Top 3 Reasons Why Your Service Department Needs More Return Customers

Top 3 Reasons Why Your Service Department Needs More Return Customers

As a business owner you understand the importance of customer retention and creating a loyal client base, however, many dealerships struggle with this practice in their service departments. As the cost of customer acquisition continues to rise, here is a refresher on why return customers are so important for your business.

1.

Repeat Customers Spend More
According to business.com, repeat customers spend up to 67% more than those who are new to your business. With customer acquisition costing 5-10 times more than selling to a current customer, the quickest way to increase your bottom line is to encourage repeat customers. When the service department is trustworthy, convenient, and loyal, repeat business will add up over time. It is crucial for dealers to look at the potential lifetime value of a customer and invest in keeping them.

2.

Repeat Customers Trust You
For new customer acquisition, you have to sell yourself, your dealership and your servicing. Even under the best circumstances, new customers will be guarded and sceptical of your advice and suggestions.

However, when working with repeat customers, those barriers to spend are minimised. If you are looking to raise your profits, focusing on repeat customers can be a cost-effective option.

3.

New Customers Acquisition is Expensive
Advertising, discounts, and service specials are all expenses for a dealership’s service department. These expenses may be necessary, but they are not always profitable. Unfortunately, most new customers drive away with not much more than basic, routine, maintenance.

Your customer acquisition plan should look beyond that first visit and focus on retention in order to see costs fall. Long-term business success is built on customer loyalty, and dealerships are no exception to the rule.

A dealership’s service department has the ability to become its very own profit centre, independent of the sales department. If your service department has a solid customer base, it can help future proof your dealership and help carry you through the tougher times, but it all starts with customer retention.