Struggles Dealers Face in Customer Retention
Stiff competition is a struggle many dealerships face in customer retention. The automotive market is super competitive, with many dealerships competing a customers’ attention. In 2022, the US automobile industry sold approximately 13.75 million cars and light trucks, according to Zippia. Customers have options on which dealer to purchase a vehicle from, making it a hurdle to retain them in the face of competitors’ aggressive marketing tactics.
- This Price is Right
Many customers are easily swayed by low price because they don’t see their current dealership as their service provider for all their automotive needs. Forty-four percent of consumers say they stay loyal to brands that offer great value for money. Make sure that you are letting your customers know the value of sticking with your dealership and its services! - The Competition is Fierce
Some dealerships don’t go the extra mile to make a customer feel special and provide a good experience. Whether it’s a bottle of water at the front door or a text reminder of their next upcoming appointment, small touches that are aimed at making a customer’s experience easy are a competitive edge that every dealership needs. - There’s No Post-Purchase Engagement
If a customer buys a car from your store and they never hear from your dealership again, you’re doing it wrong. Customers should know by the time they walk out of a dealership with the keys that your facility is there to service their vehicle, answer their questions, and provide them with additional protection when the factory warranty expires. Customers aren’t likely to return to a store that they don’t see a value-add in.
Acknowledging these challenges is the first step to building a lasting connection with customers in the automotive industry.
How Dealers Can Build Customer Loyalty
There are many excellent ways your dealership can rise above common customer retention hurdles and build customer loyalty. Being consistent and genuine in every customer interaction and experience is key.
- Deliver Exceptional Customer Service
Providing remarkable customer service should be a priority in building customer loyalty. Seventy-five percent of American consumers admit they’re likely to be loyal to businesses that understand them, according to an Acquia Survey.The team at your dealership should be knowledgeable to answer all customer questions. Second, you should be courteous and attentive to their needs. And lastly, be transparent and respond promptly to their queries. - Regularly Communicate with Your Customers
Keeping in contact with your customers after a sale is key to getting them to return to your dealership. Capturing contact details, such as email and phone numbers to send them useful newsletters, promotions, discounted offers, and informative content like new vehicle models and parts is essential to streaming information to your customers. In addition to emails and SMS, you can leverage social media’s power to stay in touch with them. According to an Ebbo report, engaging with individuals on social media increases brand loyalty and encourages customers to interact more. - Provide Post-Sale Service Information to Your Customers
Dealers should provide comprehensive after-sales support to build customer trust and loyalty. Maintenance reminders, service notifications, and regular follow-ups are excellent ways to provide post-purchase customer support. You can also use this as an opportunity to market products such as vehicle service contracts and GAP to your customers. A Voxco study reveals a successful post-purchase experience increases customer retention. According to the study, a post-purchase lifecycle allows brands to develop a lasting relationship with customers.
Rev Up Customer Loyalty for Your Dealership
Customer loyalty isn’t built in a single transaction; it’s earned through every engagement that follows. Dealerships that prioritize consistent communication, exceptional service, and post-sale engagement will be the ones that stand out. When customers feel understood, valued, and supported, they are more likely to return for service, protection products, and their next vehicle.
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