Ward's Dealer Business  |  Steve Finlay  |  February 1, 2010

Where do “orphaned” customers go if a dealership closes, as 1,467 did through November of this year? Sometimes straight to the competition.

“Customers are convenience driven and tend to shop at dealerships near them,” says John Frith, vice president-retail channel solutions for Urban Science, a consulting firm that provides automotive retail services to auto makers.

If a local dealership closes, nearby other-brand stores that remain standing could see their floor traffic increase. It’s a case of customers showing more loyalty to a dealer than an auto maker, Firth says.

He and colleagues outline ways auto makers can work with their surviving dealers to prevent such brand defections and increase so-called throughput — or sales per store — for the remaining stores.

Ways to do that include auto makers providing their retailers with enhanced customer information beyond just the names of a closed dealership’s customers.

Urban Science and other firms garner such enhanced data to create “customer profiles.” Those include demographics, when customers might buy a vehicle based on previous purchase cycles and how much they are likely to spend.

Also available to auto makers for their dealers are lead-scoring systems that gauge which prospects are ready to buy and which aren’t so dealers can handle them accordingly.

“It is in an OEMs best interest to arm their dealers with as much customer information as possible,” says Katherine Kress, Urban Science’s vice presidentcustomer marketing solutions management. “If an OEM closes a dealership and doesn’t take other action beyond that, it will likely lose market share.”