In automotive repair the customer retention rate is a measure of the percentage of customers that return for service within a given time period. For example, if a shop has one hundred customers at the beginning of the year and by the end of the year seventy of those customers returned for service – the shop would have a 70 percent retention rate. Many different factors can influence customer retention and monitoring performance in all related areas will bring positive results. Important factors affecting customer retention are:
- Maintenance and Repair Reminders – A common practice in automotive repair is to send correspondence to customers reminding them of services that should be performed on their vehicles. These include preventive maintenance services and previously recommended repairs. Reminders are most often communicated through email and text messages but sometimes regular mail is effective. These reminders are important in that they serve to increase the frequency with which customers visit the shop. Thus they have a positive effect on customer retention.
- Customer Follow Up – Even when using reminders and corresponding with customers there will be a certain percentage of customers that will not return for service within the expected time frame (usually six to nine months). Following up with these customers via phone, email or text message can stimulate repeat business. If the customer has decided not to return to the shop – a follow up will provide information on why they made the decision. This may offer the opportunity to take corrective action and improve service quality.
- Relationship Building – In sales they say ‘All things being equal people would rather do business with a friend – and all things being unequal people would rather do business with a friend.’ Nothing is more important to keeping customers than the one on one relationship they have with the shop owner and/or service advisor. When really busy or when focus is directed toward business problems sometimes less attention is given to relationships. This can be very costly. Relationship building should always be given the highest priority. Without positive relationships customer retention will suffer.