Every customer who visits your dealership has a potential customer lifetime value, even if they’re only stopping in to browse new models or pick up parts. A significant part of it depends on the experience they receive while interacting with your store.

For those customers who have made a purchase from your dealership, continuing the journey from the sales department to the service lane is crucial—not only to provide a seamless experience for your customers but also to increase the customer lifetime value. Here’s why that customer’s first vehicle service appointment is so important to the customer lifetime value.

How the First Vehicle Service Grows the Customer Lifetime Value

What Is Customer Lifetime Value?

Customer lifetime value refers to the total amount of money a customer is expected to spend at a business throughout their entire relationship. For your store, it’s the revenue you can expect from a single customer over the course of owning and servicing their vehicles.

This metric is calculated by taking the average revenue per customer and multiplying it by the average customer lifetime. For example, if the average service customer revenue is $300 and the average customer lifetime is 10 years, the service customer lifetime value would be $3,000.

The customer lifetime value is an important metric for automotive dealerships because it helps you to:

• Focus on Long-Term Growth: Instead of just closing one-time sales, building lasting customer relationships becomes the focus—and is rewarded. Satisfied customers are more likely to return for future service needs, buy another car from your dealership, and recommend your services to others.
• Make Informed Marketing and Sales Strategies: When you better understand the customer lifetime value, you can allocate resources more effectively, investing in targeted marketing campaigns and advanced technology that will improve the customer experience.
• Improve the Customer Experience: Knowing a customer’s lifetime value allows you to tailor the customer service experience. You can remedy retention roadblocks and offer loyalty programs, personalized recommendations, and special promotions to high-value customers.
• Identify Profitable Customers: By analyzing the lifetime value of a customer, you can identify your most valuable customer segments, allowing you to focus your marketing and sales efforts on the customers who are likely to generate the most revenue.
• Reduce Customer Acquisition Costs: Retaining existing customers is generally cheaper than acquiring new ones. By prioritizing this metric, your store can optimize your customer service and build brand loyalty, leading to a more cost-effective customer base.

How Does the First Vehicle Service Impact Retention?

You might be surprised to discover that many of your sales customers intend to return for their first vehicle maintenance—over 70%, in fact. Capturing these customers for their first vehicle services is an incredible win for your dealership, so you’ll want to avoid losing them with inefficient service processes or other pitfalls.

For customers who do not intend to return to their dealership, many choose quick lube service shops, making these competitors the biggest service retention threat to dealerships. However, you can take advantage of this detail in your marketing campaigns to target defecting customers and emphasize your extensive knowledge of their vehicles and the many benefits you offer that independent shops don’t, such as delivery/pickup services, rewards programs, and OEM parts.

Strategies to Increase the Customer Lifetime Value

Before car shoppers ever step foot in the service lane for vehicle maintenance, their experience begins with their purchase. Make sure it’s an exceptional one that leaves a positive impression and draws them back. Before they take their new vehicle home, give them a quick overview on the routine care needed for their new vehicle and why it’s important. Then, introduce them to your service team and let them know when to expect their first service (either by months passed or miles driven).

With up-to-date customer contact details, send service reminders, offers, and helpful how-to videos. These maintenance-related email and print campaigns help you target customers at crucial points in their journey, keeping your dealership top-of-mind and reminding them that you’re there to help make their service experience seamless and simple. Don’t forget to offer them the option to easily book service online, when it’s convenient for them. Having an efficient service scheduling tool always available will help improve the customer experience and increase the customer lifetime value.

Build Lifelong Customer Relationships, Starting with Service

After your sales customers drive off your lot in their new vehicle, ensure they don’t forget your dealership and the many benefits you offer by providing a memorable experience that helps ensure they come back for service. From eye-catching marketing to easy-to-use service scheduling, we have solutions that can help your dealership retain more customers. Contact us today for your live demo.

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