How do you know if your marketing is working? Every business owner has asked this question, and the answer is critically important to the success of the business.
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Ad vendors are great salesmen – they stroke your ego while reaching for your pocketbook at the same time. While most vendors will offer reports and metrics and numbers (and if they don’t offer anything, walk away NOW!), the motive behind them is often to prove that what they’re selling works. The numbers they share tell the story they want.
But if you have nothing else to look at, how do you know if it’s working for you? Your marketing needs to support your goals, your business, and your customers.
Ad vendors can sit back and test new theories in your business at a safe distance. Even for those with the best intentions, if they don’t know how to properly measure the real results in your shop, they don’t know just how much damage they’re doing. You need to hold your ad vendors accountable for the success of your marketing.
Don’t Trust Your Gut
Unfortunately for shop owners, marketing is like an iceberg. Above the surface things may be looking good. You might see an increase in sales, new customers coming in the door, and it might look like the shop is growing. But it’s what’s under the water than can sink your shop.
Customer retention—along with its counterpart, customer attrition—is the silent killer. It's just your best customers, slipping away one at a time, until you wake up one day and your bays are empty and you don't know why.
You won’t feel it at first, because the numbers of clients dropping off isn’t huge—a customer here, a customer there. But it doesn’t take long for even a normal rate of lost customers to destroy a shop if you stop bringing in new customers or if you’re bringing in the wrong customers.
In fact, the number of people leaving your shop is one of the most important numbers you can measure. And while yes, every shop is unique, and yes, your community might be different, the uncontrollable portion of the people leaving your shop is usually around 20 percent, which means you lose twenty percent of your customers every year. And you need to replace these customers with new customers, which is why you turn to the ad vendors in the first place.
You can’t fill this 20 percent void with just any customer, you need the right customer. What matters more than coupon redemptions, new customers, reach or impressions is the quality, value, and trust of your customer base.
Looking Beyond the Reports
Measuring the quality, value, and trust of your customer base starts with retention/attrition. You’ll never get your retention rate to 100 percent in your shop—it's a fact of life that customers move or die or sell the vehicle you serviced.
But when your retention rate dips because of something you did, that's controllable attrition, and it can be a serious problem.
Is the bad mood of your service advisor affecting customer service? Are the coupons you’re sending packed full of fine print that makes anyone who tries to use it feel betrayed? Did a tech make a sloppy mistake that led to a come-back and thus lost the trust of the customer? If you betray the customer’s trust, you’ll never build a lasting relationship.
A close look at attrition can give you a peek at the trust of your customers. But how do you measure the quality and value of a customer to know whether your marketing is attracting the right kind of customers?
How much do they spend, on average, when they come into your shop? Do they listen to the recommendations you make or do they hand over a coupon for every service they request? Are they ambassadors for your shop, leaving five-star reviews online and referring you to friends and family?
Not every customer is a customer that you want in your shop. Coupon-clipping, morale-draining, price-shopping cheapskates will do nothing but hurt your business. But when you get them in the door, they raise car count and make the shop look busy. Don’t be distracted by the tip of the iceberg, and remember to look below the surface for the whole truth.
Getting a new customer through the door isn’t the goal. You want customers that will bring loyalty and long term value to the shop.
Is my Marketing Working?
If the quality of your customer base is dropping, your marketing is not working. If it’s staying the same, it’s not working. Every aspect of your marketing, from a direct mail piece to your website to the waiting room to your image, should be building up the quality, value, and trust of your customers.
But the hardest part is still coming – you have to identify what is working. In an ideal business, you could run only one ad at a time to know exactly how it affects your shop. But as shop owners, we don’t have the luxury. Our business, our success, our paychecks are on the line, and we can’t afford to put all our eggs in one basket.
With multiple ads circulating at the same time, including ongoing marketing like your website, social media, word of mouth, or digital ads, you need a way to track what brings people in to the shop.
The easiest way to implement source tracking is right at the front counter. Your service advisor is checking in a new customer, and casually asks, “How did you hear about us?” Select the right category from a drop down menu or add a note in the system, and just like that, you’ve got a source report.
But beware. Early in my time at Keller Bros. we were testing lots of different types of advertisements—everything from coupon mailers to radio ads to newsletters. We had labels for each individual ad in our source tracking system.
Based on the information we were tracking, we were getting a huge number of clients from our TV spot. So much so, I was ready to sign a contract to spend even more.
But when I checked the source report menu and found that "TV Spot" was the first item in the list of sources, I knew. I reordered the menu so a different choice was in the top spot for marketing. And just like that, customers coming in from the TV spot disappeared overnight. They were never there to begin with.
We have a saying: "the numbers don't lie." It means the numbers don't get emotional. If your marketing isn't performing, the numbers don't care how much you like the salesperson; the decision will be clear and unemotional.
But they can only tell you the truth if the numbers are real. If your service writers know that they can pencil whip the check-in process, that there's no accountability for following the processes and procedures, then you're as good as blind.
Don’t use this article as an excuse to blame your ad vendor for everything that goes wrong. Use it as motivation to take ownership over the success of your marketing. Attract the right customers, measure their value, quality, trust, and loyalty. Track every marketing piece you send, and look at what’s working and what’s not working. Think about why something isn’t working. And remember: the numbers don't lie!