Tag Archive | "customer retention"

Maritz: Car Shopping a Lonely Journey, Dealers Missing Opportunities

St. Louis — According to a new study by Maritz Research, the automotive industry is missing an opportunity to build long-term customer relationships, with one in five customers never hearing from their dealer immediately after their purchase. The study also found that 75 percent of in-market customers were never contacted by dealers who already know them.

“It’s clear that dealers who focus on a single sale miss the bigger picture of the customer journey,” said Chris Travell, vice president of strategic consulting for the Automotive Research Group, Maritz Research. “People will buy numerous vehicles in their lifetime, so staying in touch with them throughout the ownership of their current vehicle — not just after making the sale — will put a dealer in the right place at the right time to assist customers with their next purchase.”

The Automotive Customer Journey Study polled more than 4,200 car buyers on what they think, feel, want and need when it comes to purchasing a new vehicle, as well as what they need to hear as owners throughout their journey.

The following are the study’s key findings:

Dealers aren’t thinking beyond the sale: After dealerships closed the deal on a new vehicle, one in five people said they were not contacted right after the purchase. “We never heard from the dealer after the sale; no service offers, no purchase follow-ups, nothing,” said one respondent. “Everyone always calls right after you buy a new vehicle when there should not be any problems. No one ever calls 12 to 36 months later asking if everything is alright.”

More customers are in the market than you’d think: One year after purchasing a new vehicle, 40 percent of customers are already thinking about their next purchase, even if it is a few years away. “A purchase anniversary follow-up … would have been a big plus. Maybe we are ready for a new [car] and perhaps a call would help us decide,” said one consumer.

Dealers should communicate more, as long as it’s relevant: One in five vehicle owners received too little communication. The study also found the longer someone went without contact, the more dissatisfied they became and the less likely they were to buy again from the same dealership. “Too little contact may mean the dealer doesn’t care about [my] satisfaction … more personalized customer service would help promote loyalty for the product and dealership.”

Dealers need to use the information they have: Seventy-five percent of customers were never contacted by their dealer or manufacturer when they were actively looking or thinking of buying a new vehicle, despite the dealer knowing when the lease was up or the finance term was over. “I would like someone to contact me closer to the end of my lease to discuss options for a new lease and prices,” one respondent said.

Communication changes over time: Customers expect to hear from the brand and dealership throughout the ownership of their vehicle. The desired communication changes over time, whether they’ve owned the vehicle six months or six years. “I wanted them to contact me, just to see if I had any complaints, problems or input,” a respondent said.

More and more, prospective buyers go online to research potential purchases and read reviews of others’ experiences. Some avoid dealerships altogether. Because of this, the customer is more prepared than ever and expects the relationship with a dealer to provide them value.

The good news is consumers want a stronger relationship with their selling dealer, with 62 percent of those not contacted after their vehicle purchase indicating that they would have liked to receive some form of communication.

“This increase in communication doesn’t mean more direct mail,” Travell noted. “Customers want information that’s helpful to them depending on where they are in their ownership lifecycle. It’s about the right type of communication at the appropriate time.”

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Fidelis Uses PPM to Drive Loyalty for Dealers and Agents

You have no doubt heard the phrase, “The customer is always right.” In the F&I world, you try to help the customer understand what they need to secure their new- or used-car purchase. When the customer knows the conversation is about them and what they want, they should be more willing to buy what you’re selling.

With 18 years of experience in the automotive industry, Ryan Williams, executive vice president of sales for Fidelis Systems, says he knows what it takes to make customers happy: Dealers and agents working together to develop a superior experience throughout the ownership cycle.

To that end, Williams and the Fidelis team have come up with the Fidelis Customer Loyalty Maintenance Program (CLMP), a strategy that supplies customer retention and loyalty for car dealers through a prepaid maintenance (PPM) program.

Bringing Them Back

First and foremost, every package is customized specifically for each dealer. Any products the dealer wants to offer can be put combined to create a unique program. The title of this program also can be customized for the dealership, but a majority of dealers call it the “Advantage Program.”

When a customer purchases a car, they are automatically signed up for the complimentary one-year Advantage Program and receive a dealer-branded membership card in the mail shortly after they purchase their vehicle.

Fidelis has a turnkey, multichannel marketing platform to stay in touch with customers. Each car buyer is contacted up to eight times in the first year via automatic emails and direct mail. These messages serve as service reminders and notification that their contract is about to expire — with an opportunity to renew.

Williams says that Fidelis’ track record proves that, the more customers come back to the dealership, the better the retention rate. “Leading sources state that there is a greater than 70 percent likelihood that a customer will buy their next car at the place where they service their current car.”

Fidelis’ software was designed to integrate with each dealer’s DMS and extract information for reports that track service income. “We know that 35 percent of customers will leave some of that contract unused and we give 100 percent of those forfeiture, or “spoilage,” dollars to the dealer,” Williams explains. In other words, the dealer can maximize income whether or not the customer comes back.

Benefits for Agents

Williams says the system was designed to serve as a retention tool for agencies as well., “We’ve been doing this for five and a half years and 94 percent of our dealerships are still with the same agency,” he says.

He adds that positive feedback has told him that CLMP opens agents up to more business because it reaches beyond the F&I office. Every department needs to be on board, he adds, because the program affects each staffer.

Additional tools for agents include online and in-person training. After Williams’ team does an initial, onsite training session, he says, “The best training is going into an account the agents have and doing a presentation with them.”

This program also has a wide range of eligibility. Any new- or used-car operation that has a service department is eligible for the program. According to Williams, dealers who use the program are running a 65 percent retention rate, a huge improvement over the 11 to 18 percent average reported by leading market researchers.

