View Article

By Adam Shiflett
Marketing Director, ADP Lightspeed

A new customer just walked in your door (cue the celebration). They perused your inventory, liked one in particular, had good credit and bought it. Miracles of miracles.

Sounds like a solid customer, one you want to keep. They have money, they are excited and they know your staff. That customer has a lifetime of expenditures coming. What are you going to do to keep them buying from your parts, service and sales departments?

That is exactly what we asked powersports, RV and marine dealers in a recent survey. The question: "Does your sales staff encourage customers to use your parts and service?" Overwhelmingly the answer was yes (93.6 percent). Then the dealers were asked how they encourage parts and service. There was a flurry of creative ideas that happened at the time of sale: discounts, priority service, drawings.

Later in the survey, less than 40 percent said they felt 60 percent or more of their revenue came from current customers. The idea behind customer retention is creating lifetime customers in parts and service, while bringing in more new customers. This strategy allows your dealership to rely less on attracting new customers and more on retaining current customers, then using them as a referral base.

So, how do you get there?

Recently Lightspeed did a study of dealerships that used Lightspeed CEM (customer experience management) to see how well these dealers bring customers back after a unit sale. The study compared dealers using CEM versus not using CEM to see how many of their customers purchased parts or service the year after their unit purchase.

First, to the dealers without CEM: Out of 100 customers that bought units in one year, 20 of those customers returned the next year in service and 25 came in for parts. Dealers that used Lightspeed CEM saw 22 of their customers come back for service and 30 made purchases in parts.

Dealers that used Lightspeed CEM saw a 15 percent increase in service, a 20 percent increase in parts and an 18 percent increase combined. Those additional visits added $10,000 in revenue in a year. Putting more effort in customer retention brought increased revenue to other departments.

Continual Contact Improves Retention

One take-away we got from the study is that dealers that implement a long-term plan to get customers back in parts and service, get customers back. They looked past programs that just applied to the time of sale and looked for ways to remind their customers to come back for their parts and service needs, even once they left the building.

The dealers that have the 18 percent increase used newsletter, emails, surveys and other consistent communication tools to get past customers back. They used these tools to establish communication with their customers and create an ongoing relationship.

The challenge for your dealership is to find effective ways to communicate with your customers. At one time it might have been feasible to call many of your customers or even send them a letter. As you grow your customer base these tools become increasingly difficult to use. Luckily the modern world has given us solutions.

Email, Facebook, Twitter, YouTube and other modern communication technologies give you the ability to communicate to your customers in mass, very quickly. As your database grows so do these tools. So the questions now are how and what do you communicate.

Targeting Your Message

It amazing how a single message can be interpreted infinite ways. A classic story is the Chevy Nova. Nova in English means a star that has a sudden burst of light, sounds cool for a car. But in Spanish it means "does not go," not so great for a car. The best way to stop this from happening when you communicate is segmenting.

Segmenting your communication allows you to create a specific group of customers and communicate with them in a way that is important to them. If a customer just bought a trailer, chances are they're not going to be interested in your RV transmission specials. The best way to communicate with your customers is talking about what is interesting to them.

You need to find ways to segment your customer lists so that you can create specific interest groups. It can be done by the type of unit they own, how often they buy service or another topic. The goal is to show them that you understand their specific needs and have the expertise to fill them.

So Much to Say

Once you have your segments it becomes easier to know what to say, to who and when. Hunters want to hear about heaters in the fall. Class A RVers want to hear about the best ways to store the RV in the winter. Thinking about the different groups will help you understand what to say that will get your customers back.

Stay away from straight discounting messages. Yes it's okay to talk about a promotion or a sale, but none of your customers bought a unit purely because it was on sale. They bought it because the love the outdoors, travel and fun. That is where you should focus your messages. The excitement of what you do.

When you look forward into 2012 to set your goals to increase your revenue, think about new customers, but don't forget about your current inventory.

Make your current customers your future customers.

Adam Shiflett is the marketing director for ADP Lightspeed. He can be reached by calling 801.519.7664 or by e-mail at adam.shiflett@adp.com.