Auto Shop Coaching Blog

How to Build a Loyal Customer Base

Most people get car washes three or four times a year, wherever convenient, and pay about $10 for the service. But, as you may have noticed, car washes have become much more profitable thanks to a new customer loyalty tactic: Subscriptions.

With a $20 per month subscription, not only does the average person’s car wash bill increase from $40 to $240 per year, but they also become loyal to one brand. And that’s turning the sleepy mom-and-pop industry into a $1.5 million-per-location gold rush.

To boost your top and bottom-line results, customer loyalty tactics like this and exceptional service can transform your shop from a one-time stop to a lifelong destination.

But before we dive in, if you want to find ways to optimize your entire business, sign up for our in-person or online training event, The Empowered Auto Shop Owner.

Exceptional vs. Expected Service

The best customer loyalty programs are worthless if you don’t provide an exceptional baseline service. Customers expect you to repair the vehicle on time and budget. So, “getting it right the first time” isn’t exceptional service—it’s the expectation.

Exceptional service means “wowing” the customer.

If you notice the vehicle is dirty, consider arranging for a car wash or interior cleaning before returning it to the customer. Or, if it’s a little low on gas, consider topping off the tank. It could be as small as leaving a mint and a handwritten thank you on the dashboard. Many customers see these small acts as a business going above and beyond.

Another strategy is to level up your non-vehicle experience. For instance, most shops offer little more than stale coffee and a vending machine in the waiting area, but you might offer an assortment of premium snacks and beverages or toys for children to play with while waiting.

You can build these small costs into the price of repairs to ensure they don’t eat up the margin.

It’s Not a Job, It’s a Customer

Imagine a first-time customer who comes in for an oil change or tire rotation.

Some shop owners would view the customer as a one-time job for a low-margin oil change—but that would be a huge mistake.

The average driver incurs at least $800 per year in maintenance costs, including oil changes, tire rotations, multipoint inspections, and unexpected repairs. And, of course, that number goes up for older vehicles that may need more repairs.

Savvy shop owners see an opportunity to win over $800+ of business annually. While the oil change might be a low-margin job, capturing that customer’s higher-margin spending over the years is an opportunity. The next time they visit might be for a more costly repair.

One way to convert these one-time customers into repeat customers is by booking the following oil change on the spot. Then, at each oil change, you can inspect the vehicle for additional repair opportunities to increase the revenue and margin of each visit.

Alternatively, you can take a page from the car wash industry’s book and offer a monthly subscription. For example, you might charge $20 monthly for unlimited oil changes, tire rotations, and other basic services and a discount on other repairs.

Build Loyalty with Memberships

Membership programs take these recurring revenue opportunities a step further.

Rather than booking the next appointment on the spot, you might offer customers a membership card with special perks and discounts.

For example, you might offer a free car wash with each visit (or after accruing a certain number of points) as a perk or special member-only discounts on regular maintenance or repairs.

You could even partner with local businesses like gas stations or insurance companies to expand these perks.

There are many ways to structure these programs:

  • Punch cards. Customers receive a punch card, and after returning it a certain number of times, they receive a gift or service.
  • Points programs. Customers accrue points with each purchase and can redeem them for gifts or discounts.
  • Tiered memberships. Customers can choose between multiple membership subscriptions with different perks and discounts.

The goal is not only to earn repeat business but also to get the first phone call when unscheduled events—like a car accident or a need for new tires—happen. These are usually higher-margin services than oil changes or other regularly scheduled maintenance and can significantly impact your top and bottom line.  

You can put these membership details on an oil change sticker in the car window or provide a card to keep in the vehicle. This way, they can easily access the information whenever they need it and know they’re getting a member-only experience.

Automate Your Follow-Ups

Do you remember your next dentist appointment? Of course not! You probably rely on automated email or text message reminders.

Auto-shop software makes creating loyalty programs easier than ever, automating follow-ups with customers and reducing friction with online appointment scheduling. At the same time, you can use these platforms to share exclusive discounts and promotions or incentivize them to refer friends, family, and colleagues to drive word-of-mouth marketing.

For example, solutions like Kukui or ShopMonkey enable customers to book appointments online, conduct digital vehicle inspections, and send automated text messages and emails. This results in a much more streamlined experience than repair shops relying on phone calls and hand-written schedules.

The key to success is taking the time to properly set up and optimize these solutions to deliver the best results. In addition, you should carefully consider your margins when developing rewards programs to ensure you’re not sacrificing too much profit to book revenue.

Measure & Improve Over Time

Management expert Peter Drucker once said, “You can’t improve what you don’t measure.”

Many software applications automate the collection of these metrics, but you can also use surveys and other techniques to gather the information.

Some KPIs you should track include:

  • Repeat Customer Rate. The ratio of new customers to returning customers over time. Generally, you should aim to lower this ratio over time as more repeat customers come in for business. However, repeat customer rates may be cyclical, too.
  • Referral Sources & Rates. Tracking your referral sources and rates can help assess customer satisfaction. A high referral rate indicates that you’re delivering exceptional service, which results in more customer loyalty.
  • Customer Satisfaction. Simple surveys, such as Net Promoter Score (NPS), can tell whether customers are satisfied. According to NPS creators, scores above 20 are favorable, and above 50 are excellent.
  • Average Revenue per Customer. Try to constantly improve the average revenue per customer, especially for new customers coming in for low-margin services. These metrics can tell you about the success of your upselling activities.

You should also ensure that introducing loyalty programs doesn’t negatively affect your overall P&L. For example, if you see strong revenue growth but a drop in profits, you may consider reducing the discounts or increasing prices.

Leveraging the Summer “Boom”

Leveraging seasonality to maintain customer loyalty involves combining excellent customer service, strategic marketing, and value-added services. Shop owners can offer seasonal promotions tailored to summer needs, such as air conditioning check-ups or summer road trip readiness checks and implement loyalty programs where customers earn points for future discounts or free services. Ensuring top-notch customer service with friendly, knowledgeable staff and conveniences like free pick-up and drop-off services or comfortable waiting areas enhances the customer experience.

Timely and relevant communication, such as sending reminders and promotional offers via email or SMS and using social media to engage with customers, keeps them connected. Providing value-added services like complimentary car washes with major repairs and offering detailed report cards explaining the services performed and future maintenance recommendations can further enhance customer satisfaction. Participating in local events, sponsoring community activities, and hosting workshops or free vehicle maintenance clinics increase brand visibility and build trust.

Following up with customers to ensure satisfaction and encouraging feedback for continuous improvement are also vital. Consistent quality and reliability, even during the busy summer months, help build trust and loyalty. Using high-quality parts and skilled technicians ensures reliable repairs. Encouraging referrals through bonuses or discounts and offering maintenance plans for regular check-ups throughout the year can keep customers returning beyond the busy summer season. Combining these strategies helps shop owners make the most of the summer boom while building and maintaining strong customer loyalty.

The Bottom Line

It’s hard to overstate the value of customer loyalty—just look at the transformation of car washes from a mom-and-pop business to a $1.5 million per location industry! By investing a little extra time in building membership programs, you can capture more of the $800 per year that the average person spends on car maintenance.

In today’s competitive retail environment, delivering exceptional customer service is crucial to differentiating your shop from others and retaining loyal customers. Download our Exceptional Customer Service Checklist for a comprehensive, easy-to-implement guide to elevate your customer interactions and ensure that every visitor to your shop returns a loyal customer.

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ATI Experts is a team of experienced ATI coaches who collaborate to write industry articles. They leverage their extensive knowledge and proven success to provide actionable strategies for improving the performance and success of repair and collision shop owners.