster on your pre-owned lot. This in turn saves you thousands from auction costs, shipping and floor plan costs. You have existential benefits such as higher CSI scores and positive reviews by your loyal customers. Given the benefits, the big question to ask yourself is “why I do not pay more attention to Customer Retention?”
The next area to focus on to increase Customer Retention is analysis of your previous sales patterns to first time and repeat customers. Recent data from NADA shows it costs a dealer $650 to sell those customers. If you multiply by your database count, your total portfolio of opportunities will cost in the millions. Data mining will help you find patterns that allow you to increase purchase frequency by offering those customers benefits that fit their needs at just the right time.
Technology updates, new body styles, and competitor vehicles make it harder to keep your customers loyal to the brand, but statistics show implementing an upgrade process earlier in the lifecycle increases customer retention and brand loyalty. This can be difficult for dealerships to implement. Tools such as a Customer Experience Platform (CXM) can automate the task and help you learn about your customers’ shopping patterns. Let your team know when customers you have sold are In-Market and looking online or if they are at a competitor dealership. Given the highly competitive automotive landscape today, customer experience programs are the most effective way to differentiate your organization from the competition. Such differentiation drives loyalty by engaging customers with your dealership.
Retaining customers is much less expensive than acquiring new ones. Customer experience management is the most cost-effective way to drive customer satisfaction (CSI,) customer retention and ultimately customer loyalty. Are you using the right tool for the task?