Why is customer retention so poor in the auto retailing industry? The answer is in the name…”auto retailing”. The primary mission of the auto retailing industry is interpreted by the customer to buy a car…and hopefully some F&I products too. There is so much emphasis on selling the car, our industry is still missing the profound revenue opportunity of earning a customer. Even with the latest technological advancement of digital retailing, the associated digital experience abruptly ends at the point-of-sale. Why? Because that’s the end of the auto retailing transaction (you sold the customer a car) and unfortunately it’s also the end of the dealer-customer relationship in many instances.

Of course, selling the car is a critical part of the equation. So is selling F&I products. However, with so much emphasis on “selling”, we should be applying more focus on earning the relationship. Consider this, Amazon is clearly the gold standard for digital retail engagement. Amazon’s vast currency and market position has very little to do with selling something digitally one time. Amazon’s transformative impact exists by enhancing the experience before and after the sale, that keeps their customers coming back again…and again. The simplicity of the whole relationship drives the retention and thereby the continuing revenue. So, should a car dealer’s digital engagement be limited to acquisition alone and end at the point-of-sale? It’s exactly how it works today. The auto retailing industry earns a sale but usually not a customer.

Truth is, if a customer engages their dealer after the point-of-sale, they will not be retained by having to navigate multiple pathways to accomplish what should be delivered in one unified experience. This is the new reality.

Shouldn’t we be executing a similar game plan as Amazon? The current methods, where many of the success metrics are focused on vehicle units and the number of F&I products sold (including the related one-time financial gains), literally translates into customer abandonment after the sale. Take a closer look. How does a dealer communicate with their customers after the point-of-sale? The primary methods are phone solicitations, junk mail (postal and email) and/or random text messages. Shockingly, we wonder why many customers are not inspired to return to their selling dealer. Ask yourself, how do your respond to phone solicitations? Engage, ignore or hand up? How about junk email…starting clicking on links or delete? Same with random text messages…and they are random. What if the digital engagement started with a push notification on their customer’s smartphone? “Thank you for trusting your vehicle purchase with us. Welcome to our dealership family. We’re looking forward to making your ownership experience the best one yet.” It’s very opposite of phone solicitations, junk mail and random text messages (which are usually interpreted as fraud), push notifications that lead to personalized messages and are integrated into the customer’s smartphone have the highest engagement rate.

Look through the lens of F&I solutions as they still promote the value of customer retention. What’s the current process look like when claim service is needed by the customer or service advisor (on behalf of the customer)? Multiple 1800 numbers (because every dealer has an F&I environment fueled by multiple third party administrators), phone queues with CALL HOLD WAIT TIMES, archaic online claim forms (that only lead to a phone call) and/or app that only works with one administrator or limited F&I products. Are these really customer retention solutions with that kind of service experience? These experiences may have been relevant or accepted 10 years ago…but not in 2021. Shouldn’t the customer or service advisor be able to engage all the purchased F&I products, even if they are powered by multiple providers, in one engagement platform and fully engage F&I service without navigating the analog anarchy that currently exists? In the F&I segment, 1800 numbers are almost exclusively the engagement pathway for service…by stark contrast if you ever had to make a phone call Amazon…something massively failed.

Truth is, if a customer engages their dealer after the point-of-sale, they will not be retained by having to navigate multiple pathways to accomplish what should be delivered in one unified experience. This is the new reality.

Consider the critically important financial work center of F&I. These products, the providers and their agents are all essential to a dealer’s financial success. Two concerns prevail today in this segment. 1. Are F&I products and their providers becoming a commodity with so many administrators selling the same products with the same benefits and indistinguishable value proportions? You’ll know if price becomes the primary element to new business acquisition and retention. 2. Should the currency of these important F&I products be limited to a one-time sales opportunity when the car is sold? Today’s clear differentiator for the F&I providers and their agents is the customer’s experience of owning these products. Customers are willing to pay more for a better experience and dealer’s are seeking new solutions to drive more revenue and retention. If you can show a customer (or dealer’s service advisor) all the purchased F&I products in one digital view, you solve a current massive F&I service maze problem and you can also uniquely display all the F&I products the customer didn’t purchase. This organic, personalized and connected pathway empowers the customer to engage F&I product sales previously missed, increasing the F&I product’s acceptance rate, revenue and provider/agent value.

Digital engagement and a customer’s experience is today’s battlefield where relationships, new revenue touch points, efficiencies and competitive differentiation are earned, retained or lost. Where do you stand? Either you’re part of enhancing Your Dealer Experience or you’re part of the problem…and there are no sidelines.