Automotive marketers constantly come up with new schemes to retain engagement with customers after the purchase, as holding on to a customer is far easier than acquiring a new one. The aftersales services and repairs are a ready-made way to hold on to customers so this makes their jobs somewhat easier until a customer chooses to upgrade their vehicle or buy an additional vehicle. That is why marketers have to focus on customer lifecycle management for automobile to build a long-term relationship with a customer.
In this blog, you will learn about CLM automotive and tips to improve your dealership’s customer lifecycle management. Also, find the best practices and challenges you might face.
What is Customer Lifecycle Management for Automobile?
Customer lifecycle management for automobiles describes the stages a customer goes through in their relationship with an auto company, from the first contact, through the process of engagement, purchase, and use, and finally loyalty and advocacy. This lifecycle is not linear, but a cyclical one, as the name suggests, where the end goal is to turn a one-time customer into a repeat customer, and finally, a brand advocate. It helps with improving the relationship between a company and its customers.
CLM is the process of understanding, managing, and analyzing customer data. It is important to understand the customer lifecycle for the success of a business in the world of automotive dealerships. It allows and guides companies to understand their customers better, identify the most profitable sectors, and improve their automotive customer experience.
Importance of Customer Lifecycle Management
Customer lifecycle management for automobiles is an important tool that helps dealerships and companies track the customer journey and guides consumers toward brand loyalty and advocacy. Dealers can gain higher profits and better brand visibility through enhanced customer experiences. This maximized both prospective and existing customers’ potential. It also helps dealers identify opportunities to engage with their customers, improve customer satisfaction, and increase sales. It provides an elaborate view of customer behavior and preferences which dealers can use to make automotive marketing strategies and develop products.
Tips to Improve Your Dealership’s Customer Lifecycle Management
The cost of gaining a new customer is 5 to 25 times more expensive than holding onto an existing customer. Loyal customers tend to have a sense of trust and a greater tendency to spend on the same dealership again, more than a new client. Here are 3 tips to help dealerships improve their customer lifecycle management for automobiles:
1) Service Retention Means Repeat Business
Encourage the sales team to boost the rate of customers returning for their 12-month servicing by reaching out instead of waiting for the customer to book a service session on their own accord. Customers have a level of trust in the sales staff after their first purchase. It is an important relationship that can leveraged at all stages of the customer lifecycle. It is an opportunity for sales staff to generate repeat business from service retention.
2) Service Booking Means Sales Opportunities
Customers bringing in their vehicles for service is a golden opportunity for repeat purchases and vehicle upgrades. Service staff can collaborate with the sales team and update them on scheduled bookings. Sales staff can identify customers who may go for an upgrade. This surprises customers with the value of their ‘additional weekly repayment’ and may be open to upgrading their vehicle on the spot.
3) Forming a CLM Driven Culture
Having a team of staff that communicates regularly forms a long-term and mutually beneficial relationship with customers across their entire car-buying journey. High-performing dealerships make sure their departments work collaboratively. It is important to embed a culture of collaboration in the dealership.
Challenges of Customer Lifecycle Management for the Automobile Industry
Auto dealers and automotive OEMs face several issues while initiating process changes to keep customers loyal and satisfied throughout the vehicle lifecycle. Here are some of the major challenges of CLM automotive:
1) Building Vehicle Service Logistics
Customers expect premium services such as vehicle pick-up, drop-off, and a concierge service that is available 24/7 and takes care of any requests made by them.
2) Improving Vehicle Service Diagnostics
Vehicles lack built-in IoT (Internet of Things) devices and mobile apps to deliver real-time information to the manufacturer and customers about the vehicle’s condition or required services.
3) Increasing Vehicle Services
Customers highly demand access to added services such as online payments, vehicle service bookings, or real-time tracking of vehicle repair through IoT but automotive distributors do not deliver.
4) Enhancing Continuous Revenue Engagement
Manufacturers should customize offers for each individual customer and advertise them through social media channels or OEM apps to increase follow-on sales and establish a long-term relationship with the clients.
