With dealership margins shrinking as quickly as sales are slowing, you’ll have to get creative if you want to stay profitable this year. Fortunately, the best way to grow revenue during a sales slump doesn’t require nearly as much effort or expense as new customer acquisition. Plus, it uses tools that you’ve already got at your disposal.
The best way to grow revenue in 2017 is to focus on the customers you already have. It’s not only 50 percent easier to sell to an existing customer than it is to acquire a new one — it’s also six to seven times less expensive. The key is to connect with customers in meaningful ways — ways that offer them value while keeping you top of mind.
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Here are some solid starting points:
Stay Top of Mind After the Sale
t’s tempting to think of the signed contract as the finish line. But if you’ve provided an exceptional sales experience, it should really be just the beginning. To establish yourself as a trusted resource — one they’ll come back to time and again — you have to demonstrate the support you can offer after the sale. You have to think beyond the close.
Depending on which channels work best for your market, you should reach out to recent customers via phone, email or direct mail on a regular basis. Show them you care about their satisfaction by asking genuinely thoughtful questions, such as, “Are you still enjoying your vehicle?” “Do you have any questions about your maintenance package?” “Did you know about this recall?” When they have their own questions, they’ll think to ask you first. It’s only a matter of time before they ask, “Can you help me find a new car?”
Get them in the Service Lane
here’s no retention tool more powerful than your service department. Studies show that if you introduce a customer to your service drive after signing, they’re 2.3 times more likely to return for maintenance and repairs.
You can even set them up with their first service appointment as part of your sales process. This helps guarantee return visits for maintenance and repairs — and, down the line, potential new sales. After all, Polk reports that 75 percent of repeat customers are also frequent service visitors.
And even though customers are more likely to show up for prescheduled appointments, you can further improve show rates by sending confirmation emails and appointment reminders. These additional customer touchpoints further reinforce your brand’s value and help keep you top of mind.
See Who’s Ready for Resale
Staying connected with your customers and getting them to return for service goes a long way toward encouraging repeat purchases. But each customer is different, which makes it difficult to predict when they’ll be ready for resale. Fortunately, there are a number of signals that help indicate which customers are in the market for a new vehicle. To identify those signals, you’ll need a robust CRM with an integrated mining tool.
Data mining gives you the insight you need to make timely, relevant offers. Start by looking at equity standing. If your customer has positive equity, you’re in a good position to offer them an attractive deal on a new vehicle. The same thing is true of customers who have improved their credit score. If they’re eligible for a lower APR, you could get them into a better car for the same amount they’re paying now.
Or, if the data shows that your customer isn’t a good candidate for a sale, you can look for other opportunities to bring them back through your doors. For example, you might segment your customers based on their last service visit, in order to develop tailored, relevant service offers and maintenance reminders that will show them you want to make sure their car is running at its best. They’ll remember that.
The bottom line is this: Yes, new customers are great, but they’re not your only path to profitability. If you can connect with past customers in new ways, you’ll have plenty of business to keep you busy all year long. While other dealerships waste money marketing to customers who aren’t buying, you’ll be generating sales from customers you’ve already got. And when they tell their friends and family about the great service you provide, you’ll soon have new customers lining up to see for themselves.