Returning customers are the lifeblood of your shop! But how can you keep them around?
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Vic Tarasik, Founder and Managing Partner at Shop Owner Coach, shared some tactics for customer retention at your shop in a recent AutoLeap webinar.
During his discussion, Vic covered:
- Why returning customers matter so much
- The revenue opportunity of each customer
- How to use “The Dating Game” for customer interactions
- Strategies to increase the frequency of new and returning customers
- Tips to create sticky points with your customers
- And much more
Let’s walk through each point in detail!
The importance of returning customers
Returning customers matter more than any other success factor for your shop.
Why is this? They are:
- More loyal
- Trust your shop
- Like the way you do business
- Less apt to ask you to “sharpen your pencil”
With this in mind, the mission is simple. “Our goal is to convert first-time customers into life-long customers,” says Tarasik.
Money you lose when customers don’t return
New customer data reveals the revenue opportunity of a lifetime customer.
Tarasik cites the following figures:
- 51% of new customers will only visit your shop once
- The cost of advertising spent to acquire one visit is $300
Say your shop brings in 20 new customers, but 10 don’t return after their first appointment. Remember, you spent that $300 in advertising to acquire each.
For a full year, losing those new customers cost your shop $36,000 in potential business!
Lifetime revenue for each new customer
Each lifetime customer at your shop represents a large potential revenue opportunity.
Vic cites the following data:
- The national average spent on annual car care = $2k
- The lifetime of a customer at your shop can reach = 40 years
- $2k x 40 years = $80k spent in potential revenue over their lifetime at your shop
The opportunity to profit is there! But your shop needs the right plan in place to capitalize.
How to use “the dating game” for retaining customers
“When a new customer comes in, treat it like you would a date.”
Tarasik recommends “the dating game” approach with the customers at your shop. Here is his breakdown of how the first four dates should go:
- 1st date (your customer completes a first visit): Much like a date, this is an introductory period. Your customer will get a feel for how your shop does business. But it’s also a time for you to get a sense of the customer and their needs.
Don’t panic if they want to start small with an oil change or minor maintenance need. “They are checking you out. Do they feel comfortable with you?”
- 2nd date (your customer decides on the relationship): This “dinner and a movie” stage is where a customer will signal they want more out of the relationship. They like your approach and want to see where the arrangement goes.
- 3rd date (your customer commits): A customer visiting your shop for the third time is key. It indicates that they trust you, will listen to your recommendations, and like your overall approach to doing business.
- 4th date (your customer for life): You did it! A fourth trip to the shop will mean, barring any significant drop in quality, they became a lifetime customer.
“It’s so important to remember this. They are yours to lose at this stage,” adds Tarasik.
Strategies to earn customer trust
You now understand the importance of a fourth “date” with your customers! But how do you even get to that point?
Tarasik says your customers will only continue to do business with a shop they:
- Know
- Like
- Trust
Focus on each of these qualities for every interaction with customers. Do you come off as warm and personable? Or will they perceive you as cold and uninviting?
Remember to smile! It’s all about earning their trust early on. “Trust is the foundation of building a relationship with your client. Everything you do signals they can or can’t trust you,” adds Tarasik.
Other factors that go into decision-making, like a customer’s personal circumstances, are out of your control. But your shop can focus on the two items you’ll always have command of:
- When you promised the car repairs
- Whether the estimate was accurate
Deliver on both fronts and you’ll always have success moving customers from one date to the next!
But there are other ways you can go above and beyond to cultivate these lifetime customer relationships. Sticky points are a great way to differentiate your shop.
Creating sticky points for your customers
What is a “sticky point” for your customers?
Think of sticky points as the small details that stand out for customers. Do you connect with them in a way that’s unique from other shops?
Here are examples of these differentiators:
- Greeting the customer on the service drive
- Opening the door for customers and welcoming them inside
- Flashing a warm smile
- Accommodating them with a modern reception area (a clean and orderly space that smells nice with updated amenities and a clean bathroom)
- Listening to your customers first before talking to them
- Providing a tour to show your customers
- What you do
- Your shop’s capabilities
- Your team
“Show them who you are. Let them get to know you,” says Tarasik.
Run through the following checklist to assess your current approach to interactions with existing customers.
- What did your customer remember the last time they were in?
- Were you pleasant and present?
- Did you repair the vehicle the first time?
- Did you do a digital inspection and apply the 300% rule?
- Did you pre-book their next appointment?
- How frictionless was their visit?
“They make up a ton of your sales. They trust you. Don’t take them for granted,” adds Tarasik.
Marketing to your existing customers
Marketing is another piece of the puzzle to retain your existing customer base.
Vic recommends not tying your shop promotions to a discount or seasonal offering. Instead, you can promote the following programs and services:
- $ off deferred services
- Referral programs
- Loyalty programs
- Personalized follow-up
- Social media presence
- Educational events
- Flexible payment options
- Interest-free financing
- Accept all major credit cards
Reducing friction for customers
Your customers don’t like obstacles! Make scheduling repairs and visiting your shop seamless from start to finish.
Here are some features Vic recommends to reduce friction for customers:
- Digital menu boards
- Digital vehicle inspections
- Text to pay
- Online appointment scheduling
- Pre-scheduling deferred work
- SMS communication
AutoLeap’s Marketing module can help your shop create a frictionless customer experience in this manner!
» Looking to transform your shop? Discover how AutoLeap can help.
Bringing it all together
Vic leaves you with four tips:
- Track your new customer habits (When were they in last? Follow up and communicate with existing customers)
- Set a goal to secure each successive visit (Remember, they are your customer for life after the fourth visit!)
- Define and focus on your sticky points
- Use marketing and SMS tools to remain connected
Use these expert insights to build trust, retain customers and grow your shop!
