Converting Buyers To Repeat Customers

by

Customers For Life: How To Turn that One-Time Buyer
Into a Lifetime Customer

How much would you pay to acquire a lifetime customer? One who would come  back to your dealership time after time to buy things, year after year? How about $15 and a few hours of your time? I thought so.

All you have to do is read a small paperback book, or, better yet, pick up a bunch of copies for your key employees. The book is the bestselling classic, “Customers For Life“, by Carl Sewell and Paul B.Brown. It also includes  a brief but informative section by management consultant Tom Peters. The book is published by Doubleday, initially in 1990 and reprinted in 2002. But it’s still valuable today, two decades later. It might be the best investment of a hundred bucks or so in staff training that you ever made. I don’t work for Amazon, but here’s where you can read other reviews and order the book on-line, if you wish.

The easy-to-read paperback contains 41 chapters in 210 pages. But you don’t have to read the entire book, front to back. Pick out chapters that are important to you, and start there. “Customers” is written by Carl Sewell, a Dallas car dealer, who is one of the most successful sellers of luxury cars in the country. His associate, Paul Brown, is a former writer and editor at Business Week, Forbes, Financial World, and Inc., and a specialist in customer service. These guys know what they are talking about and they know how to say it in plain, simple language that’s easy to grasp.

As I said, this is an easy book to read, and Sewell’s suggestions seem pretty obvious and easy to apply when they are pointed out. Right up front, he gives you 10 tips for better customer service. Here they are, paraphrased:

The Ten Commandments
of Customer Service

  1. Ask customers what they want, and give it to them.
  2. Develop systems to provide service. Systems guarantee you’ll do the job right the first time, every time.
  3. Under promise and over deliver. Customers expect you to keep your word; make sure you do that and more.
  4. YES. That’s always the answer to every customer question.
  5. Empower your employees. Every employee who deals with customers should have the authority to handle complaints.
  6. Encourage customers—and make it easy for them— to tell you what you are doing wrong.
  7. Measure everything. Winning ball clubs do it, and you should, too.
  8. Pay on performance. Salaries encourage minimum performance.
  9. Show people respect. Be polite. It works.
  10. Don’t reinvent the wheel. Copy the best performers— within powersports and outside of it— and then improve on these systems.

Systems. Systems. Systems.

Sewell makes an important point in his book, one that Bill Shenk, the Dealernews Dealer Lab guy makes frequently, and that’s to build solid systems if you want consistent performance. Systems work better than smiles, says Sewell. “Systematic approaches are 80% of customer service,” he writes. “They’re what’s really important, not the smiles and the thank yous. The key is to devise systems that allow you to give the customer what he wants every time.” And do it in the most efficient, profitable manner possible, Shenk might add. Sewell offers these tips on systems:

  1. Identify things can go wrong in the system you’re designing, whether it’s asking for the order, the credit ap or delivering the bike. Determine these possibilities, then figure out ways to eliminate them.
  2. Automate as much as possible using the latest hardware, software and mobile tools.
  3. Consider your OEMs. “Manufacturers, not service companies, have the best systems,” writes Sewell. “They should be your models.”

Frequent Buyers.

Why to you think that airlines, hotels, car rental companies and credit cards have reward programs for frequent customers? Because they work. Period. Do you have one in your dealership? Here’s Sewell’s take on frequent buyer programs: “(They) prove to customers how important you think they are. By having one, you go beyond saying, Thank you. You actually reward people for doing business with you.” Makes sense, doesn’t it?

Once you’ve identified your best customers, stay in touch with them. But, by all means, show them between purchases that they are not forgotten.

The $517,000 Customer.

Here’s one more great point from Sewell: Don’t underestimate the potential of your customers. They might, if treated properly, spend more with you over a lifetime than you ever dreamed. I can relate to this. In addition to working with Dealernews, I provide sales and marketing assistance to a national company. Recently, I spoke with what appeared to be a small prospect, a consultant who asked about a relatively small client of hers. Turns out, however, that she has FOUR other accounts, each bigger than the one we were discussing, and each one can use my client’s services. The total one-time sales from the five prospects are bigger than I ever dreamed, and they can use my client’s services every year. Surprise.

“Every time you get a chance to sell a customer one item,” writes Sewell, “be it a pack of gum or a car, you need to think about how much he represents in future business.”

As Sewell says, “(We want to give the customer what she wants), not because we want to sell her one automobile, but so that we have a chance to sell her 10 or 20. That’s the number of cars she’ll buy in a lifetime, and it adds up to a lot of money. If cars are $35,000 apiece (obviously, much more today), 12 cost  $420,000. Then you have the parts and service work. It adds up to a substantial number, in our case $517,000.”

Remember, don’t look at customers as people who make one purchase and then disappear for ever, says Sewell. Think about all the money that customer could spend with you in a lifetime and give them the extra attention they need, and want. JD

Contact me with news tips and story ideas at
jdelmont@dealernews.com or 952/893-6876.

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One Response to “Converting Buyers To Repeat Customers”

  1. Bill Shenk Says:

    Amen, Amen!! Great read!! Foundational, So often we as dealers are so consumed looking for “the next magic bean” that we overlook the obvious. There is no free lunch that I am aware of BUT there is a GREAT lunch day after day for those disciplined enough to stick to the basics. We can never sustain anything larger than our foundation (systems) will support. Then it is Hire top talent and TRAIN, MEASURE, ANALYZE, ADJUST, REPEAT !! -Bill Shenk

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