Why Dealerships Lose Repeat Customers 

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Repeat customers are one of every dealership’s most significant assets for maximizing performance and profitability. However, winning back lost customers can prove challenging for many dealerships – particularly those who cannot pinpoint where and why they fail to convert first-time buyers into a recurring revenue stream

Those struggling dealerships must work to identify where they can improve operations – both in sales and ongoing service – and implement strategies and the technology necessary to improve customer experiences. 

This article discusses three common reasons why creating repeat customers becomes challenging for many dealerships, providing them with a starting point for reviewing lackluster processes. 

3 Reasons Why Dealerships Lose Repeat Customers 

1. Limited Used Car Options 

As new vehicle prices continue to grow, more people will purchase used vehicles. This demand shift presents several newly developing hurdles for dealers, including the following: 

  • Finding high-quality used cars to offer customers is challenging in today’s market, as fewer secondhand cars are available. 

  • Customer expectations are rising, demanding better pricing offers and a broader selection of pre-owned vehicles. 

  • Consumers are cautious about buying automobiles outright in an inflated pricing market. 

A lack of options will compel consumers to research alternate purchasing options, and dealerships must develop strategies and integrate lead generation software to expand their used inventories to keep pace with competitors. 

2. Poor Inventory Management 

New and used cars, service parts, and similar products that improve the consumer experience are all inventory that moves in and out of dealerships daily. However, dealerships practicing poor inventory management run into problems meeting customer expectations, such as: 

  • Missed opportunities to complete customer orders because parts were unavailable  

  • A dip in customer satisfaction when they wait unusually long for car repairs and part replacements 

Both instances often result in customers exploring other dealerships for subsequent vehicle purchases and service visits. 

However, dealerships can boost operations efficacy with a well-organized inventory management system. This solution should use historical data and current quantity information for precise demand planning, increasing a dealership’s potential for profit and preventing the predicament of storing outmoded inventory. 

3. Inefficient Service Processes 

While online shopping and other digital options are in high demand, customers still value their in-store experiences. Many will step inside the service lane for repairs and maintenance even if they have completed most of the purchase process remotely.  

Unfortunately, many dealers provide bad onsite experiences because they focus too heavily on customers’ increasing demands for online services. As a result, they run into several service-related problems, including the following: 

  • Poor vehicle status monitoring in the service lane
  • Delayed approvals and lagging interactions with customers

  • Unclear communications with the parts department and service technicians 

These issues are typically the byproduct of poor time use. While highly trained employees, training, and knowledge are necessary for dealerships to offer the finest service, these elements are only helpful if service departments use that time effectively. 

As a result, the dealer loses customers, and the profit margin falls. Some of the most frequent causes of an underproductive service department include the following: 

  • An inefficient, time-consuming reporting procedure 

  • A workflow restriction that is producing a bottleneck in the operation 

  • Automotive software has not changed to reflect market changes 

  • Instead of using a single platform, data is kept across many sources, which results in inefficiencies and poor data quality 

  • A need for more communication between teams, systems, and the process 

However, top-performing dealers understand the continued need to improve onsite service processes. They have worked to improve their onsite parts and service department through service scheduling software that improves service workflow. 

Winning Repeat Customers Requires the Best Digital Solutions 

Understanding and remedying operational shortcomings should enable your dealership to win back repeat customers and reduce attrition at your dealership. More specifically, you must find new ways to boost used car inventory, manage your inventory, and streamline service processes.  

However, carrying out these objectives and generating recurring revenue streams requires investing in the industry’s top data-driven digital solutions that boost overall dealership performance and make this process more doable. 

Contact us today and discover how Affinitiv’s innovative digital solutions can help your dealership improve operations, improve sales and service experiences, and build quality relationships that create more repeat customers.  

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