Choose the right customer retention program for your shop

May 2, 2016
Acknowledging the need to advertise to your established base of customers is the first step in reducing attrition. The second — and much harder task — is to find an effective retention program that will provide you with a good return on your investment.

I don’t have to tell you that retaining customers is one of the biggest challenges facing shop owners today. It’s estimated that automotive repair shops are losing more than half of their customers each year. The losses are due to a variety of factors. Cars are better built and require fewer repairs, which is extending the number of days between visits. Shop owners are also seeing customers jump to dealerships, which in contrast to the aftermarket sector, are managing to retain 62 percent of their customers annually.

Part of the success dealership service centers are experiencing is due to warranties and pre-paid maintenance packages, which ensure customer loyalty. However, dealerships have also become more strategic about developing marketing programs targeted to reach existing customers across a variety of platforms. Independent service centers will need to adopt a similar approach if they expect to reverse the downward trend in retention. If you’re only marketing with the goal of attracting new customers, you’re leaving your existing customers vulnerable to outreach from your competitors.

Acknowledging the need to advertise to your established base of customers is the first step in reducing attrition. The second — and much harder task — is to find an effective retention program that will provide you with a good return on your investment. The goal of this article is to provide you with some guidance about which features to consider when searching for a retention solution. Keeping these characteristics in mind will help increase the chances of picking a program that will deliver the results you want.

One of the key aspects of any retention program is how user-friendly it is. Shop owners are typically too busy running their businesses to devote a lot of time to managing retention campaigns. In my experience with direct mail, if a marketing program is overly complicated or cumbersome, shop owners will stop using it. So, my advice is to find a retention solution that is intuitive and user-friendly. Once it’s set-up, it should be automated, so you don’t have to worry about it. It’s also important to choose a product that will integrate with your Point-of-Sale system, so you can pull essential data on which you can base your campaigns.

And speaking of data, I am a big believer in using a retention program that is data-driven. There’s no point in simply sending out generic offers to your existing customers at random intervals. Instead, rely on the information you already have to craft promotions that are well-timed and better targeted. For example, let’s say you have a customer who is not due for an oil change, but your records show he declined a brake pad replacement a month before. Rather than sending out the typical oil change promotion, you can use his service history to send an offer for discounted brake pad replacements instead, which is more likely to prompt a call. You can also use local and national data to improve your response rates. A savvy retention program will factor in a variety of data, such as state inspections that might be required for vehicle registrations, or national trends on which types of offers are more likely to be redeemed. This is exactly the kind of information you want to build your campaigns around.   

Now, you can have really great targeted offers, but if you’re only sending those offers out through one marketing channel, you’re limiting your potential responses. When I talk to shop owners about retention programs, most people assume I’m talking about digital-based programs. At this point, some shop owners think simply sending out follow-up emails to existing customers counts as a retention program. But with all the digital clutter these days, that strategy is bound to come up short. Marketing 101 suggests that it takes many contacts on multiple platforms to make a sale. To diversify your outreach, consider incorporating direct mail into the mix. It’s easy to delete an email but somehow harder to toss a printed offer for a free tire rotation or vehicle inspection. Plus, the postcard you send helps reinforce the email reminders a customer may have already received. Marketing via text message can also play a role as long as you restrict texts to the customers who have opted in and you tie them to appointment reminders and other messages that might already be of value to your customer base.

Once you have identified a program that’s data-based, easy to use and covers a wide range of channels, you need to be sure there’s a way to measure its effectiveness. Simply tracking redemptions on coupons doesn’t provide you with a full picture of how well your campaigns worked. As a result, it’s wise to look for a program that includes analytics, so you can drill down and see response rates by zip code, make and model, and marketing channel. These types of metrics will enable you to calculate your return on investment in a much broader way. Analytics can also be help you refine your future marketing efforts, by revealing the neighborhoods and promotions most likely to produce the highest response rates in future campaigns.

It’s also important to utilize a retention program that includes call tracking, which will allow you to identify missed calls for follow-up opportunities. If those calls are recorded, you can also get a sense of how well your staff is managing leads and whether more training might be needed.

Last, but certainly not least, cost must always be a consideration. Remember that you often get what you pay for, so settling for a cheaper option focused solely on sending follow-up emails isn’t going to buy you much. By the same token, paying a lot for a program with a lot of unnecessary bells and whistles that are hard to understand or implement, isn’t going to be worthwhile either. Before embarking on any marketing initiative, I recommend taking the time to determine what you’d like to achieve through your new effort and how much you would be wiling to invest to reach those goals. When it comes to retention, your objectives might vary from improving response rates to driving more repeat visits to increasing sales. Whatever you decide, make sure your program allows you to measure your results to ensure that your investment is paying off. 

Your customers are being inundated with marketing messages from your competitors daily. Simply hoping that they’ll return to your shop because you’ve provided good service in the past isn’t enough. You need to cultivate your relationship with your customers by implementing a solid retention program that keeps your shop front of mind.   

Simply put, retention should be key strategy in your overall marketing mix.

By using a combination of direct mail and email marketing aimed at retaining existing clients and acquiring new customers, you’ll drive in new business to your shop while building loyalty.

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