Planet Honda New Jersey has earned its reputation as a top-performing dealer. The Union, New Jersey, store ranks in the top 10 nationally in both new and Certified Pre-Owned Vehicle sales; its leasing game is on par with the best dealers; its Honda Care Vehicle Service Contract quotient stands at 64%; and it’s on track to earn Council of Excellence for the second year in a row.
But where Planet Honda New Jersey really shines is in customer retention. The store consistently achieves a retention rate of around 48%—well above the national average.
“A lot of our success is based on the fact that we take a captive-first approach to everything,†says Bill Feinstein, platform general manager at Lithia Motors, Inc., which owns the dealership. “If there’s a way to go with Honda Financial Services (HFS), we do. The data clearly shows that we see double the retention when HFS is the lender.â€
Planet Honda New Jersey’s roots go back to the 1970s. Renamed in 1998, the store now boasts a modern showroom and service department.
The store changed hands in 2021 when it was acquired by Lithia Motors, Inc., a dealer group with 292 stores representing 40 brands. But in many ways, it hasn’t changed at all.
“From an operational standpoint, we have more support, but nothing has really changed,†Feinstein says, noting that most of the store’s employees stayed on after the change in ownership. “One of the things that made this a successful transition is that our core values lined up directly with Lithia’s core values.â€
One such value is earning customers for life—something Planet Honda New Jersey has focused on for many years. Customer service is key, of course, but leasing also plays a big role in creating return customers, with a lease rate of close to 60%—nearly two and a half times greater than the national average. Of those customers, over 59% return to the store for their next vehicle.
“Leasing is like an annuity because we know those customers have to replace their vehicles every three years,†Feinstein says. “If a salesperson sells 200 leases a year for three years, then they can count on 120 new leases every year to come, if they do everything right.â€
That means building strong relationships with customers. In addition to regular touch points for service, the store starts the next-vehicle conversation 14 months ahead of lease maturation.
“Their business development center also aligns their communications with the end-of-term communications we send to customers, so that helps keep the conversation going in the right direction for retention and loyalty,†says Bruce Wayne, American Honda Finance Corporation dealer relations manager.
A pivotal decision was splitting the business development center into two departments: a rotation group and a retention group. Each group operates on a different timeline and with a different focus.
“Retention is a long-tail process,†Feinstein says. “Instead of the usual 30 days from inquiry to purchase, we’re looking at 14 months of working with our lease customers to build a relationship so that when they need to make that decision for the next vehicle, they think of us.â€
He continues, “We don’t want a transactional relationship with our customers. We want to retain them for service; we want to sell vehicles to their family and friends; and we want to be their transportation solution. It’s not just about a sale today. It’s setting up the sale for the future.â€
