Maryland consultant Paul Ward offers these pointers on building and managing customer relationships.
How much customer contact is too much?
If the contact provides genuine value as defined by the customer, and if the customer is asked how often she/he should be contacted, then these contacts can occur more frequently.
The problem here is that value is defined differently by different people. Find out from your customers what matters to them: Day care while a car is fixed? High-speed Internet connections? Loaner cars? Regular reminders, or no reminders, about maintenance?
In fact, you should consider getting completely out of the product mentality. If you sell Mini Coopers, you could partner with a travel agency that puts together package tours to Italy and co-market to your customers.
If you want your oil change sales call to be welcomed, it certainly wouldn't hurt if the customer gets a shot at a week in Venice if they show up for that service.
As a consumer, what would you like to get from your dealer? Free car washes? Pick up and delivery service when your vehicle goes in for maintenance? Loaner vehicles?
That's precisely the question you want to ask customers.
When they buy a car from you, see what value drivers matter to them. If nothing you can do will convince them to drive 50 miles to get an oil change from you, then take them off that promotional list.
And think outside the box: If you can help them get value from their relationship with you by partnering or putting on events or sending their kids little model cars on their birthday, you'll be going a long way to having a relationship for life.
Are there opportunities for automotive-related businesses, such as tire outlets or aftermarket trim retailers, to develop ties to dealers?
The challenge dealers face is that consumers can check for parts and prices on the Web. This is why it's important to partner with the right organizations as a way of providing more value. These may, in fact, be tire outlets, for example -- although keep in mind that many tire companies also provide the same maintenance services that are your bread and butter.
The point is that automotive-related businesses may be the wrong segment. You may want to partner with companies that are customer interest-related.
The payoff is that just a 5 percent improvement in loyalty can represent another 25 percent in aftersales service profit for dealers.
The suggestion that retailers should concentrate only on the most profitable customers is surprising. Is that true for new-car dealers? How does the dealer determine who the best bets really are?
If you want to provide affordable value-added services, this means that the likely revenue lift for your marketing must exceed your total costs.
If you focus on profitable customers, this by default means you're focusing on those customers who are cheap enough to market to. The problem with this approach -- and it's a problem rife in industry -- is that focusing only on profitable customers makes you lazy.
You have to look at improving your processes so it becomes less expensive to serve and delight all your customers from the very first time they call you or walk into your showroom.
So when you market to customers you understand, you won't waste your money or their time. And if you think of CRM (customer relationship management) only as a sales tool, you're prepared to waste both money and time. Instead, CRM is a strategy.