Do you know how many vehicles you're selling from referrals?

Kristen Tepper

We all already know referral programs work and they work even better with an incentive offer.

What i'm wondering though is who truly knows/tracks how many vehicles they sell from referrals per month, quarter, etc? 
And if anyone spends time trying to promote/optimize their referral program/offer.
If so, how?

IMO, it seems that we're all so busy dealing with the newest technology and "genius" life changing PRODUCTS/IDEAS that a lot of dealers have forgotten just how effective and easy a referral program can be to implement and also how much customer engagement/sales it creates.


Chris K Leslie

I dont know if this is a thing everywhere but in the state of Nevada but there is some interesting laws around how referrals can be paid out. 

For example, if we want  to pay a referral / bird dog it can't be contingent on the other person buying something. At that point it falls into a split commission situation which the person recieving the bird dog would also need to be a licensed sales person. If we pay the fee before a transaction then we're cool. 

Needless to say we aren't really doing that.. 

Steven Cobb

We do have a referral program that pays $100 birddog. I haven't pushed it as much as I should. I average 25-30% repeat business every month after 5 years of being here at this dealership and I have to think that I could pick up another 1-3 deals a month if I really apply myself.

Kristen Tepper

@Chris, very interesting! There are definitely some convoluted rules around referrals in some states. We watched tesla have to work out those kinks with their referral program, state by state. It was very interesting/creative what they came up and the results they fostered.

@Steven that is an epic about of repeat business. Congrats! I'd love to know more about how you/your store market/optimize your referral program? 

mark rask

we dont track referals but we get a lot....i think that we will start tracking that number

Kristen Tepper

@mark rask, you definitely should!

Referrals are what we call - powerhouse leads, because of their ability to truly reduce the cost of customer acquisition with higher closing rates but nobody's optimizing on them! Only 39% of marketers use referral marketing regularly.... but 43% of those who do use it acquire MORE than 35% of their new customers with it.*

  1. Easy to close - referred customers are 4x more likely to purchase then fresh-ups.**
  2. LTV - referrals have a 16% higher lifetime value. Major service points.***
  3. Average Gross -  Referrals = $1,298.... Fresh Ups = $817****

***Wharton School of Business
****NADA 2015

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