Customer Retention: Keep ‘em Smiling
In today’s highly competitive marketplace, consumers have an abundance of choice. They can buy their tires from a tire dealer, a car dealer, an Internet retailer, Canadian Tire, Costco, etc. Every retailer wants their business. Every re-seller wants to capture that “new customer.”
Well, what about your existing customers? Think about this – they have already been to your store. They have purchased from you and you have all their data in your system. You know this consumer and they already know you. The old adage is true, it is cheaper to keep an existing customer than to acquire a new one.
Consider the following 12 interesting points that have been gathered from various research studies:
1. Price is not the main reason for customer churn; it is due to the overall poor quality of customer service.
2. A customer is four times more likely to defect to a competitor if the problem is service, rather than price or product.
3. For every customer complaint there are 26 other unhappy customers who have remained silent.
4. 96% of unhappy customers don’t complain; however 91% of these will simply leave and never come back.
5. An unhappy customer will tell between 9-15 people about their bad experience.
6. A happy customer, who got their issue resolved, will tell about 4-6 people about their good experience.
7. It takes 12 positive experiences to make up for one unresolved negative experience.
8. The probability of selling to an existing customer is as high as 70%. The probability of selling to a new prospect is 20% or less.
9. A 2% increase in customer retention has the same effect as decreasing costs by 10%.
10. It costs 6–7 times more to acquire a new customer than to retain an existing one.
11. 70% of buying experiences are based on how the customer feels they are being treated.
12. 55% of customers would pay extra to guarantee a better service.
Although it’s true that new stores have to chase new customers, many of you are operating stores that have been in business for years. You have an existing customer base and this is a potential gold mine for future business.
Focus your sales and marketing efforts on your existing customer base. Thank them for their business. Offer them “Loyalty Deals” tied to service reminders. Communicate with them. Listen carefully to what makes them happy and what makes them unhappy. Fine tune your customer service and work hard to create happy customers. Also, work quickly to resolve issues that have made a customer unhappy.
Make your store welcoming to your existing customers. A bright, clean and tidy showroom and service counter is a great first step. Up-to-date and clean tire and wheel displays are important (I have been to many stores where display tires and wheels are dusty). Have their full info in the computer – correct vehicle data, tire sizes, service history, etc., so that you are ready to talk with them.
Retain your customers. Increase your profits. Attain success.