The importance of loyalty for every car dealership is becoming increasingly critical.

Dealers need it to handle the current unstable environment and outside pressures at work today. Those include the effects of reduced new-car sales during the pandemic, which in turn have caused a limited supply of used vehicles today.

One dealer describes it using the acronym “LOYALTY” and it goes something like this:

L: Is for lifetime relationships. Consumers want support beyond the initial sale.

O: Represents ownership confidence. Transparency creates peace of mind for your customers.

Y: Represents your dealership as their trusted source. Consumers return where trust already exists.

A: Stands for the after-sale experience. Service and maintenance define loyalty more than advertising does.

L: Is for loyalty earned through convenience. Digital reminders and maintenance tracking are easy and effective customer communications.

T: Represents transparency because it builds trust. The future of retail is a visible vehicle care history.

Y: Is the yield from strong customer retention. Retention is more profitable than acquisition is.

Any way you break it down, a high customer loyalty rate throughout the dealership needs to go from a nice-to-have to a must-have. The higher you raise your customer loyalty rate, the more stable — and more profitable — the entire dealership becomes.

Robert Grill is vice president of strategic client services at CARFAX.