How to Retain Satisfied Customers

In my previous post, I wrote about a troubling statistic released by Bain & Company that shows how even satisfied customers defect to the competition.  What does it take to retain those satisfied customers?

According to countless studies, it costs 4 to 10 times more to acquire a new customer than to keep an existing one (some studies even place it as high as 30 times more expensive!).  Think of all the money you’re investing to get new customers in the door.  How much are you spending for those new leads?  According to NADA Data, dealerships are spending over $600 in advertising per new unit sold, on average.  All this to acquire a new customer, “satisfy” them, and send them along their merry way to a competitor for their next service or purchase.

Now consider the fact that existing customers spend 67% more than newly acquired customers.  Both of these stats are common business knowledge, but sadly so often overlooked.

The reality is you’re pumping tons of money into lead generation to acquire new customers, who will likely defect even after giving positive CSI scores.  At the same time, the loyal customers who have already opened their wallets and are spending significantly more are being neglected.  Does that math work out for anyone? Can you rely on that first customer experience to persuade your customer to come back again and again? I mean they said they were satisfied, right?

No – the truth is, a focus on customer retention is critical to the overall success of your company.  Take a moment and think about your current advertising spend.  What percentage is focused on keeping your existing customers?  Be honest about it – don’t redefine “existing customers” to make your results more favorable.  What percentage is truly devoted to customer retention?

You know that existing customers cost significantly less and spend significantly more. Why then wouldn’t you invest in your current customers? What does that mean for your bottom line? According to leading customer loyalty researcher and inventor of the Net Promotor Score, Fred Reichheld, a 5% increase in customer retention can improve a company’s bottom-line profitability by between 25% and 85%. Can you afford not to focus on customer loyalty?

Cultivating true customer loyalty starts with showing customers appreciation for their business. By rewarding them, you lock them into future business. That investment goes a long way.

Sure, it’s different from what you’ve done before – but was that old way really driving dramatic results?  According to Jeff Bezos, CEO of, “What’s dangerous is not to evolve.” 

Stay tuned for the conclusion of this series where I discuss tips, tools and programs that keep your most profitable customers coming back.

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Nate Sieveking


Why Satisfied Customers Leave

I came across a statistic recently that should keep you up at night – “Bain & Company’s research has shown that in business after business, 60% to 80% of customers who defect to a competitor said they were satisfied or very satisfied on the survey just prior to their defection.” Let that sink in for a minute.

Our customers told us they were satisfied, so where did they go? Why did they leave?

The first problem may well be that we’re measuring satisfaction with a broken tape measure. Most auto dealers today boast CSI scores well above 90%. That’s an incredibly impressive number! Should we all pat ourselves on the back and say we’ve reached the pinnacle of customer service? If that were the case we’d never have to worry about customer retention because that level of service should sell all future business – right?

But let’s be honest about this, because your bottom line is riding on the truth. We know that a target of 95% satisfaction is common for automotive dealers. We know that pay plans, bonuses, incentives, holdbacks, inventory – you name it – are tied to these scores. We know that anything less than a perfect 10 is considered a failure. We know that salespeople will beg for high marks or even sweeten deals in exchange for perfect results – heck, their job depends on it! We know that deals even get turned down based on the threat of a low score – it takes too many perfect scores to make up for that one bad one. Can we then agree that there is too much going on with this measurement tool to utilize it as any useful gauge of true customer satisfaction?

Dave Illingworth, former Toyota and Lexus exec puts it best: “The only meaningful measure of satisfaction is repurchase loyalty.”

We measure customer satisfaction, but what we really want is customer loyalty. Going back to that first quote from Bain and Company, satisfaction no longer will cut it. With an investment as large as a vehicle purchase, we need to move well beyond simply satisfying our customers. Customers have an abundance of choices today. They are doing their research, they know the product they are interested in purchasing – often times even better than the salesperson. They can buy that exact car from any number of dealerships. The prices have to be fairly similar in a competitive market. How do we stand apart?

What wins you the business now and in the future is rewarding customers who choose your dealership over the competition.

Stay tuned for part 2 of this series. We’ll continue to explore customer satisfaction, what it means in relation to customer retention, and how important creating customer loyalty is to your bottom line.

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Dealership Rewards


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Many of our clients are relying on rewards as the slow months are coming up. A rewards program gives you unlimited communications to customers along with incentives your competitors can’t match.

When customers earn rewards toward dealership purchases, they’re FAR more likely to return to the store.

What are you waiting for? What’s standing in your way of doing what the best companies are doing? Hertz, Delta, Starbucks, O’Reilly are just a few companies using rewards to motivate their customers.

