Customer retention is key to long-term business stability. We have all heard and regularly use the phrase customer retention but how does this phenomenon affect our business? What tangible value does it bring to our balance sheet and how can we positively influence it?
Customer retention is vital. If customers feel aggrieved in the slightest way, whether during the sale of a vehicle or post-purchase, they will vote with their feet and take their business to one of the many competitors just waiting to deal with them. This can only have a negative effect on your balance sheet.
How can we positively influence customer retention? What products and services can we offer that will not only stabilise our customer retention ratio but will also strengthen it.
Trying to find all the answers to this and then trying to find a satisfactory product provider can sometimes feel like searching for the Holy Grail.
Extended warranty has long been established in most dealers’ product portfolios. Traditionally, it has been seen as a product that delivers front-end commissions and revenue through after-sales departments and acts as a mechanism to retain customers.
Warranty provides the dealer network with a tool to enhance customer retention. The key to how much it enhances it lies within the quality of the product offered.
Warranty is designed to work for the supplying dealer as well as the consumer. But what value as a retention tool is warranty if aftersales work is driven into cheaper high street repairers or if the coverage quality of the product sees a greater percentage of claims being rejected than paid?