As an NADA Dealer Academy graduate of 2002 (at the expense of making myself seem dated; I was just a mere child then), I must confess that I do not remember any of our sessions having anything to do with clients, least of all client retention. As a business owner of a company that serves auto dealers, we are scored highly by investors because we are a “recurring revenue” model. Amazingly, the finest examples of “recurring revenue” companies are auto dealers; most just don’t realize it.
What is a recurring revenue model? It’s a company that signs a long term contract with a client and receives “revenue” from the same client (as long as the client is a user of the service). One of my client dealers used to say that he thought they [dealers] were the “bravest” individuals, as every month they started with their revenue slate clean, and had to discover enough revenue from the “new” sales of that month (which were unpredictable) to cover a HUGE overhead. He is right to a certain degree, but with usage of some good tools, smart planning and the right attention to your clients, the task of re-starting the revenue stream each and every month does not have to be so daunting and unpredictable.
I am not talking about paying for expensive advertising or buying leads, but getting to really know who your customers are and dealing with them in a way that would never allow them to leave your bosom.
In other words, pay as much attention to client retention as client acquisition.
In order to truly accomplish this, you must first build a “true” relationship with that customer. Your CRM is not a relationship building tool; it’s a database management tool. Frankly, I am not sure why these tools have acquired such a name, as no CRM builds a relationship with anyone. In reality, they should be a CDM, “Customer Data Management” system, as they are of no more value than that.
In reality, a “relationship” is built when both parties can communicate easily: when they [the parties] have a need and when both “listen” properly to one another. As a rule, auto dealerships, as most businesses, only communicate outward by sending email templates and/or direct mail, or post by posting (on their website, on banners or TV advertising). This kind of one-sided communication does not build a relationship.
There are plenty of times that the customer would like to respond, and unless they are at the dealership, the “return” communication is almost impossible. Even if the customer is willing to speak with the dealership operator, that task is daunting: the new telephony systems do not provide access to a “live” human being until after you have gone through many iterations of choices offered by some computer. The only other way would be email, which is not readily available to customer either, unless they want to email the internet department. So, a (possibly) easily surmountable issue becomes a monster issue as the lines of communication are closed for the customer.
So, he or she will go on the web and pour his or her heart out at the dealership’s expense.
What is the recourse? There are new tools in the market that address this issue and can actually save you money over the present tools you have. However, the focus of this document is not sales, but to direct you to best use of the tools at hand. The dealership of today must have a solid handle on whom their “core constituent client base” is. These are the customers who generate the most revenue at your dealership. They might be multi-car buyers, or might be ones that use your service department regularly, [that is to say] their vehicular needs, whether they bought the cars from you or not.
Once you have identified these customers, then, using whatever tools at hand, you must open a direct dialogue with them. That dialogue does not mean your dealership emails them when you are ready. You must have a bi-directional, solid method of communication, that both of you can use, [of which] your customers approve. This bi-directional communication cannot be that you send your customers a letter or email asking them to “call” your dealership when they wish.
We all know that receiving attention at a dealership, using operators, and trying to get to a management-level employee is a daunting task. But your processes might require either new tools, or specific process changes that stake-holders will adhere to, and will be held responsible for.
Once you are really hearing your customer’s “voice”, you can then build relationships that are lasting and highly lucrative.[box type=”info”] Saphura Long will help dealership leaders build management strategies during his session Generate Revenue from your Current Customer Database on May 7th at the 14th Digital Dealer Conference & Exposition. [/box]