Home Retail Know your car retail customer and keep them close to ride recession, opinion

Know your car retail customer and keep them close to ride recession, opinion

by Ozva Admin

Following Chancellor of the Exchequer Jeremy Hunt’s acknowledgment that the UK was in recession during last week’s autumn statement, Mad Devs chief executive David Boyce wishes to highlight the need for car retailers to maintain its customers close in difficult economic times.

Read on to learn why the head of the automotive software solutions company believes a global view of dealership customers will be key to maintaining loyalty and profitability for months and years to come.

Keep your customers close.

All signs point to a tough winter for auto dealers due to rising energy bills, weakening consumer demand and continued supply problems for new and used vehicles.

In this market, it is essential that dealerships do everything possible to retain customers after they leave the showroom.

Too often, the relationship between dealer and buyer is transactional, with little structure in place to build long-term brand loyalty.

Existing customers provide the lowest cost revenue stream with aftermarket, upsell and the ability to upgrade a vehicle, providing valuable revenue streams in an increasingly tight economy.

Technology can help structure communication more effectively and create a stronger relationship.

For example, creating a shared digital space can help boost customer perception.

At the same time, additional purchases can be triggered with customer surveys, service reminders, online service reservations, and vehicle valuation.

The technology is available today to allow dealers to become the single point for all of their customers’ mobility needs.

Giving customers a central point to manage their service hours, billing, insurance, and any relevant video content will bring them back to the brand and create a longer, more meaningful relationship.

The data can be used to trigger sales opportunities. Let customers rate their own vehicles and suggest alternatives available to them at a similar price.

The business case is clear. Investing more in each customer relationship will pay dividends by increasing revenue and lowering your cost per sale.

It’s helpful to use the customer lifetime value model, which is a projection of the typical revenue a customer will provide over the course of their relationship with a company.

A lifetime value assessment of a customer’s value will influence marketing budget, technology, profitability, and many financial decisions.

It’s a crucial factor in revenue forecasting because each additional customer increases revenue each month and over its expected lifetime.

Resource allocation to current customers is a crucial area where lifetime value can be utilized. You can devote more resources to acquiring and keeping individual customers after you segment your customers.

Depending on the stage of the customer lifecycle, high-value customers should receive additional resources, especially if they are near the end of the lifecycle with the possibility of renewal.

Long-term profitability will be supported if you can improve the lifetime value of new customers while reducing churn. To reduce turnover, it is recommended to create a retention plan based on data and technology. Aim to put yourself in the pocket of each client and be part of their daily life.

Both the Society of Motor Manufacturers and Traders (SMMT) and the National Franchise Dealers Association (NFDA) have called for the government to take urgent action to support dealers during the challenging period ahead. There is no doubt that any help will be welcome in dealing with issues that are beyond the dealers control.

However, there are steps dealerships can take now to take advantage of digital transformation. To be closer to customers and build longer lasting and profitable relationships that also provide a better ownership experience.

The goal of technology in the last ten years has been to transform the way people work. The goal of technology in the next ten years will be to change its business model.

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