There are a lot of different aspects of customer management that you have to think about on a regular basis. Each of them requires its own strategy, and too often, dealers get so focused on new leads and generating fresh sales that they forget about their best potential profit margin: the repeat customer.

Especially in today's highly-digital, highly-competitive industry & pandemic of the COVID-19. Customer retention is truly one of the most valuable assets available to your dealership. NOW & ALWAYS!

Why does customer retention matter so much?

• It increases the overall lifetime value of your customers, meaning you get more out of your investment in each lead than if they were a one-time purchase.
• It can help you develop strong relationships with your customers, allowing you to offer value and a sense of brand authority.
• Customer retention boosts your revenue, with the average repeat customer offering five times more profit potential than a new lead.
• When you have repeat business, you'll automatically generate new business through referrals and free word-of-mouth advertising.

What's more is that you will be 40% more likely, at the very least, to sell to an existing customer than to convert a new lead. There truly is a lot of value in repeat business, and that's why it's time to take your focus there.

Customer Retention Rates

The rate at which you retain customers is fairly easy to track. All that you have to do is determine how many customers you have in total and how many of those have come back for an additional purchase over time. You will want to pick a specific window of time so that you can get an accurate measurement because when you develop a new retention strategy, you will need to have measurable goals over a defined time frame.

Here's a quick example of how to figure out your retention rate:

• 2,000 customers at the start of the period
• 200 customers acquired
• 1,950 customers at the end of the period
• 2,000 – 200 = 1,800 existing customers
• 1,800 / 1,950 = 0.923 x 100 = 92% retention rate

The thing about customer retention is that it costs a fraction of new business marketing efforts, and it's something that will practically take care of itself when you utilize the latest marketing automation and CRM solutions to streamline and manage your efforts. If you really want to boost your business, take a break from lead generation & focus on cultivating the seeds you've already sown.

Are you taking this time to develop a plan? What has worked for you & what hasn't? 

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