I don’t know one shop owner who doesn’t want to increase sales. Yet, many fail to dedicate time to the one thing that is guaranteed to drive sales — customer retention. Cultivating loyalty among your customer base is a surefire way to ensure a steady flow of business. Unfortunately, shop owners often put all their energy into luring new customers, mistakenly assuming that existing customers will automatically return to their shop when the need arises.
Placing more focus on improving customer retention will not only increase sales but will also drive up your average repair order, since customers who are familiar with your shop and trust you are more likely to spend more money than those there for the first time. It also costs more to acquire a new customer than to keep an existing one. How much more? According to the Harvard Business Review, customer acquisition costs businesses anywhere from five to 25 times more than customer retention.
So, how can you keep your customers happy and coming back? The first step is to make sure you’re delivering an exceptional experience every time they visit your shop.
Offer excellence
You may not realize it, but customer retention begins the minute someone searches for your shop online. If you offer a well-thought out, easy to navigate website you’ll not only stand a better chance of attracting them initially but into the future. Your physical shop should match your online presence. The branding, color scheme and offers should be the same as what a potential customer encountered online. First impressions are key. What does a customer find when they approach your shop? Is the parking lot well-lit and secure? Is your shop clean and inviting? Is your staff welcoming? Do they greet customers promptly? All of these characteristics factor into whether a customer will make a second visit.
Providing outstanding customer service will also differentiate your shop from competitors and make it easy to retain customers. As I’ve discussed before, the best way to stand out is to become a “yes” company. Being a yes company means going above and beyond to accommodate customers even when it’s inconvenient. For example, instead of turning down a last-minute oil change when your technicians are busy with a major repair job, find a way to fit it in and you’ll earn a reputation for convenience and flexibility. Open your shop on Saturdays to provide more options for customers who have difficult stopping in during the week. When a customer brings their vehicle to your shop, make a point of keeping them informed on repairs/services even if it creates extra work for technicians or front desk staff. Going the extra mile – while often challenging — will make your shop memorable.
Make marketing a priority
Let’s say you have the customer service part of the puzzle mastered. You’ve established such a strong reputation that your previous customers are guaranteed to return, right? Well, not exactly. Don’t forget that your competitors are constantly marketing to your customers and if their messages hit at the right time, that shop might be the one your customer calls for their next maintenance or service concern. To keep pace, you can’t take anything for granted — you have to market, too.
A great option for reaching your existing customers is direct mail. With direct mail, you can target customers closest to your shop by income, car make and a variety of other variables. An easy way to connect with existing customers is to simply incorporate your current customer database in the mailings you might be sending as part of your customer acquisition efforts. In fact, I always recommend that shop owners never remove existing customers from their direct mail campaigns. At a minimum, this approach ensures that your existing customers are receiving your messages on a monthly or quarterly basis and you’re able to blunt the impact of competitors.
For customers who have spent significant sums in the past — say $300 or more — I suggest a more aggressive strategy. Instead of just including this group with your larger mailings, target them with a gift card worth $25 off any service. This provides a stronger incentive to return. You can also personalize your postcards to these customers with information about their vehicle, citing specific services or maintenance that might be coming due. By offering discounts on the specific services an existing customer needs, you give them a stronger reason to use your shop rather than a competitor offering a more generic promotion.
Foster connections
Newsletters are also a good tool for cultivating loyalty – particularly among those customers who are focused on more than just price. For independent shop owners taking the time to develop a printed newsletter helps distinguish them from corporate chains, whose marketing materials often lack that personal touch. In terms of content, the newsletter should give customers the chance to learn a little more about the shop and their local community. Highlighting the owner, employees, community activities, recipes and even sharing a few jokes will make this piece feel less promotional and more compelling to readers.
Digital options
Of course, it’s impossible to discuss marketing strategies for customer retention without touching on the opportunities now available through digital media. While email has always been a great way to easily remind existing customers about upcoming service and current promotions, that’s just the tip of the iceberg in terms of digital options. Geotargeting has opened a whole new world of possibilities for marketers. The practice allows advertisers to deliver digital content to potential customers based on their location. For example, a shop owner could send a targeted ad to a person searching for Toyota repair within a certain mile radius of their shop. When it comes to customer retention, geotargeting can be especially powerful because you can deliver ads based on buying patterns and past behaviors. Geotargeting can also work in concert with direct mail. You can set up what’s known as a “geofence” around the homes you’ve mailed to and then deliver digital ads to those residents both before and after sending a mailing, helping to reinforce the messages on your postcards.
One last thing worth noting is the importance of tracking data. It’s difficult to market to existing customers unless you have information on who they are, how frequently they visit your shop and how much they spend when they do. With that data in hand, you’ll be able to better develop advertising and promotions to drive those customers back into your shop. It also makes sense to track customer count and revenue, average repair order, offer redemptions and call counts per day, week and month. Analyzing that information will give you a better idea of how to evaluate the success of any marketing campaign and will make it easy for you to figure out what to adjust if things aren’t working.
The bottom line is you’ve got to deliver high-quality service and value to give customers a reason to stay loyal and you have to employ consistent marketing to remind them why it’s worth visiting your shop time and time again. Focusing on customer retention pays big dividends, with the global consulting firm Bain & Co., estimating that increasing customer retention rates by just 5 percent will boost profits by 25 to 95 percent. Remember, the best customers are the ones who already know you and trust you.
