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Who Needs Referrals Anyways?

Our industry is typically one of immediacy. Questions like “What would it take to earn your business right now?” are very typical and used daily. Not many sales managers would feel comfortable with – or approve of – a salesperson allowing a customer to leave the dealership (or lot) without a TO, simply because the customer says they aren’t ready, or are just beginning to shop. Managers typically stress the importance of buying now. As a result, salespeople naturally get laser-focused on accomplishing this. The customer who leaves without buying is a missed commission for the salesperson, and a potentially missed opportunity for the store. That being said, the thought of referrals typically doesn’t cross either of their minds until a customer has bought a vehicle – if at all. But why?

The fact is that I highly doubt many people intentionally entered the car sales industry as a career. Many of us, in fact, sort of fell into it.  And, once we figured out that we could make good money, ended up with car sales in our blood and stayed. Across our industry, dealership staff turnover, especially in the sales department, is reportedly around 70 percent. Sure, that number varies by dealerships. But, unless a salesperson has worked for a single dealership for 5 or more years, there is no way they can fail to notice the lack of job security in the industry. For a new salesperson, the revolving door of salespeople, combined with any insecurity or indecision they may have about remaining in the car business, can leave little motivation for them to even think about a potential future sale to the customer they just sold a car to, or to that customer’s friends and family. They made their commission and are off to find the next one. The salesperson doesn’t even know if THEY are going to be in the car industry 3 years down the road – much less at that dealership.

referralsThis mindset can turn a great customer buying experience into a poor one. The salesperson could have done everything in his or her power to create and sustain an excellent buying experience for a customer. Once the customer leaves, however, their thoughts turn to their next sale and the customer that just left becomes an after-thought. A friend of mine recently experienced just such an experience. She purchased a new vehicle and had an excellent buying experience throughout. One of the things important to her, however, was getting a thorough delivery on her new vehicle. Most important of all was an in-depth review of all of the technology in the vehicle, as it was fully loaded with all the bells and whistles, adaptive cruise control, nav system, back up camera, blind spot monitoring, and on and on.  She repeatedly stressed to the salesperson that she wanted him to be sure to take the time for a thorough run through.

Due to some accessory installs that needed to be done prior to delivery, however, the walkthrough wasn’t performed until a few days after the sale. When she returned to pick up the vehicle, the salesperson spent minimal time going over the vehicle with her and left because he needed to meet with his financial advisor, who was hovering in the background throughout the delivery. This failure on his part ended up transforming the excellent experience she had up until that point into one that left her unhappy. But why did this salesperson who had listened and provided her with that excellent experience ruin it after the sale? More than likely because they were not thinking about potential referrals she could (and would) have provided to the salesperson. This short term thinking is exactly the reason why dealerships find themselves struggling to get referrals from customers.

How then can you increase referrals, knowing that many salespeople are operating from this short term mindset? You implement processes that will achieve this goal that aren’t dependent on that mindset.

In our industry, there are two types of referrals – direct and indirect. Direct referrals are those whereby a customer actively recommends your dealership to someone they are acquainted with. That person then comes in because of that recommendation. We know that consumers tend to trust the opinions of their family and friends more than any other source, including online reviews. Indirect referrals involve everything from the paper plate or brand logo affixed to the vehicle, to a person noticing their neighbor’s new vehicle, to photos and video shared on social media platforms. None of these types of referrals are within a dealership’s ability to control. Sure, you can implement a policy of asking for referrals in your sales process. But, many people are hesitant to provide their friends and family members contact information to a car dealership without obtaining their permission first. And, for the most part, that permission simply isn’t possible to obtain during the sales transaction.

There are two ways to increase both direct and indirect referrals without relying on a salesperson’s request, or automated follow up emails requesting referrals, which are typically pretty ineffective. First and foremost provide an excellent customer experience both before and after the sale. Failing to do this will almost certainly result in a lack of referrals. Instilling the importance of the customer experience in your entire staff and ensuring that your processes are conducive to this outcome, will assist in your efforts.

The key is to give the customer the experience they want. Make it easy for them to shop with you. Increasingly, consumers now want to do most of the process online and just come in and test drive the vehicle and sign the papers. Make sure your online showroom offers a good experience too. Have a high quality and fast and easy credit application. Display your inventory well. Consider apps that allow the consumer to do most of the process via your site, interact with you, get price quotes and submit counter offers. If the consumer prefers to do their research in the showroom, make it easy for them there too. The customer will dictate how fast or slow they want the process to be. Make sure your coffee doesn’t suck. Work with them. Have free customer Wi-Fi so they can research the competition, if they wish. “Showroom-ing” is happening anyway, you can’t prevent it. Why not make it easy and win by making the experience better so that the customer wants to shop with you.

It’s really a matter of combining both old and new technologies to give the customer the best possible perception of their experience with you. Try the old school approach and don’t abandon the customer after the sale. Consider having your sales reps send a gift to the customer after the sale — It can be as simple as a tin of cookies.  Ideally send it to their workplace where they will share them and most likely tell co-workers where they came from.  This can stimulate actual word of mouth referrals.  Send a thank you card or note – Hand written letters/cards are a lost art and have a bigger impact than ever before – Because no one does it anymore.

Secondly, leverage your customer’s desire to share their new vehicle purchase with their family and friends via social media — which almost all of them will do. Sadly, most dealerships don’t have a consistent process in place to take pictures or video of their customers so the customer typically waits until they get home to snap pics of their new vehicle in their driveway, which they then post and share. At this point, the dealership has lost out on the incredibly powerful opportunity to get exposure for their dealership on their customer’s social network. It’s completely natural for customer’s to share their new vehicle with their friends. What’s not natural, however, is for them to include any mention of the dealership in that sharing. For example, many customers will post that picture of their new vehicle with a comment something along the lines of “Check out my new car!” What they don’t do, however, for the most part, is say something like “Check out my new car that I bought from ABC Motors!”

If you have a branded delivery area where you snap the pics, you automatically get included in the social media share. And the more creative your photos – the more the customer wants to share yours, versus any they may take. Have them jump in the air, hug the car or whatever. Have fun with it! This branded content generates direct referrals through interactions on the shared content (i.e. “We were thinking of buying a car. How was your experience at ABC Motors?) And, indirect referrals through simple exposure to their networks (i.e. Johnny bought his car from ABC Motors and mentioned they treated him well, so maybe we should give them a shot at earning our business.)

Also consider friending the customer on Facebook or Instagram – this takes extra effort and not all customers will be open to this. Even if you only get 1 in 10 to say “yes,” you still have a great opportunity to become the “Car Guy” in their circle of friends.

None of these types of referral generating activities can happen, however, without a great customer experience combined with the dealership itself actually generating and providing the customer with high quality branded content.

In no way am I suggesting that your salespeople shouldn’t follow up with their sold customers and ask for referrals. What I am saying is that perhaps by also incorporating these techniques, you can increase the possibility of earning referral business without relying on a sold customer’s willingness to provide direct contact information for their family and friends. Referrals tend to occur naturally in interactions between customers and their friends and family. Providing branded content simply serves to ensure that your dealership makes an appearance in those interactions. That is a powerful message to be sending and the best part is that your customers are sending it for you.

Paul Moran
Paul Moran
Paul Moran is President and CEO of Vboost, Inc., the first proactive process to create positive viral marketing in the retail automotive space. He has over 28 years of experience in creating digital marketing programs and introducing dealers to effective technologies. His expertise covers all aspects of traditional, digital and social marketing. He can be reached at

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