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Our Blog
 

Sales Tips

Driving retention and repeat business

 
customer retention management car dealership
 
 

Mark Greenfield

Contributor

Published 07 Nov 2019

This article was originally published in the Autofile Magazine - Sep 2018 issue. 

10 second summary

  • Repeat customers provide a superior advertising return on investment compared to acquiring a new customer.
  • You need to stay in regular contact and be present enough in your customers mind to be considered when it's time to buy a new vehicle. 
  • Invest in a customer relationship management system to stay in regular contact with your customers. 

READ TIME APPROX 5 MINUTES

How many repeat customers does your dealership sell to on average per month?

If you don’t know the answer, then it's best you stop reading and find out because it’s something you should know regardless of whether you’re a salesperson, sales manager, dealer principal or marketing manager.

Your number of repeat customers divided by total sales each month is your percentage of repeat businesss. This will give you a feel for what level your repeat business is comparative to your total number of sales. 

Regardless of what the number or percentage that is being achieved, there’s an opportunity to increase sales from this highly valuable customer – the repeat one.

 

Repeat customers have many of the following attributes:

  • They more than likely trust you.
  • They are your most profitable customers.
  • They negotiate less, off the back of trust.
  • They are more likely to utilise your finance offering.
  • They are likely to have a vehicle you would love to stock and sell again.
  • They provide a superior advertising return on investment compared to acquiring a new customer.
  • They are what you want, and as many of as possible.

 

Determining your potential opportunity of repeat business

To determine the potential opportunity you have of repeat customers in one month, do a simple equation.

  1. Total units sold between two and three years ago over a 12-month period = X.
  2. Then X divided by 12 = Y.
  3. Y = The number a repeat customers potentially in the market during any month buying a new vehicle.

So, how does Y compare to the number you are selling to on average each month? The difference equals a massive opportunity.

Getting all of it will be hard, but getting several more than what you’re getting now isn’t.

In most cases, the number of repeat customers you are selling to falls well short of what the potential is.

 

What are you doing post-sale?

The next question to consider is: What are you doing to maintain a relationship with customers post-sale? Provided that was a good experience, that aids and fosters retention, and consideration of your dealership, when it’s time to trade in and purchase their next vehicle?

Not talking to them from the time you sold the car isn’t going to maximise the opportunity. In this scenario, the repeat customers you do get means you had created an experience good enough for them to come back.

How many more repeat customers could you get if you were proactive in retention marketing? Doing nothing over two to three years, and then calling or emailing them to come and buy a new car doesn’t cut it. They haven’t heard from you since purchasing, so unless they drive past your dealership every day it’s unlikely you’ve been, or will be, top of their minds when it comes to their next car.

 

The key is keeping in regular contact

The key is constant, but not overwhelming, contact during the ownership cycle. The bare minimum I would recommend are the following touchpoints, which can be via text, email or the old-school letter.

  • Thanks for choosing us / buying from us – within seven days of sale.
  • Happy birthday – annually.
  • Season’s greetings – each year before Christmas.
  • Trade in and trade up – this can have variables, but most can be communicated at the 30-month mark in their current ownership.

There are plenty of other soft touchpoints during the customer’s ownership cycle you can also consider, but this is the bare minimum. You need to stay in contact and be present enough in the consumers mind to be considered when it’s time to buy a new vehicle.

In addition, you also have the added bonus of being mentioned when a friend or family member is thinking of purchasing. Word-of-mouth referrals are a fantastic source of business, but you also need to foster existing customers proactively to influence referrals from them, as referrals drop off pretty quickly after weeks two and three of buying a car.

These touchpoints aren’t new by any stretch of the imagination. You can go through these basics in retention through history books on sales training. It’s common sense and should be common practice if you want to sell more cars to existing clients and make it represent a solid, ongoing part of sales.

There are sales people out there who sell 10 cars every month, just to repeat customers. The rest of their sales are to new clients. There are dealerships selling 20-30 units a month to repeat customers.

So many dealerships start a new month on zero wondering what the month ahead holds. Proactive dealerships can start ahead of the game knowing what number of existing customers they are likely to sell to.

The harsh reality is, if you’ve been doing nothing with your buyers post-sale, this is what you’ve missed out on over the past few years in sales.

 

Take action now!

Take action now. There’s never a better time to start investing in customer relationship management (CRM) than immediately.

If you don’t have the existing tools or systems to make CRM simple, efficient and easy, then please talk to our dealer solutions team – we can help. We offer fully automated CRM solutions with our automated marketing programmes for dealers (AMPD) CRM.

Whether you use Motorcentral’s dealership management system or not, we can get AMPD CRM working for you. To learn more, call 0800-623-687 or email dealersolutions@motorcentral.co.nz. 

--

Disclaimer:
The Motorcentral blog is intended for educational purposes only. All writers opinions are their own and nothing published on this blog should be interpreted as a recommendation or advice in any way. Motorcentral is also not responsible for and does not verify accuracy of any of the information contained within this blog.
In the event third parties are referenced within this article, Motorcentral is not necessarily affiliated with those third parties.

 
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