CLEARWATER, Fla. — Dealers are losing an average of $380,000 annually in service revenue due to missed opportunities to digitally engage with, and retain, their millennial customers. That finding was highlighted in AutoLoop’s “2016 Digital Engagement (ADE)” study, which surveyed 1,000 auto consumers and analyzed the purchase behavior of more than four million customers representing 1,000 U.S. dealerships.
“By 2020, millennials will command $1.4 trillion annually in purchasing power and represent 30% of total retail sales, so it’s important that dealerships know how to win their business,” said Doug Van Sach, AutoLoop’s vice president of analytics and data services. “Although millennials as a whole are more brand-fickle than other generations, it’s a mistake to believe they are incapable of becoming loyal customers. Our research uncovered opportunities in several key areas for dealers to better cater to this elusive demographic.”
AutoLoop’s study found significant gaps in the dealership service experience that, for millennials, has resulted in a 12% lower service customer retention rate (than previous generations), 50% lower customer referral rate and 35% lower share of wallet. Combined, these factors lead to a loss in service revenue of $380,000 annually for the average dealership.
The survey revealed that dealers are falling short in three key areas that rank high in importance to millennial service shoppers: (1) Insufficient online presence for service department; (2) lack of digital engagement with tools such as online scheduling, mobile apps, SMS/text notifications and ecommerce; and (3) the in-store service experience.
To download a PDF of the study, click here.