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A new benchmark report published last month by RSR Research, provides some interesting information about retailers and the shifts in focus and importance from 2012 to 2013.


According to the study, 61 percent of retailers feel customer retention has become more difficult, and building loyalty has become more challenging. This is a 10 percent increase from 2012. The study advised “if retailers are going to have collective leadership and responsibility for the customer experience, then they need to ensure that everyone is working off of the same vision for what the customer experience should be.”


In many businesses, there exists a general expectation that all employees proactively ensure that customers have a great experience. The problem is that there is typically not a single person charged with being responsible for it. You cannot have a goal of providing a great customer experience if you aren’t tracking whether or not you are providing it. You can’t rely solely on CSI scores and surveys from your OEM. You must have a process in place that surveys your customers and an employee in charge of analyzing the results and making process changes as needed. According to the study, “leaders identify – at an inordinate rate – that an executive tasked with managing and improving the overall customer experience is key to ensuring new marketing techniques have relevance.”


The study further found that 61 percent of business leaders believe that there needs to be a greater focus on customer experience and less on the product. At the same time, 44 percent responded that their marketing departments don’t spend enough time building customer loyalty.


And, while 52 percent of businesses with above average sales growth say that their marketing department is not spending enough time acquiring new customers; surprisingly this number rises to 100% for businesses with below average sales growth.


Dealerships have always spent the majority of their marketing budget on new customer acquisition. As the customer base grows, they may then shift some of their budget to customer retention. The problem is that while focusing on acquiring new customers, many dealerships fail to also pay attention to customer defection. The result is that they end up simply replacing defecting customers with new ones. And, rather than achieving growth, simply maintain the status quo.


According to the study, any growth strategy of acquiring new customers “may actually mean you can’t afford to take your eye off the target when it comes to keeping existing customers happy – because they can so easily share their dissatisfaction in social spheres and thereby chase new customers away.”


Business leaders increasingly recognize that the key to a successful growth strategy is to recognize that new customer acquisition must include a strategy for customer retention. It does not work to simply keep refocusing your efforts from one to the other. There has to be a symbiotic relationship between them.


Don’t try to plug the dam by running around sticking your finger in one hole to just to have another leak appear. A strategy that combines acquisition with retention along with successful execution will allow you to plug all of the holes at the same time. 

Views: 208

Tags: acquisition, business, customer, employees, growth, retention, sales, strategy


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Comment by Mike Gorun on September 25, 2013 at 7:47am

Hi Brian, Other than the quotes and sourced data, this is an original article, as are all of my blog articles. Thanks for the in-depth comment again and thanks for the compliment, Tom.

Comment by Brian Bennington on September 24, 2013 at 6:47pm

Mike, I think you have it in for me.  Every time you post something you tear me away from my writing.  I'm going to have to "quit" email just so I won't hear the "ding" of any more of your excellent blogs.  Tell me, is this a reprint or did you rewrite it?

As to paragraphs 1 & 2, this "everyone is working off the same vision for what the customer experience should be sounds like a uniform vision of improved customer satisfaction and, besides being damned near impossible for a group to have the "same" vision of anything, I'm sure you remember your "Customer satisfaction is worthless, customer loyalty is priceless" Jeffery Gitomer post.  As to surveying your customers, my experience is management really doesn't want to modify anything if it counters their personal beliefs (read that as gut feelings) no matter how much data they're shown.  It's easy to understand why there's often failure even when they do "see the light," as the middle managers (desk guys, closers, Fin. Mgrs., etc.) are the one's usually directed to make any changes, and the ratio of them who will take on more responsibility vs those who want the comfortable status quo is about 1 in 20, and that's being optimistic.  As for collecting and analyzing customer responses, I've been building simple surveys into certain programs I sell for over 20 years, based on what I did for 20 years before that, and they're designed to not only get a solid read on what customers really thing, they collect customers comments for use by the selling rep in future presentations.  I'm big on multi-uses for the components in the programs I sell.

As to the balance of the blog content, this RSR Research reminds me of generals offshore in ships viewing the battle on the beach "through heavy lens."  Someone in their organization should get "up close and personal."  As to building loyalty, these guys are like many who talk about building it like it's a new showroom.  If only it were that easy.  Loyalty is a feeling much like love.  It differs from person to person and from day to day.  Everything you can describe as important in building a relationship is the same for loyalty.  Honestly, business has it backwards.  As an example, lets say you wanted to encourage a person to like you more.  Is it better to try and convince them they should because you're good looking (we've got a brand new showroom), you're considerate (our service dept. is open 24 hours a day), your well experienced at making your friends happy (we have the best CSI in the state) OR would it be better to give them reason why you like them?  Remember, all people want to hear is admiration and reassurance.  If they believe you really like them, that trumps everything.

As to the growing importance of retention, it's important anytime, but especially if business turns "down."  We checked our client dealerships' past customer sales during the recession, and previous customers jump up about 30% of overall business, not because more were coming in, but because a larger % were staying and fewer new customers were coming in.  I could go on and on, but here's my last observation.  The best members of dealership staff to build loyalty are the reps.  They're the ones who gained enough trust to make the sale, and I don't mean a set of tires by a service advisor. They collected the big bucks.  Their customers stepped up because they believed the rep liked them, so they trusted the rep.  The easiest way to work on the loyalty deal is through that event, and the rep/buyer relationship.  I'm sorry, you managers, but if you want that special loyalty, you better plan on going eyeball to eyeball with customers, and earn it the way a rep does. 

Comment by Tom Gorham on September 24, 2013 at 4:37pm

Mike, great post ! I really like your title and as in marriage, customer acquisition and retention become one.  This is true when you understand that reputation resulting from loyalty and retention results in acquisition.

As you say, CSI and surveys by your manufacturer hold little to no weight for potential consumers but online reviews and online/offline referrals by family and friends can be a great recommendation for your dealership.

You state that, "You must have a process in place that surveys your customers and an employee in charge of analyzing the results and making process changes as needed."  That is exactly what I have laid out in my recent post, "Measuring Your WOW Factor (and other attributes) ".  Sorry for the plug but I think, if you haven't read it, you will be pleasantly surprised by the correlation with your article here.

CSI is a pre-Internet, pre-Social, pre-online reviews program that encouraged dealers to provide good customer service.  It provided no lasting benefits for the consumer and no boost to customer referrals and acquisition.  Thank you for a great post!

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