Retain them….or lose them….

17 Aug

Let’s review some Customer Retention….facts…

These statistics are directly from NADA, the National Automobile Dealers Association…

Ninety percent… and I repeat…

Ninety percent of a dealership’s advertising budget… is spent attempting to acquire a NEW or Pre-Owned vehicle customer.

While the remaining 10 percent of the budget… is spent in the Service and Parts Departments.

Considering that the average dealership spends $384,000 per year…on advertising


This means that the average dealership only spends $38,400/year on retaining its customers.


That statistic is disturbing.

The easiest and least expensive customer to sell to… is the one that has already bought from you.

The auto industry… is working too hard and spending too much money… constantly trying to acquire new customers…

And while acquiring new customers is VERY important…

They already have thousands in their database… that are theirs to keep once they develop the right retention plan.

Now…the average new vehicle customer…according to NADA… is keeping their vehicle approximately 40 months before trading it in…

AND…Regular service customers are 17 times more likely to buy their next vehicle from their servicing dealership…


17 times more likely!!


Not twice as likely…or 5 times more likely…17 times more likely!!!


Did you also realize that 30% of YOUR customers…have a friend or family member that will purchase a vehicle in the next year?

Wouldn’t you like to have an opportunity to sell a vehicle to those people??

Very few dealerships track their marketing & retention efforts.

Most cannot tell… with a definitive answer… what is working and what is not.

More often then not, they do the same thing year after year.

That fits my favorite definition of insanity — “Doing the same thing over and over again and hoping for a different result.”

So …what measurement instrument are you using…to track customer retention??

If you have to stop and think about it…you probably are not tracking it very well…

Is the Service and Parts Departments using specific operations codes to track your marketing efforts??

You can be very specific with these operation codes to help you track what is working and what is not…

Are you offering any special incentives to your customers to remain loyal??

You don’t need to give away anything to keep your customers loyal…

All it requires… is a little attention… and a little consideration…isn’t that what we all want??

There are countless ways to retain your customers…but you need to manage and measure these ways…

No program is good or bad …until it is measured…

Investing in retention… it’s an investment in the future… and cannot be underestimated.

So if you haven’t already… I strongly encourage you to take retention seriously.

Adopt a program to help you achieve results… and measure and track how the program you choose… works for you.

If not, you’re losing money to your competition.


About the Author: From a Salesperson to a Dealer, I have a vast amount of experience in all areas of the automotive environment.

You can follow me on:

My website:  

Twitter: @jimkristoff

WordPress blogsite:

Blogspot blog:

Automotive Digital




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Posted by on August 17, 2011 in Archive of all blogs


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