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Here's a good rule of thumb for you about new technology: if it limits customer interaction it's probably not a good idea to go with it. That is, if a new technology, no matter how much time it saves you, takes AWAY from your ability to build relationships with your customers, then you're better off without it. Earlier, I was talking with B.A. Nerison, owner of Wheel City Auto in Sioux Falls, South Dakota, he had this to say about the lack of relationship building opportunities that debit card and ACH payment options has brought to BHPH, "In days past customers used to pay in person, at the dealership. This gave us the opportunity to build relationships with our customers, one-on-one. With today's automated payment options it has become increasingly more difficult to build personal relationships with our customers. This has had a direct impact on the delinquency and repossession rate at buy-here-pay-here dealerships."
I'm not against these types of payment methods, they do make things easier, but at what cost? While building customer relationships is important to any dealer, it's even more so to a BHPH dealer. Sure, we're all happy when a sale is made but without the ability to collect payments, a BHPH dealer is out of business. With the onset of social media, BHPH dealers are, once again, given the ability to connect with their customers and in a very personal way. As B.A. said, later in our conversation, "We don't want people thinking, 'it's okay if I default on my loan at the dealership,' we want them thinking, 'I don't want to let Jeff down, he took a chance on me when nobody else would.'"
The whole idea behind social media is to bring us all a little close together and it can and should be used as a tool to connect with our past customers, as well as connecting with potential customers. Imagine if, as a BHPH dealership, you were able to bring your default rate down just half a percent, how about a full percent, two percent or even five, do you think it would be worth implementing then? Of course it would!
Increasing Relationships to Decrease Delinquency
It's common practice for a BHPH dealership to tell their customers that they want to aid them in rebuilding their credit but few of them actually follow through, and I'm not talking about just reporting to the credit bureaus but making the actual effort to teach them how. Here are a few quick and easy steps you can use to follow through on your desire to help.
Step 1: Create a series of videos on credit repair, the difference between secured and unsecured loans, getting out of debt, the fallacies behind only paying the minimum amount on your credit cards and anything else that relates to finances, credit and debt. These don't have to be professionally produced videos, in fact I urge you against it. They should be videos created by your staff, staring your staff and include helpful information that will actually benefit your customers. You can make as many as you would like, the topics are endless and the more people at the dealership that are involved the better.
Step 2: Create a fan page on Facebook (you can create a blog for this as well, but let's keep this as simple as possible). Upload your videos, making sure to label them so that they are watched in a specific order, this way if you reference what was said in a previous video, then you know that its already been watched.
Step 3: Interact! Have daily, weekly, and monthly contests and giveaways to keep your fans engaged. Get your employees to shoot short bio videos explaining why they work for the dealership and upload those as well. Create excitement, be real and let your customers know that you're not some brick and mortar business but real life people that want to make a difference in people's lives.
Step 4: Once a month invite your fans to the dealership for a workshop, feed them and teach them, record the whole thing and get testimonials. Not testimonials about the dealership but about the information provided. Get them to talk about how the workshops have impacted their lives.
Step 5: Have fun! These is no better feeling in this world than knowing that you have made an impact on people lives. Rinse and repeat.
Some people may be thinking, how can this lower my default rate? If you take a look at what all of this really accomplishes then you see that all it is, is a way to connect with the very same people that put you into business in the first place. They will start to see their car payment as a bill that they have to pay, it won't be one of those, "oh it can wait a month." In fact it will open up a line of communication that will involve them calling you, instead of you having to call them, when they are unable to make a payment. What are you waiting for, go make a difference and see a difference.