Retaining customers in the digital age

Consumer loyalty has dropped significantly over the years but what can dealers do to make sure they keep them?


Loyalty is a very precious commodity for any business. Returning customers often tend to be brand advocates, recommending friends and family if they’ve received great service. Growth in the number of online video channels, discussion forums, as well as Google reviews, for example, makes it easy for consumers to do their homework about a particular car model’s rating or a dealer’s reputation.

In this age of connectivity, where our cars are part of the connected environment, consumers want instant responses because they are virtually always ‘plugged in’. Reflecting this fact, research by Yonder Digital Group found that over 80% of consumers would take their business elsewhere if queries are not answered swiftly and effectively. The findings noted that, at crucial moments in the journey to purchase, many customers look for a ‘live agent’, particularly for urgent or non-standard queries. Businesses that fail to provide such support at these critical stages risk losing customers to competitors which offer instant communication.

Having the tools to be responsive is therefore absolutely a priority. Whilst dealers with effective communication strategies are improving sales and clearly retaining customers, the research found that, overall, the motor industry is falling short of customer expectations when it comes to contactability, specifically, ease of getting in touch and getting problems resolved. Based on a poll of 2,000 UK consumers, almost a fifth (19%) of automotive consumers felt that contactability was poor within the sector, whilst only 24% rated ease of contact as being good.

Interestingly, the issue of contactability clearly has a link to customer loyalty in automotive retail but it can be broken down further, in terms of both new and used car sales.

The website polled the views of over 1,000 new car buyers and found that over half (56%) said they would either definitely or probably return to the same dealer to purchase their next new car. Just 8% said they would probably not buy again from the same dealer and 5% said they would definitely not. That’s still some 13% of customers who would go elsewhere. Not all of this can be attributable to communication, of course but it’s fair to say this could play a part.

In comparison, over a third (36%) of used car buyers also said they would definitely, or probably, return to the same dealership for their next purchase but 47% were undecided and 17% said they would either probably or definitely not return.

Analysis of trends in vehicle financing would suggest that customers will renew a package well before they reach a point in their contract where the cost to change may be zero, or when they pass the point of owing less finance than their car is worth. Yet many funders and dealers with a defined retention strategy limit their customer contact to one of these points. In contrast, it can be argued that maintaining a consistent contact strategy throughout the life of a customer’s finance agreement provides an increased likelihood of a renewal.

Regardless of market conditions, well planned and executed communication strategies can help dealers improve customer retention. The aim is for a seamless transition through the buying process, from web research through to signing a vehicle order.


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