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Losing Work In The Service Drive Costs You Double In Future Car SalesInvesting in a memorable service department experience helps create a profitable, lifetime customer.#1According to NADA data advertising expenditures alone were $606 per vehicle.-------------------------------------------------------------------------------------#2NADA data shows that OEM car dealerships generate only 21% of a $215 billion consumer market. This means that 79% of the service work is going somewhere else.A key trigger to service defections is purchases of replacement tires, and auto dealerships only enjoyed 8.0 percent of that U.S. market last year, according to?Modern Tire Dealer.?A large percentage of your customers leave to buy tires, and most of them never come back.-----------------------------------------------------------------------------------------#3Apart from service revenue’s importance to your bottom line, these customers also represent your best prospects for future new vehicle purchases.Jim Phillips, ?with NADA, shared one major manufacturer’s survey at a presentation at this year’s NADA convention that correlates the frequency of service visits with repeat purchases:Every two service customers you lose cost you a car sale! At an average customer acquisition cost of $606, Plus, each customer you lose also costs you $1,400 in lost service revenue!-------------------------------------------------------------------------------------------------------------------------------------#4A recent Survey from revealed that 57 percent of shoppers sought out a dealership’s service department reviews before purchasing a car.-------------------------------------------------------------------------------------------------------------------------------------#5Bottom line: it’s time to invest in your service department. With the focus on new car sales, dealerships are not spending the time and money to make the service department a destination with compelling point-of-sale displays, exciting product selections and up-to-date signage …Is it any wonder that a significant number of new customers don’t even turn up for their first service appointment?This is only the tip of a huge iceberg, representing either a potential disaster or a huge opportunity. Happy customers write good reviews and build reputation. Lost customers don’t.----------------------------------------------------------------------------------------#6Rethinking and reinventing your service experience is a daunting task. It can’t and won’t happen overnight. Nonetheless, it is worth doing. So, take the first step.#7Companies spend a lot of time and money to attract new customers, but less effort goes into figuring out why they lose customers.?However, the cost to business of losing customers, as well as the impact on the overall company, is dangerously high, which is why it’s more profitable to expend your efforts on retaining existing clients.------------------------------------------------------------------------------------------------------------------------------------------#8The stats don’t lieHere are some sobering stats:68% of customer defection takes place because customers feel poorly treated95% of people who have a bad experience do not complain13% tell up to 20 other people, while a satisfied customer tells only five other peopleIt can cost five times more to buy new customers than retain existing ones-----------------------------------------------------------------------------------------------------------------------------------------#9A ripple effectLet’s look at some of the most costly implications of losing customers:a lost customer is unlikely to want to communicate with you about the reasons for their departure.A lost customer means lost sales and revenue.Remember the cost of replacing this revenue is much higher than the cost of retaining the business. Most companies pay sales people a higher commission for new business because it’s difficult to secure, which adds to the cost implications.A lost customer has a negative impact on the confidence of the entire organization.A lost customer demoralises sales and marketing staff.A lost customer is an opportunity for the competition.A lost customer means a distraction from other important issues.A lost customer can be the beginning of a bad reputation.You’ll become known for losing customers, which could hinder your ability to employ the right people. It can also degrade your image and reputation in the marketplace. There may also be a serious retail backlash as a result.A lost customer can trigger spending un-budgeted funds on marketing, research and new customer acquisition.In today’s economy, shifting focus to customer retention is a key means to give your business a real competitive edge. ................
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