Dealership Development, LLC Blog

Every business owner and manager is aware of how important it is to acquire customers, but we sometimes forget how important it is to retain them. Obtaining customers is one part of growing a solid customer base, which is essential to any company's success. When it comes to long-term success, organizations that learn how to retain customers have an edge. The estimated cost of getting a new customer is 5 to 25 times the cost of retaining an existing client once you have acquired one.

Consumers and marketers often mistakenly perceive Vehicle Service Contracts (VSC) negatively, believing that extended Vehicle Service Contracts increase revenue and profits while providing little advantage to the consumer. But recent research seems to dispute this perception, instead showing that consumers who obtain service contracts have increased loyalty to a brand and the retailer.

When it comes to gaining new customers, the costs can add up. You have numerous forms of advertising to get the word out about your company. You also have sales and promotions that get customers in the door. However, what if your existing customers are so thrilled with your service that they come back and invite their friends? These loyal customers cost substantially less to obtain which means higher profit margins. That is where you need to focus your dollars! So, what goes into a successful customer retention program?

Automotive compliance is a huge issue for car dealerships because you need to stay on top of what the government requires for your business. But it can be stressful and even overwhelming to deal with on your own. That’s why we at Dealership Development don’t want you to do it alone! We are here for you and we can walk you through automotive compliance every step of the way.

Being a service manager for a car dealership can be both stressful and rewarding. But how often do you take a good look around? We want you to take a moment and help yourself. Here are some quick key things to watch out for to ensure your service drive is running smoothly.

1. How Does It Look?

Appearance is everything when it comes to your car dealership. If your customer sees that your dealership is dirty, disorganized, or just unappealing, they are unlikely to 

Consider how your customers are going to buy from you in the future. Pay attention to technologies coming down the pipeline and newly emerged e-commerce platforms. Having a customer-centric business is all about understanding how to give your customers a great experience now and in the future.

How do you plan to compete or outshine other businesses in the coming years? You may need to add additional services and products or open your business to a different market. For example, the cosmetic industry has experienced the merging of personal care products and makeup.

In order to make sure your sales team is serious about making your dealership successful they need to be armed with the right tools. The following are a few training tips that will get your team motivated to sell, retain customers, and upsell contracts while adding some value to your business.

A Listener Is a Closer

A sense of hearing is the most important sense a salesperson can cultivate. They need to listen to the customer and not just 

You know how dynamic the automotive industry is, and you thrive in that environment. You love talking to customers, explaining options, and helping them choose products and services that will give them a great ownership experience. If you have automotive experience and this describes you, we want to talk to you. Your exceptional skills are in demand and we can guide you to multiple high-paying opportunities.

Customer retention is crucial to the success of any business. This is even more true in the automotive industry, where dealerships rely heavily on the constant revenue created by service plan subscriptions to supplement the somewhat unforeseeable revenue generated by auto sales.

Consider these facts. Marketing metrics show that it is 6-7 times more expensive to sell to a new customer than an existing one.  It is 50% easier to sell to an existing customer than to convince a prospective customer to choose your dealership. Marketing research proves that it is just as import to invest in customer retention as it is to invest in customer attraction.

Having a robust aftermarket program is critical to automobile dealerships. In 2016, the National Automobile Dealers Association (NADA) found that aftermarket income represented almost half of the new and used vehicle department’s gross profit. Finance and insurance (F&I) were 25% of the profit while service contracts and other amounted to 24.4%. However, organizations such as Consumer Reports warn consumers against aftermarket sales. Therefore, it is important that aftermarket programs supply a win for both the buyer and the dealership.