Every dealer knows they want better retention. Constantly spending an average of $700+ per vehicle sold in advertising is just not feasible anymore with the industry seeing shrinking profit margins. So, what is the solution? A robust Retention Program is the primary answer to this question. When customers engage with the service department, after the sale, and maintain this relationship throughout their ownership, they are far more likely to return to purchase their next vehicle. In fact, about 85%+ will buy from the dealer that services their vehicle. Let’s dig a little deeper into some of the benefits to the dealer and the customer.

First, there is no direct advertising cost for this sale, so the impact of shrinking margins is mitigated. Second, this customer has developed a positive relationship with the dealership and salesperson so the transaction will be quicker, easier and result in a higher profit and CSI. Everybody wins!  The customer gets in and out of the dealership quickly and has a buying experience based on trust and confidence. This is greatly different than what a new customer might normally experience. Customers, salespeople and the dealership all win in a repeat sale. The factories have realized the importance of better retention and are incentivizing dealers. Stair-step programs are evolving from CSI to retention programs.

Imagine these two scenarios. Dealership A has 100% CSI and 35% retention. Dealership B has 90% CSI and 80% retention. Which store would you prefer to own? With CSI surveys customers vote with their pens. With retention programs they vote with their wallets. It is clear that dealership B will realize greater gross profits. How important is a CSI figure really? A very small percentage of customers will fill out the survey so the sample set is small compared to the entire customer population. In a scientific study CSI results would not be considered statistically representative of the entire customer population. Retention Programs on the other hand, take into account every customer every time. Retention Programs should get “the lion’s share” of your attention.

So, we know we desire better retention, but how do we achieve it? The era of the CRM has driven a wedge between dealers and customers. Automated emails and template letters and birthday cards with printer addressed envelopes only show our customers that we don’t care about them personally, who they are, or their needs. If you are doing this, STOP. Every person I know gets these types of correspondences from their current and past insurance agents, realtors, dry cleaners, gym, and anywhere they spend money. This is a waste of time for you and the customer. This will not make you stand out from the crowd, but be firmly planted in the myriad of businesses with people who don’t care. Customers are numb to this type of message. It is going to take some effort to reengage with them.  It is going to take establishing a new way of doing business, a new culture!

Handwritten notes and phone calls work best, and when combined with a managed retention program and are a recipe for success. Retention programs are not new. They have been around, but never have they been so crucial to your success. Jaust as the CRM systems helped to take the best practices of the few and spread them across the showroom, a good retention program will ensure your dealership achieves results like the best dealerships in the country and exceed industry-accepted standards.

Now I am not saying that there are not dealerships out there that can achieve good retention numbers on their own. I am saying that there are not very many. Everyone working in the dealership is busy. In fact, in most cases too busy. Whether this is for real or just perceived is for a future article, but we can agree dealership personnel, and especially management, don’t have time to take on any huge new responsibilities. Only 2% of service directors train and mentor their people beyond factory content. Do you need another project?

Seek out a retention partner with not only the technology, but also the processes and training you will need to succeed. This partner will help you keep your focus on attaining higher retention results. They will train your people and show your management how to hold employees accountable. Bonus structure changes are an effective way to get your staff focused on retention. The days of giving a little free stuff to angry customers that will never return are over. You must preach customer experience. Retention is the result of positive customer experiences. With the right tools your people won’t rebel, they will embrace your retention program. Who wouldn’t rather work in an environment with happy repeat customers? Find a retention partner that makes training, daily use and admin easy.

You ask yourself “where can I find a retention company that has the experience, record of result that can assist me with putting together a customized retention program for my brand and that will partner with me in seeing that it works”?  Look no further than Dealership for Life, a 17-year-old company that is the very best in industry.  Contact Dealership for Life to get started today!

If you do your job right increased retention and yes-even improved CSI scores will follow.


















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Roy Olive