Customer Acquisition and Retention

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On this week’s episode of the Weekly Tune-Up, CBT’s Jim Fitzpatrick talks to fixed-ops expert, and regular CBT contributor, John Fairchild of Fairchild Automotive Solutions. Jim and John discuss the customer acquisition in the service department and how to effectively retain those customers.

 

VIDEO TRANSCRIPTION:

Jim Fitzpatrick: Hi everyone. Thanks so much for joining me, Jim Fitzpatrick with CBT News. Today we’re going to talk to John Fairchild on the weekly tune up. Thanks for tuning in. John, welcome to CBT News.

John Fairchild: Thanks for having me.

Jim Fitzpatrick: Yeah, sure, sure, sure.

John Fairchild: Glad to be here.

Jim Fitzpatrick: Let’s talk a little bit about customer acquisition and retention. I know that that’s always near and dear to every dealer’s heart to say, “How do we get more people into our service department? And then more importantly, how do we get them to stay and keep coming back to that service department?” I think the industry still suffers from about only 30 or 40% retention overall, right?

John Fairchild: Yeah. You mean as far as from the aftermarket?

Jim Fitzpatrick: Yeah.

John Fairchild: Yeah. No, and I can appreciate that. And my focus is certainly more on the retention side of it than it is the acquisition. The acquisition of the customer really should be selling them a car or word of mouth or tremendous customer service, creating that relationship where you’ve getting referrals and testimonials from your natural customers. But really what I think that without even acquiring any new customers, can’t we do a better job with the people we already have? The answer is yes. The answer isn’t always, doesn’t always lie with a newbie coming in the door.

John Fairchild: And that’s really my prime focus with a dealership is maximizing our current traffic. Whether that be customer satisfaction or whether it be profitability and both certainly correlate together. If you’ve got, you have a tendency to have the best paying customers, the one that’s paying the most money with your dealership actually being the happiest customers too. You know why? It’s because, it is cliche, but it’s true that maintenance is less costly than repair. If we can give them that convenience of getting their vehicle serviced before it breaks down and then they’re never having a trouble, they’re always got a smile on their face.

Jim Fitzpatrick: Right, right. And that’s the key to it. In terms of retention, what are some of the things that the dealers that you could, if you had a top three or a top five list of things that dealers can do to retain their customers better?

John Fairchild: Very simple things. Very simple things that you guys have all heard about, but you’re probably not doing it. Is this, is a number one, do we have the correct contact information for that? That may sound really stupidly simple.

Jim Fitzpatrick: The person moved three times.

John Fairchild: Stupidly simple. But are you measuring things like the email address absorption with your service advisors? Are your service advisors have a 75% or higher email absorption? I don’t think so. And that’s one place to start. Number two.

Jim Fitzpatrick: Let me just zero in on that one. Why is that a problem? Are people afraid to ask for somebody’s email address or customers even not willing to give it? Nah, you don’t need my email address.

John Fairchild: Now, that does happen. I see that happening more in very rural communities and maybe in an aged population where you’ve got maybe snowbirds.

Jim Fitzpatrick: Yeah, it’s true, south Florida or something like that.

John Fairchild: Or a retirement population that don’t have emails, they just literally don’t have them. Or a very, very rural area. But that’s going away also. But no, I think it’s just really boils down to that nobody’s really coaching them through it.

Jim Fitzpatrick: On how to get it.

John Fairchild: Nobody’s taking critical metric. They don’t know what is my rate of absorption of email? And I guarantee you if you go back and look at it and if you don’t know how I can help you, but if you go back and look at it by adviser, what percentage of tickets did that advisor write in any given timeframe, let’s say last month, that had an email address on the ticket? Let’s start there. Because any kind of retention effort to go out to those people, we got to have that email these days. We got to have a valid phone number. Those are the top two things. We’ve got a valid cell phone and an email you’re golden.

Jim Fitzpatrick: Yeah, you’re halfway there.

John Fairchild: Address is great, but anymore, it’s not so much about the physical address. Some other types of retention that I got two other really basic ones that dealers miss all the time is, we’ve talked about this before in one of our Skype conversations is if I come to you and you’re a salesman and I don’t buy a car from you today, I might go down the street and buy a car from another dealership.

Jim Fitzpatrick: Unsold prospects.

