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The Importance Of Customer Retention

Written by Carrie Cadwell | Dec 15, 2016 8:10:24 PM

A good sales strategy always stresses the importance of customer retention. When sales are down, this component takes on even greater significance. Sales staff should strive to maintain an engaging relationship with customers after the sale. When the market experiences a decline, competition gets stiff. You want existing customers to already feel appreciated and confident in how your brand stands out compared to competitors.

Profitability Of Customer Retention: Sales staff who have focused on customer retention are more successful overall because they have cultivated strong relationships with the goal in mind of a complete customer lifecycle. They are meeting service needs until a customer returns for another purchase. Research by Harvard Business School indicates that even retaining only 5% of your customer base can lead to higher profits of 25-95%. The key to success is navigating the transition after the sale. It's easy to know what a customer wanted when they arrived at the dealership. What will they want after the sale?

Developing A Loyalty Strategy: Getting customers to come back for the service needs of their purchase is the foundation of customer retention. This provides repeat opportunities to cultivate customer satisfaction and grow the reputation of your dealership's brand. Offering a loyalty program after the sale is a proven customer retention strategy. Market research reports that 81% of consumers are more likely to remain engaged with a business offering a loyalty program.

These are also the type of consumers a brand can build further success upon. 73% of these customers will likely recommend your business to others if they are satisfied with your service. These are the two most important numbers that prove that:

  • Customer loyalty programs drive sales.
  • Customer loyalty programs expand a dealership's customer base.

Keeping It Personal: Keeping customers interested and loyal means engagement on their terms. Data indicates they like relevant, up-to-date information and enjoy the novelty of new things. Today's consumer prefers their updates via mobile media that is personalized. For more information on the best practices for customer retention, partner with retail experts who concentrate on current industry data to develop successful sales strategies for greater profitability.