What every economic downturn has really shown me is that good economic times make dealers, or any business, lazy. Dealers work hard in tough times but go into cruise control when the economy is fine. This article is about how to avoid leaving money on the table regardless of what the economy is doing. Learn these habits in good times when there is no pressure and when Bad Times hit you will be ready for them.
In a good economy, companies tend to skim the top of the money pile or as some people like to say, pick the low hanging fruit. To avoid this trap, we need to implement some very common direct marketing principles. The areas we want to address are Advertising accountability, lead management, database mining, and increasing the lifelong value of a customer.
Advertising accountability is an important topic because even when managed correctly, 25% of all your media dollars go to waste. If you do not track your media, you will never know which part of your advertising is not working. Tracking your Advertising Dollars is as simple as putting a different response methodology on all of your ads. The most common way to track your advertising is by using different phone numbers. Another way that is becoming more common is to track with different websites. In good times, you can get away with wasting advertising dollars. In bad times, stretching those advertising dollars is not only important, but it could mean the difference between turning a profit and losing money.
Lead management is how you handle the customers that call as a result of your advertising. In good times, it is simple to go after the easy sales. You are generating more leads than you can handle. In bad times, when your advertising can result in response rates that could be half as much or less of the response you had been generating, working the leads becomes critical. You have to work twice as hard to generate the same number of sales. A system should already in place to brief you for any economic down times. How you choose to handle the customers that do call you is your business, but every caller needs to be nurtured as a potential customer.
Database mining is defined simply as searching through your current database for potential customers. There is no easier customer to obtain than the one you already have. Too many dealers overlook this customer in their haste to find new customers. Maybe it is not as exciting as making that new television commercial or promoting a tent sale. What it is though, is profitable. It is profitable for sales but it may be even more profitable for your service department.
Lifelong value of a customer sums this conversation up nicely. The greater the lifelong value, the longer the customer has been a customer. This would indicate to me that you value your relationships and that you work on those relationships every day. It also tells me that your customer values that relationship as well. If they did not, you would not have them as a customer. Therefore, customer satisfaction is the key to maximizing lifelong value. You do this through communication.
By concentrating your business efforts on these four area, you may be able to withstand a market downturn. It only takes the will and actions to want to better your dealership.