The Cost of Lost Loyalty to Your Shop

How long does it take to lose a customer?

In the automotive service business, where even the most loyal customers only come in a few times a year, valuable business often slips away unnoticed. In fact, at a busy shop, it’s not uncommon to lose around 200 customers per year. In lost revenue, that can mean deficits totaling $187,000. That’s a pretty big dent in the bottom line, and that’s the price of doing nothing.

Most shops react to this annual loss with a push to find new customers. In addition to finding new customers, you can implement a program to bring back those once loyal customers. Studies show that repeat customers generate 44% more income for your business in comparison to new customers, yet shops are all too likely to take that loyalty for granted. The fact is, its easier and more cost-effective to keep your current customers coming back than it is to court new customers.

Do you know which of your customers are likely to disappear next year? Do you have a plan in place to win them back?

The best thing to do is implement a program that flags customers who were coming in for service every 3-4 months, but haven’t been in for the past six months. Then, trigger a “We Miss You” campaign, specifically designed to bring these customers back. Some customer loss is unavoidable, people move away, they sell their cars, etc., but many are lost to a competing shop or  the shop that happens to be in front of them when they glance at their odometer and realize they need an oil change. A customer recovery program can help you find and target those customers, to remind them of the superior service that they can expect from you.

You may not win them all back, but even a fraction will make a significant difference. Referring back to our earlier example involving 200 lost customers, recovering just 20% of those customers will amount to close to $20,000 in revenue. With customer recovery programs costing less than $40/month, it’s easy to see the cost-benefit.

Even the best shops lose customers every year. The smart shops know how to get them back.

 
MechanicNet is an automotive technology company based in California with offices in Toronto. Since 1998, MechanicNet has offered the automotive aftermarket a marketing solution that uses technology to deliver advanced communications and web-based tools. To learn more about MechanicNet or about implementing a customer recovery program, visit www.mechanicnet.com.

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