According to CarCount Hackers, shops lose around 71% of their new customers due to poor customer experience and retention, This means for every 100 new customers that come into your shop only 29 will come back for a second visit.
The problem with this reality is that acquiring new customers is extremely expensive. It is extremely smart to focus on customer service, customer experience and hyper focus on customer retention. Here are a few strategies that will help you improve your customer experience and retention so that you are getting the best return on investment on new customers.
Improve Your Waiting Room
The first thing you want to review is how your customers see your waiting room. Is it disorganized? Dirty? This could give the new customer a bad first impression, Make sure you have comfortable and nice looking furniture, free wifi, entertainment, free drinks or snacks and really treat them like they are in a fancy hotel and you are serving them. Check out your walls –do you need to throw a fresh coat of paint on the walls and add more professional decor? The first impression is extremely important, because people are very conscious of quality these days. Ensure that your waiting room screams that you are a quality shop and that you give the best service in town.
Customer Service Training
Delivering great and consistent customer satisfaction is your goal with every customer. Let’s be honest, there are difficult customers and it will pay dividends to your shop when you train your team to handle them properly and ultimately turn them into raving fans! I am a big believer in self education and encouraging my employees to constantly be learning. I would check out these 14 Customer Service Training Programs & Courses You Need to Take! You can take some free courses or really spend some money and invest in this crucial skill set.
Start an Auto Membership Plan
A membership plan is one of the smartest strategies you can implement to help retain your new and even existing customers. What is a membership plan? Customers pay your shop a monthly or yearly subscription fee in exchange for oil changes, tire rotations and discounts on other services as long as they are an active paying member.
Okay, here’s a more concrete example. Think like Amazon: they created Amazon Prime Membership and it generates billions of dollars of predictable recurring revenue each year. Their members actually spend twice as much as non-members! I call this the membership effect.
The same is true with your customers. The membership effect will take place and you will create an advanced loyalty program that allows your shop to generate predictable recurring revenue, increase average revenue per customer, smooth out feast and famine months, and increase your shop’s business valuation.
Here is an example of an auto membership plan:
Growing an Auto Membership Plan
Once you have created a membership plan you have to grow it. A membership plan will take time to grow but the time, energy and effort it takes will be well worth the return on investment. After you set up your program, I recommend you start to get the word out. Talk to EVERY single customer about your program. Focus on the benefits the customer will receive peace of mind, exclusive discounts and preventative maintenance. Your service advisors will play a key role in this process.
Next, send a mass text or email out to your current customer base and introduce them to your membership plan. Make sure every new customer that comes into your shop understands that you have the program and ask them to join and start saving now! You could even promote your new program via direct mail ads, Facebook ads and local search ads. The key is to focus on getting initial members signed up and experiment with other marketing and advertising strategies to attract more customers to your shop. Then to get them to sign up to your program.
Membership Case Study
The image below shows a dashboard of a shop’s membership plan. About 12 months in, this particular shop the shop has signed up over 1,000 membership customers. The shop generates just under $40K of automatic recurring revenue whether they work on cars or not. Keep in mind that membership customers will spend around two times more than non-members – the data below only shows the membership revenue. How would this benefit your shop? Cash flow is king and this will be one of the best strategies you can implement in your business.
If you want to learn more about how to set up a membership plan for your shop I recommend checking out a software company that
enables shops to create a membership plan to automate payments, track benefits and help you manage the details of a membership plan.
Jordon Comstock is the Founder and CEO of Volcanic. He has helped thousands of businesses create, scale and automate membership plans while collectively helping businesses generate tens of millions of dollars in recurring revenue.