In my consulting travels, I have met with dealers with as many as 75 percent of new loan origination’s being generated from their existing customer base through repeat and referral business. Certainly, I’m not suggesting that every dealer can achieve these results but I’m confident every dealer can do better. How much would you be willing to spend to deliver 10-20 percent more units every month?
Referrals: Every dealer has a customer referral program which probably pays $50-$100 per referral. Does that excite your customers? Probably a few. What if their names were entered in a contest each time they referred a customer to your dealership? Every six months you would then draw one name and actually pay off that customer’s loan? How much would that cost? Would that be more exciting than $50?
Make this program an event! Promote it to your customers as the drawing date approaches. Remind them that their chances to win improve with every referral they make. Close your lot early one Saturday afternoon, or do the drawing one evening. Invite your entire customer base. Pull out the grill and fire up some burgers and dogs. Bring in a clown, do face painting, play music and have fun.
Your customers live, work and socialize together and what better way to market than use a network you already own. To achieve maximum results, you will have to build strong relationships with your customers and that begins with the level of service provided from their first visit to your location until you deliver their title to them. This may be a change in your mindset, but if you and your entire staff understand the concept that “you are the overhead, and your customer is the profit”; you can create change in the culture in your dealership.
Current Customer Maintenance: If you create an environment where your current customers have the ability to work out of payment problems and continue to drive their cars and make their payments, you will in turn have more customers who will buy again. If your BHPH philosophy is to sell cars and demand payments be made as contracted each week throughout the term of the loan, you don’t understand the lives of your customer. Your customers will move, get sick, miss work, get fired and quit jobs just like you and I. The difference is that they have no financial support system to help them get through these times and their ability to pay their bills is seriously hampered. If you understand this concept and create an avenue to work through these inevitable situations, you can retain these “good” customers. These good customers will pay off their loans and buy again.
Repeat Business: There is a theory out there that the best BHPH customers “graduate” to secondary and prime finance. The reality is that some do. The reality also is that if you treat your customers with the utmost respect and provide genuine, professional customer service the majority of your customers will never leave. The best philosophy of BHPH is one that states "I don’t want to sell you a car, I want to sell you your next ten cars.” That philosophy will encourage long term relationships with your customer.
Our customer spends his/her life balancing limited funds with the costs of living. They are accustomed to being beaten up by every collector from the power company, to the phone company, to the landlord. You would be amazed how grateful your customers will be if they are treated like human beings (they are, don’t forget) and you listen to their problems with understanding. If you create an environment where you will work with their financial situations, your efforts will be greatly appreciated. These customers will become ambassadors for your dealership as well as truly be “captive” customers.
Adopt these gold-mining programs, create a customer-oriented operation and you can be assured of generating more sales volume, saving your marginal customers re-marketing your best customers. Do it all for a fraction of the cost of attracting new customers to your dealership.