There are many models to support this and a quick scout on the internet seems to suggest that it costs five times as much to attract a new customer, as it does to keep an existing one. Most manufacturers seem to agree with this and many have measures to increase customer loyalty.

  • The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%.
  • Existing customers are 50% more likely to try new products and spend 31% more, when compared to new customers.
  • Increasing customer retention rates by 5% increases profits by 25% to 95%.
  • So where do our customers go?

    Research indicates that loyalty to a car brand is based largely on our experience with that brand, not just with the car itself.

    Over many years manufacturers have tried to win customers with aftercare programmes such as free oil checks, free wash and vacs or breakdown cover, but these are fairly standard offers these days. They’re benefits that people have come to expect. We have to do more to earn our customers’ loyalty.

    These days, we live in a society that promotes the idea of shopping around, price comparison sites, and researching before we buy. We share news of satisfaction surveys and consumer advice in traditional and social media. Most people that I talk to seem to mistrust anyone who offers them a quote for getting work completed to their car; their instinct is to say they will shop around or think about it. When I explored why this was, people said weren’t always sure but most were driven by getting the product or service for the lowest price possible.

    So let’s think about when a customer has been in for a service. Whilst the car was in it was also eligible for a health check. This is a good opportunity to reflect that the reason we complete a vehicle health check is to ensure that the car leaves the dealership safe, legal and roadworthy as part of the general product regulations.

    Let’s suppose that during this check it was found that the brake discs were still roadworthy but were close to needing replacement. This is explained to the customer, the service advisor also offers to make a future appointment to get them checked, the customer declines … and that’s the last time we discuss brake discs with the customer.

    From my experience this is where there seems to be a breakdown in the relationship with the customer. Service advisors tell me that they rarely follow up on work that has been recommended due to pressures of dealing with the customers who are being served on that day.

    So in reality, what happens? At some point the customer may remember the brake discs (perhaps it is pointed out during an MOT), shop around for a price, then defect to a competitor.

    And it’s not just following health checks that we have this scenario. During training sessions, we have discussed what happens when a customer calls up for a quote. Is it noted down on a quote database or CRM system as I would hope?

    It would seem that this is a rare practice. In fact, an even rarer practice is to follow up with the customer if they haven’t been converted.

    So where have your customers gone? It’s likely that these valuable leads go into a black hole, the customer isn’t made to feel valued and the potential relationship and sale slips through the net.

    It may be worth looking at your own service department – is the same happening here? What are the reasons? I would also suggest that you get the whole team’s input. Often those on the frontline will help you discover the obstacles that are preventing the relationship with the customer continuing and sales converting.

    So what can we do? Here are some tips:
    1. Ensure that service advisors know the value and effect potential

    2. Provide service advisors with the time to follow up with customers

    3. Create and promote a process for capturing potential work

    4. Train service advisors with sales skills

    5. Identify why customers are choosing to go somewhere else

    6. Make it easy for the customer to buy from you; consider ways to interact with you, such as live chat, online bookings, social media and email

    7. Build value into every customer interaction, providing efficiency

    In essence, we are not always placing enough importance or putting enough time into the customers who have already indicated that they trust and like us through the existence of a current relationships or the tentative steps of a new one. But this is something to be identified and grown.

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