The percentage of existing customers that purchased services during a period is the measurement of retained customers. This performance indicator is a measurement of how well the shop is doing at keeping customers. Many factors can contribute to customer retention but most factors are relationship oriented and a lot have to do with communication. Developing marketing programs and monitoring their effectiveness will ensure the most effective use of marketing resources. Finding out the reasons for business loss will identify areas that need improvement.
- Employ Effective Marketing Programs – Marketing for customer retention has a different objective than marketing for new business. Marketing for customer retention should be focused on building and strengthening relationships. Inbound marketing refers to providing value to a target audience for the purpose of relationship building.
- Utilize Reminders for Appointments and Recommendations – Customers should be notified when services are due on their vehicle or when they have a scheduled appointment either by email or mail. To strengthen the reminder for appointments a phone call can be used in addition to the mailer.
- Place Lube Stickers in Customer Windshield – Lube stickers are the most cost effective type of advertising in the auto repair business. The shop name and information is displayed in front of the customer every time they drive their car and for little expense.
- Evaluate Marketing Programs for Performance – When a customer brings their car for service it’s important to record what prompted them to do so. Was it the email they received, the lube sticker in the windshield, or another reason? The use of the value ‘Returning Customer’ should be avoided as it will never tell you what brought them in and the ability to evaluate marketing programs will not be effective. Knowing what brought existing customers in for service will allow evaluation of marketing programs in terms of cost vs profit for a percentage of return on investment.
- Follow Up – If a customer has not returned within a period of time they may have been lost. This period of time can vary by type of shop and customer base but the idea is to check with the customer if they haven’t been in. A good average time period for a repair shop would be about six months. If customers are contacted by phone it may be possible to schedule an appointment with them. If not it may be possible to find out the reason for business loss. If these reasons are recorded it will be possible to analyze them to identify weaknesses and take corrective action.