John Fairchild: But you know what I’m about to say, if I don’t buy that transmission service today, it’s not necessarily that I’m going to go down the street and buy a transmission service. Matter of fact, the very idea that I needed a transmission service probably hadn’t even caught my mind at all. People don’t buy the first time you ask them in the service department. That’s just a fact of the matter. Some do, but statistically a very, very small amount. All of our efforts should be in reminding that customer ongoing in a nice, amicable way during the relationship with that customer. But if we fail to do that, then it’s lost in the ether and then the customer is really going to have an impression that it really didn’t mean that much. The number two thing is using your declined operation codes through whatever DMS you’re on.

John Fairchild: Now, if you’ve got some of the advanced systems, it’s doing it electronically from the multi-point inspection, placing that onto your ticket. And then if you don’t sell that job, it automatically resides there. But I’d only, I’d say less than 5% of dealers have that system, 10% maybe. Everybody else you’ve got to manually book that when you’re booking that ticket. Folks, if you’re not doing that, it’s not just another function. This is helping you create a snowball that’s going to gain over time. And guess what? People start coming back and saying, “Hey, you’ve been telling me for a couple times I needed a transmission service. Let’s go ahead and get that done.” That’s number two.

Jim Fitzpatrick: It’s also gives good data to your BDC that are making, outreach, outgoing calls to say, “Mr. Jones.”

John Fairchild: And we’ll talk about the facets of that there. But that’s a tremendous point. Yeah, and I think the number three thing about retention that I really don’t see dealers do pretty much at all, I’ve got a few dealers doing it, is setting the customer’s next appointment. Today I had an emergency dental appointment. I didn’t even tell you, over the weekend, Thanksgiving. Had a filling come loose. Oh, misery. I got an emergency appointment, I got in there got it out. Guess what happened on my way out?

Jim Fitzpatrick: They set the appointment.

John Fairchild: They set my next appointment. Do you think they asked me?

Jim Fitzpatrick: No.

John Fairchild: They didn’t ask me.

Jim Fitzpatrick: They gave you the card. They tell you, they say the next one, here’s your cleaning.

John Fairchild: And how awkward is it to say to a customer, “Hey Jim, can I set your next service appointment?” What are you going to say?

Jim Fitzpatrick: Yeah, no. Yeah.

John Fairchild: Yeah, or I have no idea where I’m going to be. Let me call you. Whereas if I just said it with a statement and I had the appropriate followup, you’re talking about BDC and I know we’re going to get into that more in a minute, but the BDC aspect of it, if you’ve got that capability, you can operate just like a dentist office, right?

Jim Fitzpatrick: Yeah, of course.

John Fairchild: What I’m doing is I’m setting you an appointment reminder. Hey Jim, what I did is I went ahead and set you an appointment reminder so I could get you in and out of here quicker the next time. And hey, no fear if you can’t make this appointment, we always call you a couple of days ahead of time. Let me make sure I got your email address properly too because I’m going to make sure.

Jim Fitzpatrick: Get you the email address.

John Fairchild: And I’ve already established that I can send you text messages, so you’ll probably get a text reminder about this appointment.

Jim Fitzpatrick: Great.

John Fairchild: Those three things really are the essence of what I think dealers are missing out that are just stupidly simple things. Is gathered all the customer, make sure you’re gathering all the customer’s information that is a metric you should track. Look at it by advisor and address your advisers accordingly. Set your declined op codes appropriately and make sure your advisors are using them. That’s another simple metric you can look at. And last is setting the future appointment visit and making sure that you’re accommodating that customer with a statement, not a question. Does that make sense?

Jim Fitzpatrick: John Fairchild, retail automotive trainer and president of Fairchild Automotive Solutions. And that’s the key is that you have the solutions.

John Fairchild: Yes sir.

Jim Fitzpatrick: For the sellers that are out there listening to us have this discussion today, man, give John a call if you’re wanting to take your 2020 net profit to the nth degree, right?

John Fairchild: Please do. I’m here for you. I only want dealers that are really committed to change Jim.

Jim Fitzpatrick: And you’re real world.

John Fairchild: That’s right.

Jim Fitzpatrick: I know because I’ve been in the business and talking to you over the years. It’s, these are real, real, real, real life solutions.

John Fairchild: I’m a real guy.

Jim Fitzpatrick: You are. Well thanks so much for joining us.

John Fairchild: Thank you. I appreciate the time to be in the studio and it’s always a pleasure.

Jim Fitzpatrick: Yeah, it’s great having you in.

John Fairchild: Thank you.

Jim Fitzpatrick: Thanks.

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