If recent research is accurate, loyal customers provide 60-70% of annual revenues. Traditionally, Buy Here Pay Here dealers invest most of their time and a significant part of their budget towards marketing and acquiring new customers. If you consider these facts, we may be miss-allocating precious time and money.
Bain & Co reported that a 5% increase in customer retention can increase a dealer’s profitability by as much as 75%. We all know that retaining customers is much cheaper than acquiring new customers but is this reflected in our actions and budget? According to this same research, customers who are satisfied are 67% more likely to buy again and are less focused on price.
Customers become loyal primarily through service. These simple suggestions may help you build loyal customers:
- Consider loyalty programs – invest in benefits for paying on time and repeat purchases.
- Reward referrals – customers are 77% more likely to visit a dealer as a result of a family or friend referral.
- Focus on service through a friendly and simple payment process. Take the time to get to know your customers. Greet them by name.
At SDA, we provide Buy Here Pay Here dealers with capital to grow their business. We also encourage our dealers to maintain the customer relationships and continue to build on those relationships by collecting payments directly – not through a third party. Call SDA to learn how our 25+ years of experience can help you grow your business, keep your customers, and drive higher profits.
