Remember Loyalty

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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What is a Loyalty Program and Why You Need One


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Loyalty programs are on the rise. Companies utilizing rewards programs are at the top of their game.

But – what is a loyalty program? While most are different, many things are similar. A loyalty program is a way to deliver a superior customer experience to your most loyal fans. I’m sure you know how it works – give something to customers for doing things, they can spend that something down the road.

Like all other marketing efforts, an awesome loyalty program takes work. If you have not yet implemented a loyalty program in your marketing strategy, or are unsure about its efficacy, consider the following five reasons why a loyalty program may be a worthwhile option for you.

1. Boost Your Rep
Loyalty programs serve a dual function: to incentivize new clients to stick around after purchasing your goods and services, and to ensure that existing loyal clients still feel as if they are valued by your operation.
2. Loyalty Programs Are Inexpensive
It’s funny to me when I hear prospective clients talk about how expensive a loyalty program is, it routinely ends up being less than 5% of their overall marketing budget. Isn’t that an acceptable price for unlimited communication with your current and most loyal fans? .
3. Loyalty programs grow companies
Consider the top companies in a wide variety of industries – Hertz, Delta, Starbucks, even Coca-Cola all have a loyalty program that offers their customers rewards for doing business with them. The best of the best use loyalty programs to boost growth; and for good reason – keeping a current customer costs 7 times less than acquiring a new one.
4. Once It Gets Started, It Stops Being Work
A good loyalty program is automatic. It’s seamless. It doesn’t require additional personnel – although you may want to have someone overseeing it; but it’s not necessary. You should be able to ‘kick back’ and enjoy the profits.
5. It Makes Your Customers Happy
In a recent study by Bane and Co, it found that 80% of companies believe that they are delivering a superior customer experience, while only 8% of their customers agree. That’s a startling statistic – the question I always ask with it is this: do you believe you’re delivering a SUPERIOR customer experience? Because you’re probably not.

Why It Is Time For You To Set Up A Loyalty Program
It’s no secret anymore that loyalty programs are effective marketing tools. They increase growth, help retain customers, and improve your brand’s reputation. And if you haven’t yet weaved a loyalty program into your marketing strategy, you may be missing out on one of the best and easiest tools available for the success of your business.


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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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Tips for Successful Automotive Email Marketing


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Email marketing is alive and well, and can be extremely effective when done right. If you own a car dealership and are thinking about revamping your automotive email marketing campaign, try these savvy tips:

  • Start with a healthy email database. The best email marketing campaign on the planet won’t be effective if you’re not reaching your target audience. Make sure your email list is accurate and up-to-date with current contact information for your customers and prospects.
  • Add appropriate data. The more data you have about your prospects, the more effective your email marketing will be. Details such as the make, model, and year of the vehicle they currently drive as well as demographic information such as gender, age, occupation, estimated income, and lifestyle are all important. With that type of data, you can create personalized emails that are much more likely to be effective.
  • Make emails mobile responsive. According to the Direct Marketing Association, approximately 65 percent of emails are opened on a mobile device. If your email won’t open or display well on a mobile device, it will most likely get deleted.
  • Utilize triggered email marketing. You can increase revenue per email, retention, program ROI and customer lifetime value by sending emails triggered by customer behavior. Considering that triggered email messages enjoy a 152 percent higher click through rate than tradition bulk messages (according to, developing these types of emails is absolutely worth it.
  • Follow up. Incredibly, Cobalt Group’s National Automotive eShopper Experience Study revealed that 24 percent of email generated leads are ignored by dealers. What’s more, of those who do respond, 30 percent don’t follow up. Simply following up with information pertinent to your email leads will do wonders.

Finally, always proofread and edit your emails to make sure they are free from grammatical and spelling errors. Nothing says “unprofessional” like a sloppy email.

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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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Benefits of Email Marketing

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Many car dealers, large and small, use email marketing to effectively drive customers to their business. Car dealerships should incorporate automotive email marketing into their overall marketing strategy. Here are some benefits of email marketing:

Cost Effective
Email marketing offers a big return on your investment. For every dollar spent, your return could be as high as $40 – which is why even small businesses use it as a marketing solution.

Low Cost
There are no costs for mailing or printing, and you don’t have to pay for a billboard or advertising time on radio or television. The cost of sending emails is much lower than other types of marketing.

Less Time and Effort
Compared to other strategies such as postal mailings and telemarketing campaigns, email marketing can be accomplished in an hour or two. All you need is one copy of the approved email and an address list. The time needed can be advantageous for special sales or promotions that last just a few days.

Add a Personal Touch
Unlike the form letters used in the past, an email message can be personalized with a name or other information. Emails can be sent a certain amount of time after the customer made a purchase, or even on their birthday.

Test Which Emails Are More Effective
You’ll have the ability to send one version of an email advertisement to part of your list and another version to the second part. This is an easy way to tell which format works better. Email marketing has tracking tools that can give you information about people’s responses and which emails, font colors or headlines received the best response.

Easy to Pass On
When a subscriber receives an email and finds it to contain useful information, he can send the email to friends with a simple click. This is important if the subscriber is already favorable to your company, since word-of-mouth is a valuable tool.

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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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