Part 1 of the NexGen™ Retention Series: “The Power of Relationships That Create Retention and Drive Revenue.”
The Illusion of Success
Dealers have long celebrated strong Customer Satisfaction Index (CSI) scores as proof of success. After all, a customer who gives you a 10 out of 10 must be coming back for service, right?
Unfortunately, that’s rarely the case.
In today’s market, satisfaction doesn’t guarantee loyalty. It simply means the customer liked the buying experience — at that moment. But once the glow of delivery fades, many customers drift away quietly, especially after the factory warranty expires.
The Data Tells the Real Story
According to Cox Automotive (2023), franchised dealerships are losing ground to independent repair shops. Their share of service visits has dropped from about 35% in 2021 to just 30% in 2023.
That means seven out of ten customers are taking their vehicles somewhere else for maintenance — even though most report being “satisfied” with the buying experience. Satisfaction may win the sale. Loyalty wins the lifetime value.
The CSI Trap
The problem isn’t the CSI score itself — it’s how it’s used. CSI was designed to measure short-term emotion, not long-term behavior.
When dealers rely on CSI as the ultimate retention metric, they end up managing smiles instead of relationships. They focus on the handshake, not the handoff.
And the weakest link in that chain? The connection between Sales and Service — the moment when ownership begins but the relationship too often ends.
Where Retention Slips Away
Most defections don’t happen because customers are unhappy. They happen because:
- The deal closes after the service department is closed.
- There’s no introduction to a service advisor.
- The customer leaves without a relationship beyond the salesperson.
When that hand-off doesn’t happen, the customer’s first oil change becomes the independent shop’s opportunity — and the dealership’s loss.
Why It Matters
The cost of acquiring a new customer is 5–7 times higher than keeping an existing one. Every defection represents not only a lost service visit but also lost parts revenue, accessory sales, warranty work, and ultimately, future vehicle sales.
Even a 5% increase in retention can improve profitability by 25–95%, according to Bain & Company’s service industry studies. Yet many dealers are investing heavily in lead generation and CRM automation, while ignoring the most profitable CRM strategy of all: keeping the customer they already earned.
The Loyalty Equation
Loyalty is not measured by smiles or survey scores — it’s earned through consistent connection, convenience, and care.
Dealers who intentionally connect Sales and Service are seeing:
- Higher first-visit retention within 90 days of delivery.
- Greater cross-vehicle service engagement within the same household.
- Stronger post-warranty service loyalty.
- More repeat vehicle sales and referrals.
That’s the future NexGen™ is designed to create — a dealership experience where every hand-off becomes a relationship, and every service visit fuels the next sale.
The Next Step
In Part 2: The Economics of Retention, we’ll break down the actual dollar impact of service defection and show how much money is being left on the table.
Because the numbers tell a clear story:
It’s not about satisfaction anymore.
It’s about connection.
Source: Cox Automotive (2023), “Dealerships Losing Ground to Independent Auto Repair Shops” via Autobody News.