When it comes to business, we tend to think of assets as items we have invested in, like our buildings, land and equipment. Yet one of the most important assets you have paid for and own is your past and current customers. Your customer base is the biggest and most important asset that you have. Like with your other assets, to make sure you are getting a good return on your investment you have to make sure that you are working constantly to keep it active.
Put it in perspective
Every customer that you’ve ever had has a lifetime value you can attach to them. Think about your commercial cutters. Over a period of say 20 years, how much equipment, parts and service would one small commercial cutter purchase? Let’s say that every five years they purchase one zero-turn mower, a backpack blower and a string trimmer. On the low side you are looking at them spending $6,000. Now throw in some parts and service over a period of five years and you are looking at around $7,500. So conservatively in 20 years, assuming that the commercial cutter doesn’t grow his or her business at all, they represent a minimum of $30,000 in sales to your dealership.
As you think about the value of a customer, whether it be a commercial or consumer customer, they all have a lifetime value, and your goal in business is to make sure that you are capturing as much of that as you can.
If you want to take advantage of the maximum dollars you can receive from a customer, it’s important that you have an active relationship with them. It’s critical that your customers know that you value their business and that you offer products and services that they can continue to benefit from.
Market to existing customers
People only notice what is relevant to them. You have seen this happen in your own life when you have purchased a vehicle. Prior to making the purchase, you drove by vehicles like you purchased on a regular basis without noticing. Once you made the purchase of your car or truck, you suddenly noticed that there were lots of other people who had the same model as you. The same holds true for your dealership. If you assume that all of your old customers know what you have to offer and will buy when they are interested, then you are more than likely missing out on some easy sales.
Everyone in your customer base needs to be reminded on a regular basis about the equipment you sell and the parts and services you offer. The easiest way to make them aware of what you have is through a direct-mail piece. Keep in mind that with direct mail some people will act upon it immediately while others may take some time. So if you send one letter out to customers and get only a limited response, don’t give up, send the message again. It can even be the exact same message.
Advertising is about consistency. Most people need to hear a message multiple times before they act on it. If you are proactive and consistent in keeping in touch with your customers, you will remain relevant to them. When they need your product or services, it will be a natural decision to purchase from you.
There is an old saying that a bird in the hand is worth two in the bush, and the same holds true with your existing customers. While it is exciting to focus energy, effort and dollars on attracting new customers, your dealership’s most valuable asset is your existing customer base—and it will pay big dividends in 2013 if you will focus more of your resources and energy in reigniting their passion toward your business.
Bob Clements is the president of Bob Clements International, a consulting firm that specializes in the development of high-performance dealerships. His organization works hands on with dealerships throughout North America, helping them attain the personal freedom and financial wealth all entrepreneurs strive to achieve. For more information, visit www.bobclements.com.