Where are you spending most of your ad dollars, on acquisition or retention? The easiest and fastest way to grow your business is to keep your current customers coming back. Here is what we know:
• Existing customers are 60-70 percent more likely to buy from you compared to 5-20 percent of new prospects
• Existing customers are 50 percent more likely to try new products compared to new customers
• Existing customers spend 31 percent more compared to new customers
Is your repeat customer count 60-70 percent or more of your total customer count? If not, why? Your current customer base is your most valuable asset. We all know it is easier and costs less to keep an existing customer than it is to win a new one. One of the most common mistakes lube shop owners make is spending too much time and money on attracting new customers rather than fostering the relationship with customers they already have. Once you’ve a made a connection and demonstrate you care about your customers’ needs and what is best for them — not just your bottom line — you’ll have a customer for life. When you do, it’s possible to double or triple your growth rate because you are no longer replacing lost customers. Your new customers are adding to your growth rate.
Show Me the Money: Where Are You Spending Your Ad Dollars?
Are you focused on building loyal customers that return again and again? Do they refer you to their friends? Do they support you on social media with positive reviews? If you are focused on building loyal customers, it should be reflected in your advertising budget. An established store’s advertising budget should have the majority of their dollars dedicated toward their repeat customers. For example, if your repeat customer percentage is 60 percent, your ad dollars spent targeting them should also be 60 percent or more.
With so many quick lube service centers for customers to choose from, we’re lucky if they even remember where they had their vehicle serviced last.
To make a lasting impression on your customer, you must make a deeper connection than just providing a service and taking their money. Think about your best friends, how did you develop those relationships? I bet you spent time together; you liked their personality. You respected their character and, therefore, trusted them. You see them often, you call them frequently, you email them and you follow them on Facebook — you get the picture. Building a loyal customer base is exactly the same. They must like and trust your brand’s character when they think of your company. If they don’t, there is no compelling reason for them to return to you.
The Relationship Does Not End When the Service is Completed
Companies like Apple or Starbucks nurture their relationship with their customers. They communicate regularly in a variety of ways and, of course, provide second-to-none customer service.
The first invitation to return should take place before they leave. Thank them at checkout, walk them to their vehicle and thank them again. There are companies that literally rollout a red carpet for them as they open the car door and thank them again for their patronage.
Let them know as soon as possible after their service, you appreciate their patronage by sending them a thank you email. Of course, this is only possible if you have collected their email address. Are your customers giving you their email address? If not, why? When you have a trusted relationship with your customer, they’ll want to hear from you and will gladly give you their email address.
Don’t neglect your customers between services. Just like best friends, you must continue to make contact to build trust. One way is to use a drip email campaign using a newsletter that provides information your customers may find useful, even if they don’t directly relate to your service: topics like great summer roads trips, vacations on a tank of gas, getting your car back-to-school ready, holiday auto gift ideas etc. Remember, your goal is to serve your customers with the added benefit of keeping your brand name top of mind.
Timely Reminders
Today’s oil change schedules vary by manufacturer. You should have a CRM program that has the flexibility to send high-quality reminders at the correct mileage interval. If possible, utilize email first to reduce your cost. Why send a post card if an email will get the job done? That’s not to say you should disregard post cards altogether. Emails may be convenient, but we also know that many are deleted and never opened or sent to the spam folder.
Snail mail post cards then serve a useful function. In this case, size matters. The larger six-by-nine-inch cards stand out in mailboxes and are more prominent when stacked with other mail. Take a good look at your budget, and consider sending more than one card at different intervals if they have not yet come in for service. This is where you save the customer. By sending the reminder at just the right time, you will prevent them from going elsewhere.
Bring Them Back
There are many reasons why a customer might try someone else, but don’t panic; you can still bring them back. If they strayed once, get them the next time with another timely reminder. This time, assume they went elsewhere, and you now send a reminder when they are due for their next oil change. Most dormant customers will be receptive to another offer at the right time and return.
Reactivating previous customers who once found you as a satisfactory service provider is the easiest and most cost effective way to grow your revenue. When they do come back, show them some love and welcome them back. Once they’re back, make sure you have their email address and get them on your drip campaign. Keep building the relationship by staying in touch.
Do you know what your customers think of you? Provide them with a short survey that will give them the opportunity to tell you. Treat your customer as a valued partner. Communication is a two-way street, so talk to them. Email them back and thank them for their kind remarks, and most importantly, address a problems promptly.
Are You Social?
Social media offers you numerous ways to keep your brand top-of-mind with your customers. For the busy store operator, social media outlets can be too time consuming. If this is you, consider hiring a social media advertising specialist. There are many to choose from, and each offer different levels service.
To get the full value of social media, you must engage in the conversation. The engagement is where you develop the friendship. They’ll learn about your company’s character and personality. A word of caution on this point, social media for your business is not the same as your personal social media page Facebook, twitter, etc. Post only professional images and messages. If you haven’t already developed a Facebook business page, do it, and ask your customers to “like” your page. Use this page to post useful automotive articles and other information.
Be prepared to answer a post from a customer who has a problem, but don’t be afraid of the problem going public because the public will also notice how you handled the situation. Let them see how you stand behind your service. Often, after you have taken care of their problem, they will be become your advocate.
Another advantage of a Facebook business page is the ability to advertise your page or boost your post. You can start a boost for as low as $1; the more you spend the more people will see your post. The really great thing is you can target your ad by location, age, gender, income and interest. Here’s a tip — add your competitor’s brand, and you’ll reach many of their customers. Start small, make it fun and follow the results.
Not all Customers are Created Equal
Knowing the real value of a customer will allow you to make smart marketing decisions. Measure the lifetime value of your customer. The customer lifetime value (CLV) is the amount of gross revenue or net profit a customer will generate in their lifetime. Now compare your CLV to your cost per acquisition to truly understand each customer’s value. This is where retention beats acquisition hands down.
We have all heard of Pareto Principle or the 80/20 rule. This is where 20 percent of your customers will give you 80 percent of your sales or profits. These are the ones who return again and again for total vehicle maintenance. Loyal customers give you their email address because they trust you and then they buy from you. Consider a special thank you offer to them once a year. Thanksgiving is the perfect time for this special notice.
All of the above are just tactics and tools to help you refocus your energy and your dollars on your most profitable customers — the ones you already have.