“For dealers, the most important and most appealing part of doing something on your own, is that you can build it yourself, price it yourself, control all the money and brand the dealership,” Williams says. “With this program, you get all four things in a turnkey system that delivers amazing results.”

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Three Tips for Retaining Clients

While we all know the importance of prospecting, too many salespeople focus on prospecting for new business, to the detriment of current clients and their own bottom line, Entrepreneur magazine reported.

And the amount of effort one puts into landing a new client is said to be five-to-10 times the effort required to retain that client. In other words, prospecting is much harder work than generating repeat business.

So what are some of the steps you can take that will ensure your customer stays with you and expands their business with your business? Here are three key activities that will build trust and future business opportunities.

1. Tie your products or services to the customer’s bottom line. In today’s world the bottom line is a high priority. It was a high priority yesterday too, but more and more companies want to know what you and your product or service will do to impact their sales, overall business growth and their long-term success. Keeping this in mind, it’s important for you to demonstrate how your product or service will increase their revenue and gross profits. Knowing how your customer makes money and measures their success must become one of your key goals.

First, keep it simple. When I sit down with business owners, I ask straightforward questions that will keep me close to the customers’ goals such as:

  • How does your business work and how do you make money?
  • What are your immediate and long-term goals?
  • Is there anything we’re not doing that we could be doing to serve you better?
  • What are the most important actions we can focus on to improve your business, sales and bottom line?
  • What has changed in your business since we first started doing business together?

I know some of you would say you should know that already, and I say, no kidding! But asking these questions will get you information that no website or research can match, and will enable you to maintain their business for the long haul.

2. Build relationships with multiple players in the organization. Doing this will ensure greater support for your services. Some sales people miss the opportunity to introduce themselves to others in the businesses they’re visiting. Maybe they think the individual is too low on the totem pole to influence any decisions.

As far as I’m concerned, everyone within an organization has significance in future decisions. Who knows when that one person might get a promotion to the position where you need their help?

Or, how many times have you met someone in a company and they get hired at another company that ends up calling you. Why would they choose to call you? Because you became the mayor of your account. You treat each contact as the most important person when they’re in front of you.

Last month I made over 200 canvassing calls with a variety of salespeople and you wouldn’t believe the insider knowledge we found from bellhops to security guards. By listening to everyone we encountered, we gleaned information that made a huge difference when we were in front of the VP and knew things about the organization that even she didn’t know. Take the time to build as many relationships as you can. It will make a difference in the long run.

3. Let go of accounts that waste your time and money. Cut your losses with accounts that never seem to appreciate the value of your services; they take away from building the accounts that will pay off in the long run. They constantly hammer you on price, ask for everything for nothing and end up sucking the life out of you. Go after more qualified accounts so you can afford to pick and choose.

Proactive selling to your existing clients not only grows your sales, it builds your confidence and deepens relationships, too. Hmm, I can work less while still growing my sales? Now that’s a win-win.

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3 Ways to Convert Online Prospects Into Clients

You’ve got a killer website that potential clients are visiting. But how do you turn those visitors into paying customers?

Whether you offer a product or service, online customers can be fickle. According to Forrester Research of Cambridge, Mass., 88 percent of online shoppers that begin a transaction don’t complete it, a term known as “shopping cart abandonment.”

And consider this: researchers say consumers searching for goods or services online will visit an average of four websites within a 30-minute period. This means that if visitors to your site request more information, you’ve got to follow up fast to beat your competition to the punch.

The Wall Street Journal offers the three best ways to convert an online prospect into a client:

1. Reach out within seconds. Once prospects’ information is in your hands—whether they’ve submitted a form or sent an e-mail asking for more information—the clock is ticking. These days, customers anticipate a rapid response, and the longer you wait, the more likely you are to lose their interest, says Glenn Houck, co-founder of LeadQual LLC, a Stratford, Conn., firm that helps businesses turn leads into sales. He recommends following up within seconds, not just minutes.

If a business doesn’t have internal staff to monitor e-mails or response forms, it can hire providers of so-called “lead-management” services. For instance, for a fee of about $5 per lead, LeadQual will call prospects back within 50 seconds, as well as to follow up multiple times.

Once prospects express more interest, they are put directly in touch with the business. While rapid response might not be the only factor that gets you the deal, the immediate attention can make a positive impression.

2. Follow up, again and again. There’s no need to hang up your hat just because the prospect hasn’t returned your call on the first try. Recent data released by Leads360, a provider of lead-management software in Los Angeles, indicates that repeated follow-up can lead to success. Leads360 found that making a second phone call increased the chance of making a sale by 87 percent.

Further, the magical number of calls it took to change as many prospects as possible into clients was six. Jeff Solomon, founder and senior vice president of Leads360, says the six-call follow-up should take place within the first month of initially hearing from the prospect.

If you want to do something other than phone calls, Solomon suggests reaching out with what he calls a “nurture e-mail” that contains additional information, such as guides, online calculators and other tools that can help prospects better understand your interest in landing their business.

3. Get to know your prospects. Ever wonder who is coming to your site, what they are clicking on, and how they utilize it? If visitors don’t fill out a form or suggestion card, it’s possible to use analytics to determine a variety of useful information, including how the prospect found your site.

Programs that track web traffic range from Google Inc.’s free Google Analytics to ones that charge fees such as Adobe Systems Inc.’s Omniture.

“Knowing how a customer acts within the site is vital,” says Shmuli Goldberg, director of marketing and communications for online-analytics provider ClickTale.

For instance, you can use analytics to find out where users click most on your site, or what grabs their attention and holds it. Another key bit of info you can glean is how prospects react to your online forms, down to what they won’t fill out (incidentally, it’s often their phone number).

Once you know where you are losing visitors, you can make changes to your site that eliminate superfluous information and allow for a more user-friendly browsing experience.

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