New leads are important, and you always want to keep the pipeline full.
Yet, it can cost as much as five times more to attract a new customer than to retain an existing one.
Doesn’t it make more sense to spend time nurturing the leads you already have?
According to research firm Bain & Company, a five percent increase in customer retention can increase profits by as much as 25 percent.
Therefore, nurturing a customer you already have is more profitable in the long run.
Loyal customers refer friends and family, and are less expensive to service. Many will stay loyal even if you don’t always have the best deals. Why?
Because they buy into your value proposition and prefer to do business with a dealership, sales staff and service team they already know and trust.
Of course, you still need to market to new customers. But the biggest opportunity to keep costs down and increase profitability lies in nurturing the relationships you already have in your CRM.
These three tips will help you create a strategy to nurture your existing leads.
Personalize your marketing
Today’s customers expect a personalized experience that speaks to their needs and wants.
Technology has advanced to track a customer’s online behavior and make relevant purchase suggestions. Therefore, customers have become conditioned to that level of personal engagement from companies they do business with.
So, how can you meet these expectations?
Use historical data in your CRM to predict when a customer will be in the market for a new vehicle or service.
Create service offers that target a particular customer segment or promote a seasonal service. For example, offer oil, brake, and tire specials for customers hitting 50,000 miles or run an air conditioning deal in the summer.
Send personalized messages through the customer’s preferred communication channels – and increase reach and frequency with multi-channel marketing.
Identify and reward VIP customers
Eighty-percent of your future profits will come from just 20 percent of your existing customers, according to Small Business Trends.
There are various ways to identify your VIPs.
Track dollars spent over a defined period in both service and sales.
Analyze the best reviews on your website and social media.
Count the number of friends and family referrals.
Once you’ve identified your most supportive customers, implement a reward or recognition program to maintain these relationships. Consider rewards points, loaner cars, service discounts, gas cards, and other perks.
Include the human touch
Digital retailing is gaining in popularity, and it’s safe to say all customers research online before stepping onto your floor.
But this is still a people business. Don’t forget the power of human connection.
Encourage your sales and service teams to pick up the phone and send check-in emails to your customer base.
The better relationship your employees have with your customers, the more likely those customers will return to your dealership.
To prioritize the customers already in your CRM, remember to engage with personalized communications, identify and reward your VIPs, and never forget the power of human touch. These three strategies will help you increase customer retention for greater profitability today and in the future.