Stages of Customer Lifecycle Management
Automotive dealerships and businesses can transform their one-time buyers into loyal customers and promoters if they analyze the customer lifecycle properly. Unlike the buyer’s journey, the customer lifecycle focuses on what happens during and long after the initial purchase. These are the 5 stages of customer lifecycle management for automobiles:
Stage 1: Awareness & Branding
In the awareness stage of the lifecycle, car dealerships focus on making a strong first impression. It can be achieved through high-quality advertising, positive word-of-mouth, and user-friendly websites. It is important that dealerships stand out and build trust with potential customers. Targeted marketing strategies increase visibility and attract the right audience.
Stage 2: Consideration & Customer Service
In the consideration stage, potential buyers actively research their options, visit dealership websites, and possibly test-drive cars. Dealerships must provide detailed information, transparent pricing, and customer reference. Good customer service and a knowledgeable sales team are important for answering questions, building trust, and differentiating the dealership from competitors.
Stage 3: Purchase & Pricing
In the purchase stage, potential buyers become actual customers, making it important for car dealerships to ensure a smooth and hassle-free buying process. Customers often compare prices from different dealerships so it’s necessary you offer competitive and transparent pricing. Flexible financing also helps with making the buying experience better.
Stage 4: Use & After-Sales Services
In the use stage of the lifecycle, the focus shifts to making sure the customers are satisfied and loyal to your dealership. Car dealerships must provide ongoing support through warranties, regular service reminders, and prompt responses to any issues. Excellent automotive aftersales service helps maintain the car’s conditions and strengthens customer relationships.
Stage 5: Loyalty & Advocacy
In the loyalty stage, car dealerships focus on retaining repeat customers and creating brand advocates. Ongoing engagement through excellent service, loyalty discounts, and referral programs helps maintain customer satisfaction and create positive word-of-mouth. Remember, retaining customers is more cost-effective than acquiring new ones.
Best Practices for Customer Lifecycle Management
The strategies for customer lifecycle management for automobiles is an automotive company’s process to manage its customer relationship. The most effective CLM automotive strategies are designed according to each customer’s needs. The best practices for customer lifecycle management include:
1) Personalized Interactions: Customize your communications according to customers for each stage of the lifecycle — be it calls, emails, or chats.
2) Multichannel Experiences: Be present on all platforms your customers use, as helps you understand and meet customer needs without any gaps.
3) Surveying Current Customers: Use surveys to learn from existing customers and find out how they discovered your dealership and any challenges they faced during the lifecycle.
4) Surveying Non-Converting Prospects: Learn why some prospective buyers didn’t make a purchase. The reviews will help turn leads into customers.
5) Post-Purchase Engagement: Continue engaging with customers after the purchase. Send check-in emails or regular perks to make customers feel valued.
Benefits of CLM for Auto Dealers
Customer lifecycle management for automobiles simply makes a dealer’s task easy by creating multi-sales opportunities and helping customers have a fast and clear process of buying a car. It is done by using software like automotive CRM (Customer Relationship Management). Here are some more benefits of CLM for auto dealers:
1) Customer lifecycle management, if done effectively, leads to better engagement and higher satisfaction which ensure that customers feel valued and connected with your brand.
2) CLM strategies boost customer lifetime value (CLV) by keeping customers loyal and engaged over the long term.
3) Keeping existing customers satisfied leads to repeat business and long-term growth which is crucial for sustained business growth.
4) Using data and insights helps in making informed decisions throughout the customer journey. This helps improve each stage of the customer experience.
5) Dealerships can increase efficiency and run smoother by implementing the right strategies and using advanced technologies.
Conclusion
In short, it is important for dealerships to understand the customer lifecycle and manage each stage so that they can attract and retain customers and build a loyal customer base. The customer lifecycle management for automobile helps with enhancing customer experience by allowing auto dealers to address their needs. This focus on the customer journey eventually leads to stronger relationships and a successful automotive business.
