How much money do you spend each year trying to attract new customers to your business? Think of all the ways we allocate our advertising dollars in an attempt to bring in new opportunities: TV, radio, direct mail, coupon tabloids, email, prepaid group coupons, websites, etc. While some forms of advertising are more difficult to measure success rates of than others, the bottom line is, we can usually determine the dollars spent to recruit new customers with a few simple calculations. Simply add up all of your advertising expenditures (excluding reminder mail or other retention programs), and divide that number by the total of new guests you serviced. Doing this math, my dollar amount spent per new customer recruited in 2017 was $9.90.
Complicating matters is whether you include the cost of any potential discounts in the cost of recruitment or fees associated with prepaid oil change offers on group discount sites. In 2017, we found that our overall revenue on a prepaid service was only 33 percent of the overall value of the service. That is a much steeper cost to bring in a new customer over our traditional marketing efforts. I think many of us would agree, though, that the cost would be acceptable if it was bringing in truly new guests and that those guests would turn into repeat guests down the road. That might be a topic for another future article.
The point of this article, though, is not to look at the cost of your marketing or recruiting efforts or the hidden “costs” of those group discounts, but to share ideas on how we retain guests once they come onto your lot. We have all seen it. A customer pulls on to our lot, the greeter walks out to talk with the customer, the greeter comes back and the customer drives away. The greeter goes back to what he/she was doing and it seems everyone just gets on with business as usual. As a manager or owner, how many times do we ask that greeter, “What happened with that customer?” I would be willing to bet that most of us do that on a pretty regular basis.
Most managers and operators I have talked to tell me the No. 1 reason customers leave the lot is over the price of a service. Let’s just use a typical oil change as an example. A customer pulls up, asks for the price and decides that price is too high. Most of the time, they will even tell you, “Hey, I can get that down at the diaper store for $X or the tire store for $Y.” Most greeters or CSAs I know, and I know many, take those as fighting words for some reason. How dare they compare us to the diaper store or tire store? We are way better than them.
That’s when I typically suggest, “Why don’t you show them?” After a confusing stare, the typical question is usually, “Show them what?” “Show them how good you are!”
Look, I know you are better than those competitors and you know you are better than those competitors. But at the end of the day, a customer looks at this oil change right here as being worth $X or $Y, and not what you want to charge them. Your challenge, then, should be to show the customer your service is, indeed, worth what you charge. The only way for you to prove it to them is to get them in the service bay.
I am not suggesting you give away the farm or offer to price match the competitors as a matter of policy. However, my philosophy is if I just paid $9.90 to get that new customer to pull up on my lot and it is going to take a discount of another $20 to keep them there, I am still money ahead if we turn this customer into a loyal repeat customer. Not only that, there is now an opportunity to turn this customer into a true advocate for your business. They are used to going to the competitor — who’ve we already established is not as good as you — so when they are truly wowed by your service, you are going to have them telling their friends, family and social media network how great their experience at your shop was.
If your philosophy as an owner is to not discount your service, then maybe look outside the box a little on ways to keep that guest on the lot and driving into your bay. Maybe you can offer a complimentary add-on service that gives the customer value and costs you little: tire rotation, fuel treatment or windshield treatment. In the case of a tire rotation, if you offer brakes or other services like that, now you’ve opened up even more opportunity to offer additional services to that customer. A small price to pay to keep them there and give you that opportunity.
Now, not all drive-offs are over price. The second most common reason I hear is, “They thought it was too busy.” Most of the time, this comes down to a time estimate provided by the greeter that may or may not give the customer a feeling that they’d be there too long. My favorite way of keeping the guest on the lot is to ask, “How long do you have?” If they have enough time and I am confident we can get them out in that amount of time, I will offer a guarantee like, “If we don’t get you out in X minutes, the service will be on me.” Obviously, you can only do this if you have complete confidence in your team to get the guest out on time.
There are other ways, though, to keep that guest on the lot. What if the customer is worried about getting back to work on time and it looks like you might not make it? What about offering them a ride to their work through a ride sharing service? We have set up accounts with the major ride sharing services that allow us to schedule a pickup and drop off of a guest on our corporate account. In many cases, these rides cost us less than the amount of a discount we’d offer to keep them there. Speaking of discount, another option is a bounce-back coupon that the guest could use the next day or maybe later in the week when you are less busy.
In summary, as operators, we spend a lot of dollars on marketing and recruitment of new guests. The hard part is getting through to potential new customers and getting them to make that journey to our shops. Once there, it is up to our service team to keep them there. Make sure you give your team tools to use to keep those guests from turning around and leaving. A small investment of time training your greeters and CSAs to never let a guest turn around could lead to large returns down the road.
