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5 Customer Retention Program Mistakes You Need to Avoid

customer retention program

Is your customer retention program doing what it should to keep existing customers coming back?

Customer loyalty is a smart place to spend your advertising dollars. You’ve probably heard that existing customers have a higher chance of making a repeat purchase if they have a good experience, and we know that it’s 6-10 times more expensive to try to get new clients in your door. The problem is that not all customer retention programs work as well as you may think, and there are some common mistakes you can avoid.
customer retention program

5 Ways your customer retention program can go wrong – and what you can do about it

Mistake #1: Your program is the same as everyone else’s.

The two most common loyalty rewards are a ten dollar off coupon or a free oil change. While they started off as attractive offers, a lot of customers get bored by the same old, same old. Try to get creative and think of other services that might interest your clients. Check your DMS reports to see what services are most popular, and use that information to come up with new and exciting offers. Service rewards are great opportunities to acquire more work right on the spot, but keep it fun and stand out from your competitors.

Mistake #2: Your customer database is missing a lot of information, especially email addresses.

It may sound silly, but when you start your customer retention program, you want to make sure whoever enters the client information is diligent about getting all the data entry correct, especially the email addresses. You can cross reference your loyalty program list to your CRM, which will help you market to the right clients. It also makes it a lot easier to search for the client when they come in to check or redeem their balance. Missing information can lead to longer cashiering times, which is frustrating for both parties.

Mistake# 3: Your program is complicated, and you still haven’t gone digital.

Offering clients a simple discount is a lot more appealing than an old punch ticket or a key card. Plus, who wants to waste money on something customers will most likely lose or forget? You’re better off tracking your discount program digitally. Digital incentives give you another chance to reach out to your customers via balance reminder emails.

Brands such as GM have a Preferred Owner Program which has a user-friendly digital platform. They also encourage customer interaction and provide discounts between visits to the dealership via popular retailers, keeping customers engaged. Look into franchise loyalty programs, but be smart about the costs associated with them. There are also third-party businesses out there to help you, but make sure to do your research first. You want these incentives to draw clients in, not scare them away with spammy schemes.

Mistake #4: You’re not making your customers feel special.

The whole point of a customer retention program is to keep them coming back for more, and the best way to do that is to make them feel special. Research your competitor’s programs to see what they do for their clients. Is it a VIP program? Do they offer good loaner vehicle services when their car is in the shop? Do they give a certain percentage back on each service bill? Take this information and use it to help you come up with a plan that is different, and better than the competitors.

Mistake #5: You’re not promoting your program the right way.

Once you establish a program, you need to advertise it. Email clients and have dealership signs and promotional materials made. Your client retention program isn’t going to work if customers aren’t aware it exists. Make sure your employees are aware of any new retention programs so they can help promote them when talking to clients. You can use loyalty programs to not only improve your service department but to help sell vehicles too.

It’s common for managers to be frustrated by the lack of profits and the increased costs involved in keeping up with loyalty programs, but if you take the right steps, you can avoid being one of those managers.

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Patrick H.
Patrick H.