Higher Customer Retention Means Higher Profits!
We’ve all heard it a hundred times: “Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.” And yet, we still can’t seem to find a few dollars each month to spend on customer relationship marketing.
Customer Retention Figures
Let’s set the stage for the cost of customer acquisition versus customer retention.
- The cost of customer acquisition versus customer retention could reach as high as 700 percent*
- Over a 5-year period, customer natural attrition rates could reach as high as 50 percent
- Businesses which boosted customer retention rates by as little as 5 percent saw increases in their profits ranging from 5 percent to a whopping 95 percent
Benefits of Marketing to Current Customers
Now I think we can all agree there’s some opportunity here to refocus more on our existing customers, rather than chasing down new ones. By simply automating the process of service lane marketing, content marketing, email marketing and social media marketing, you’ll have huge success:
- Staying in touch with your current customer base
- Reminding your customers of upcoming events and seasonal tips
- Maintaining a professional appearance all the way to the inbox
- Taking advantage of opportunities to reach out to clients you have not talked to in years; you have new makes and new models to offer them
- Get a few more referrals sent your way
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Making Equity Mining Seamless
This is why service lane marketing is vital. Think about your regular service customers. They are more profitable, more loyal and of greater lifetime value to the dealership. Service lane marketing attracts the richest mix of loyal customers. Many dealers are wasting marketing dollars on disloyal customers who will never stick around long enough to pay back their acquisition investment.
Many dealers have been turned off to equity mining because they may have had inadequate training, didn’t use it or had improper processes in place at the dealership. Others have invested in poor software where the numbers didn’t add up and lost confidence with their staff. Either way, having an easy-to-use software solution installed is essential. Partner up with a vendor that is committed to your success. Being able to serve up customer information that is accessible at a moment’s notice is crucial. Your staff needs to have a seamless process that encourages them to use the software. Once they have bought in, it becomes part of their daily routine.
*Source: Frederick Reichheld of Bain & Company.