We are in a loyalty crisis. The benchmark that 35% of your monthly sales should come from people who have spent a dollar with you is far from achieved. In 2024 and into 2025, loyalty rates are hovering in the low 20% territory. Dealers who were religiously seeing 30 to 34% rates are now seeing 21 to 23% rates. This problem has expensive repercussions because attaining new customers is not cheap!
Salespeople only think about the car deals that will happen this month, so they care most about floor-ups. Those are people they can sell right now. Working their past sales, lease turn-ins, the service drive, or simply following up with people who haven’t bought yet is like asking a 5-year-old to eat her broccoli. She will do it if you get angry enough and start taking toys away, but she will not do it nicely.
Why ask salespeople to do it?
Sure, you may have a 20-year veteran who no longer needs to take floor-ups because 30 people will walk in and ask for him each month. You’re not asking that guy to eat his broccoli. He understands the strengths of eating it, and he is already reaping those rewards.
Your less-than-three-years-on-the-floor folks have not been there long enough to appreciate enough returning customers returning to the buying cycle. You can try to convince them to work inside the equity tool, to call those orphaned customers, and to do whatever it is you may be able to feed them. They still don’t like the broccoli.
Why waste your time and frustrate them too?
This is a call to tell you your customer loyalty is on the line, and your salespeople will not help you fix it. We will.
I bet you do not have an easy way to measure your current customer loyalty rate in sales and service. This is probably because there aren’t any solutions that combine that data to generate that number. Here are some simple averages: 63% of the average dealership’s service drive did not buy that car from that store they’re servicing, and only 23% of a dealer’s sales bought or used service on that car before trading it. The service number is climbing while the sales number is declining. Earlier, I told you that sales should strive to get 35% of its monthly sales from past customers.
Put us in the fight. We will automate the messaging your equity tools require salespeople to make. We will even do the follow-up and convert people to appointments that your salespeople will be excited about.
That is what we do right now. Tomorrow, we will give you an automated post-sale process to boost warranty sales and more hooks to keep your customers loyal to your service department. It’s all automated. There is something for every customer.
Don’t let your OEM be the sole voice to people who aren’t car shopping, and don’t count on your salespeople to consistently speak to them either. There is a loyalty crisis in the car business right now, and it is going to drive your expenses through the roof in new customer acquisition. It costs 5 to 25 times more to get a new customer than to retain an old one.
