The cost to acquire a new automotive retail customer in 2015 was $633, according to the NADA Data Report, and that is about 10 times more than it does to retain an existing customer. Given the choice, most dealers would opt for keeping their existing customers happy, loyal and coming back.
The far less expensive and far more attractive option is, of course, very challenging. There’s a variety of reasons for this, and for car dealers, and most retail business too, there’s some hard truths they must accept. Here’s some facts you may not like hearing.
Consumers don’t trust businesses anymore, and the way in which they interact with them has changed. According to 2018 HubSpot Research study:
Sure, it’s easy to say consumers may think this in general terms, but “They don’t think this about my dealership.” “We perform at a high level.” “We deliver world-class customer service.” “We have great reviews.” “We have many repeat and referral customers.” All that can be true, and so can those earlier bullet points.
Think about how you use the internet, your expectations for service at a fine dining restaurant, or what you have come to expect from major online shopping services. There’s a whole set of experiences you have had that have set a high bar for what you consider excellent customer service.
Now think about your interactions in calling your cell phone or cable provider, a public utility, or a credit card company. There’s another set of expectations you may have. Difficulty talking to a human being to register a complaint or concern, long hold times, confused orders, payments not credited properly, are just a few of negative experiences we have. All these would be deal breakers with most retail businesses, but we often remain with these companies. Long-term contracts and limited competition often keep us from finding new, more customer-friendly companies.
In other words, you may do business with someone and not trust or respect them. It may keep some in business, but the times are changing — especially in the automotive retail sector. Younger consumers, and many older consumers as well, are simply not as brand loyal as customers even 5 years ago. Average automotive loyalty has dipped to just 51.5 percent — one out of every two consumers will go somewhere else when it comes time to replace their vehicle.
We know that keeping a customer is far less expensive than acquiring a new once, so how do we go about doing it?
Again, think about your best customer service experiences. If you’ve been to a Ritz-Carlton Hotel, you’ll note that every employee who comes within 10 feet of you, will greet you with a kind word or at least a smile. If there is a problem, the employee is empowered to stay with you until the problem is rectified to your satisfaction.
Think about that fine dining experience. A high-profile restaurant will take your reservation and have your table ready when you arrive. If you are a regular customer, you will be greeted by name, and seated in your favorite locale. Your preferences are noted, and you will may be given “off-the-menu” options.
Now think about your online shopping experience. Top-tier online stores like Amazon, which allow you to put in all the necessary information to facilitate “one-click” purchases. All pertinent information about your address, delivery preferences, and preferred payment options are easily collected, stored and protected. Over time, you are reminded about regularly purchased items, you can set up recurring purchases for consumables such as pet supplies, personal hygiene items and more. In a word, the successful online stores have made your experience with them “convenient.”
Now, combine what you know about the Ritz, the fine restaurant, and top online outlets, and what you have is a recipe to increase customer retention and build brand trust and loyalty. This isn’t an “I’ll do it later” task. Millennials demand this level of convenience and customer service, and right now they represent about 30 percent of all new car buyers, and in just two more years, by 2020, they will represent 40 percent of new car buyers.
Designed by and for auto dealers, Connected Dealer Services (CDS) has developed a proven solution. Elo GPS is a connected car app that assists dealers in connecting with their customers in a personal and professional manner that can foster increased loyalty.
The CDS service starts out as an inventory management solution that allows dealers to take charge and manage their for sale vehicle inventory as well as any logistics and fleet vehicles. The low-cost, easy-to-install hardware is attached to all vehicles, and data is wirelessly sent to the cloud over a 4G LTE network, and accessible to managers using any mobile device. There they can locate any vehicle, track demo rides, and recover stolen vehicles. This facilitates consumer transactions by allowing vehicles to be located faster, reducing the time of the sales transaction. It becomes a powerful tool. Managers and their sales and service teams can use this tool overcome the challenging logistics of operating a large, modern new vehicle dealership.
The device remains on the all vehicle and becomes a valuable add on, Elo GPS, for consumers who like the idea of having greater connectivity with their vehicle and the dealership. Consumers can download an app, and with a few simple clicks, have access to useful information about their vehicle. Your customers can then immediately get information about where their vehicle is and get notifications for excessive speed to help keep younger drivers safe.
Here is where it becomes a tool to keep them loyal and coming back to your dealership. The Elo GPS app notifies the consumer and the selling dealership when service mileage milestones are reached. This allows the service center to notify their customers of discounts on the required maintenance or packages that better serve their needs. They now have incentive to return to your dealership for service. Also, when Check Engine Lights are triggered, both the dealership and the consumer are notified. Service advisors can contact the customer and take a proactive approach to rectifying the situation with as little disruption to the consumer as possible. In the next few years, the power of the Internet of Things and connectivity will only grow in prominence and usefulness to consumers. They will expect and demand service that goes above and beyond what is considered “good” and demand what is “great.” And wait until you see the next generation of CDS and Elo GPS!