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Responsibility and accountability: automotive dealer loyalty

19 March 2012 IHS Markit Automotive Expert

Last month, I had the opportunity to speak at the Digital Market Strategies Conference, an event hosted by First Class Educators. If you are focused on the retail side of the automotive industry and haven't attended an event hosted by First Class Educators, I highly recommend it. The staff, venue and speakers are top notch.

I co-presented during the afternoon keynote address with Matt Murray from Dealer.com. Our session focused on the impact of social media on initial vehicle purchase and repurchase at the dealership. As part of the session, I asked the audience two questions:

  1. What is the average dealer loyalty rate in the US?
  2. How many of you have seen your dealer loyalty scorecards?

Answers to the first two questions ranged between 60-73%, a far cry from the national average of 30% and no one in the audience had seen their dealer loyalty scorecards. Knowing that the audience was comprised mostly of Internet Marketing Managers, I wasn't entirely surprised by the responses, but at that moment I realized a fundamental issue with customer retention at the retailer level. Every dealership employee should be responsible for customer retention and ultimately one individual should be accountable (Dealer Principle or General Manager). While I believe everyone at the dealership is responsible for customer retention, they need to see and understand the metrics.

So how do we accomplish this, as an industry? I believe it can be broken down into 3 simple steps:

  1. Manufacturers need to supply their field and dealers with dealer level loyalty metrics
  2. Field organizations should educate and train dealers on repurchase loyalty metrics
  3. Dealer Principles and General Managers must make customer loyalty everyone's responsibility by sharing the metrics throughout the organization and identifying opportunities for improvement

Dr. H. James Harrington once said, "Measurement is the first step that leads to control and eventually to improvement. If you can't measure something, you can't understand it. If you can't understand it, you can't control it. If you can't control it, you can't improve it." While I believe this to be true, I will put a slight spin on it, "Measurement is the first step toward responsibility and ultimately accountability."

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