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Types of Car Dealership Incentives


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During the Super Bowl of 1975, car incentives were used for the first time and have been used by car dealers ever since. The two main types of car dealership incentive programs are customer incentives and dealer incentives. Here is a breakdown of car dealership incentives:

Financing Incentives
These incentives are very well received by the public. Sometimes the interest rate offered is as low as zero percent. However, the rate the buyer is offered will depend on their credit score.

Leasing Incentives
Around a quarter of buyers choose to lease their vehicles. Special deals usually offer lower interest rates or cash back. Before accepting a leasing deal, a consumer will consider the down payment, length of lease, allowed yearly mileage and the monthly payment.

Cash Back Rebates
These are used extensively among car dealers and consist of sending cash directly to the buyer from the car maker. Normally, you will not get a check, but the dealer will lower the purchase price of the car.

Customer Loyalty Incentives
Loyalty rewards are offered by car manufacturers for customers who have bought the same brand of car in the past. Sometimes the car maker will offer a reward for first-time buyers to lure them away from the competition.

Cash Incentives for Certain Customers
These incentives reward a certain section of the population, such as first-time car buyers. Other groups may include members of the military or recent college graduates.

Dealer Cash Rebates
These are rebates from the car maker that go to the dealer instead of the customer. Typically the dealer passes on the rebate to the buyer, which can go very high on luxury vehicles.

Dealer Kickbacks
These are rewards for dealers who meet certain criteria, such as reaching a sales goal over a certain amount of time. These support the dealership and help it stay in business.

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What to Ask Before Implementing a Loyalty Program

When you own a car dealership, it’s important to reach out to your customers continuously even long after they have purchased their vehicles. Automotive email marketing isn’t always a popular option with many dealership owners, but it is a good one for those that are willing to go the extra mile for their customers.

While implementing a loyalty program isn’t difficult, finding the right company to partner with may be. You don’t want to partner with just any company. There are a few things you should ask before hiring a company to create a loyalty program for your dealership.

Have you seen any of their work? If another dealership has offered their reviews or testimonials on the website, try to check it out and see what kind of program they’ve created for that company. It can help you get a good idea of what you’ll be getting for your dealership.

What’s the company’s backstory? It may not seem important to know where a company came from, but it can help shine a light on what they are truly about. A company that has done everything they can to succeed is going to do everything they can to ensure other companies succeed as well. When it comes to small dealerships, it’s important to get the help you need to continue growing.

What is the angle of the program? Asking the company what their angle is can help you decide if they are going to do what you want for your customers. Whatever loyalty program you decide to use for your dealership is going to be a reflection of your business and how you feel about your customers, so you want to be sure that it is something you are satisfied with. If you’re not entirely satisfied with the idea of the program, do not settle for something you don’t like.

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Why Does Your Dealership Need a Loyalty Program?

Car dealership owners are well aware of how difficult it can be to retain customers and market to new and current ones. For a lot of consumers, buying a car is a one-time experience and they don’t feel the need to visit the dealership again; so as a dealer, it can be stressful to figure out how to get customers back into their business.

A loyalty program is a great place to start when it comes to finding a way to reach out to new and old customers. Car dealership incentive programs are actually more useful to customers than you may think.

  • Keeping your dealership’s name fresh in your customer’s minds is one of the key ways to get them to return for another visit, even if it is further down the road than you would like. It’s an easy way to remind them about your company. And if you offer exceptional customer service, they are going to remember their experience buying their car through your dealership.
  • Do you think you may be doing something wrong or your customers aren’t as happy as you would like them to be? A loyalty program is going to get you all of the feedback you need to know where your business is struggling and where things should be changed. Offering customers a chance to express their feelings and feedback makes them feel like their opinions matter and is beneficial for you.
  • Everyone likes an incentive! It doesn’t matter if it’s a percent off coupon, a referral reward or simply gaining points to redeem for a reward; any kind of incentive shows your customers that you’re willing to give them more than just what they’ve purchased. For example, if you offer your customers points for coming in and getting their oil changed with your business, they are going to keep returning for services, keep your business fresh in mind and gain something out of each return.

Introducing the re:member group Prepaid Maintenance platform

If you’re like most of the dealerships I’ve talked to, you have a few struggles:  Paying an insane amount of cash to some finance company, manually entering in your packages, low penetration numbers, and/or not having a choice of the packages you’re selling to your customers.

We’ve heard those struggles, and responded.  The re:member group Prepaid Maintenance platform is finally here!

  • Customized packages – want to award 4 oil changes?  State inspection?  Tire rotation?  Totally up to you.
  • Integrated with your DMS, packages automatically awarded.
  • You manage the cash, do whatever you want with it – after all, it’s yours and they’re your customers.
  • A package of benefits in the community, managed by us worth thousands of dollars to your customers, allowing you to close the PPM packages at a MUCH higher rate.

Take control of your PPM destiny.  Give me a call today for a quick demo.

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