The Answer to Customer Retention

Hi everybody, Chris Collins here, and Mario. This video we want to talk about the answer to customer retention. And in our industry, the thing that is really important is that sales department sells a car and then we try to retain them in the service department. Hold on to them through the life cycle of their car and then when they’re ready to trade the car in and get another car, we hand them back to sales. They buy another car and then come back to us in service.

We call it the circle of life, really, in our industry. That’s what it is. It’s a really important thing and it drives the dealership to profitability and drives the success of the dealership if the service department is holding on to retention. Because you know, a customer seventeen times will more likely to buy their car from that dealership if they regularly service their car. That’s strong. Seventeen times.

So if the service department is holding on to their customers, the dealership is just going to sell cars by default. They don’t have to advertise as much in the front end, they’re going to be more profitable and more successful just because the have that built-in traffic. And that’s the key in our industry to success in the dealership, are fix-ops holding on to the customer and to retention.

In my new book the Millionaire Service Advisor, the Collecting and Caring Customers, I tell a story in there about my rich uncle. My rich uncle is just an analogy. I talked about my rich uncle who bought me a new car. I told my rich uncle that I wanted a house, and he bought me a house. I just call him and say, “Hey Unc, I want to go on vacation.” He’s like, “Where do you want to go man? What do you want to do?” I’m like, “I think I want to go to Cabo and spend half a million.” He said, “Okay, I’ll handle it.” And he handles it.

And you know who my rich uncle is? My rich uncle is my customer base. That’s who my rich uncle is. Your customer base as a service advisor makes you all of your money over time.

We have some facts here. We kind of did a little number crunch for you that you work 50 weeks a year, so you’re taking two weeks off. You work fifty weeks a year and you connect with three customers a day on a deeper level. So you connect with them, you learn about their kids, you know where they work; you know what’s going on. And those customers come back just to see you, that’s 750 customers a year in your database. In five years, you have 3,750 customers.

It is possible for the advisor to connect with three customers a day, right? It’s pretty easy. So three new ones a day, that’s 3,750 customers in five years. Now, let’s say an average customer paid ticket, and this is an old NADA stat, is 208 dollars. So the average customer paid ticket in our industry is $208 which seem really low, but were going to use low numbers for this, is $780,000 customer paid if the customer comes in just a couple of times.

So service advisors that have high retention, after a while, you just have to work your database. We’ve seen it right, advisors that are just helping customers that are asking for you. We’ve seen advisors where customers won’t go to anybody else. You have an example for that, right?

I actually do, I have an example. I learned retention is super important at a young age. When I worked in double shift back in Toyota, we had this advisor named Tom. Tom had been a veteran for excellent number of years. By the time I was there, maybe ten years of veterancy there. But long story short, he literally had his customers roll windows up for me. I’m not kidding Chris, I’m not kidding. I would walk up to the customer, I’d prep myself. I’d say, “Hey, I’m Mario. I’d like to help you out here. What are you coming in for?” “Oh, Tom Ryan.” I’d look over and saw Tom busy with a customer, so I want to be polite and ask the customer, “You mind if I do the walk around while Tom is finishing up?” “No, just Tom.” And they roll up the window and literally leaving me there with my clipboard and my pen like “Wow, that just happened.” So, I mean that really got me noticing what he is doing with his customers. We sat down and I talked to him and he said “Do right by the customers. Build your rapport, talk about what they love, and you will always have customers coming back to you. Don’t do it all about business.”

I learned the secret, I retained customers and that pretty much what made me build success in the field myself, and customer retention is one of the keys there.

Yeah, those customers will want to come back and buy their cars there, right. They weren’t going to anywhere else but Tom because they trusted him.

It’s funny; they would actually come to Tom and tell him “Who should I go buy my car from?”

Right, he was extremely strong. Right, exactly.

So that’s the key to retention, and the answer to retention in your dealership is that the service advisors have to connect with the customers in a deeper level. The customers have to trust them and that’s the key to lowering your turnover in your dealership and your advisors not leaving. Because if they learn how to build a database and stay in one place for a long time, and care for that database of customers and their rich uncle, they’re not going anywhere. It would be like giving away your retirement. It would be like just handing over your retirement to somebody else, right?

We see that sometimes with advisors coming from other stores, they were top performing advisors when we recruit them, and some people will follow them over, but not many. Not what they would have if they stayed in one dealership in a long time.

It makes more sense if they build in one place where they know where you’re at. Versus hopping around and hopping around, people lost in the industry. That’s the answer to customer retention. Thank you for watching.