LAWRENCEVILLE, Ga.—What is the lifetime value of customer loyalty in the automotive industry?
More than $50,000 to a dealership, according to a new white paper from Black Book.
Black Book, jointly with The Appraisal Lane, has published awhite paper, “The Value of Loyalty: Customer Lifetime Value in the Automotive Industry.” The lifetime value of a customer to a dealership was determined after factoring in the potential revenue from referral business, Black Book said.
“Many automotive sales professionals mistakenly view car buying transactions as one-offs, assuming that the customer is unlikely to transact with their brand, or dealership, ever again. At the same time, customer satisfaction in the automotive industry lags behind other industries. This white paper discusses how dealers can maximize automotive customer lifetime value (ACLV) by improving the trade-in process,” the company stated.
Most Important ‘Differentiator’
“Customer experience is a dealer's most important success differentiator today,” said Jeff Risner, CEO of the Appraisal Lane. “Lower margins, increased competition, and dwindling loyalty are eroding business. A better customer experience starts with a better trade-in process. By focusing on this, dealers can expand their share of a customer's lifetime value, improve CSI, and create future opportunities for sales, service, and referrals."
Valuing a consumer’s vehicle with precise data is key to building and retaining consumer confidence, according to the white paper.
“Utilizing a 17-digit VIN decode helps dealers quickly and precisely appraise and value a customer’s trade-in,” said Jared Kalfus, executive vice president, revenue for Black Book. “In today’s data-driven environment, it’s more important than ever to have that precise valuation in order to maximize profit.”
Also Discussed
The white paper also addresses:
- How to eliminate pain points associated with the trade-in process
- How to build trust with pricing transparency
- How to use the right data to increase consumer confidence