September is Automotive Services Month here on the Signpost Local Marketing Blog! We’ll be surfacing insights and strategies specifically for marketing your auto service and driving more new and repeat business.
Not an auto professional? Don’t worry, we’ll still be sharing insights that will help you to promote your local business, acquire new customers, and encourage loyalty. Want your industry to be the next featured month? Drop us a line, and let us know!
Like an engine that requires clean oil to keep the entire car running smoothly, your auto shop needs to be actively working to generate more customers in order to keep your business healthy. One of the most effective ways to secure more new customers is to leverage your existing base. Depending on how long your shop has been a part of the community, you might have some customers who have been coming to you for years and with whom you have a good rapport. Each of these individuals —and others — can help ensure you enjoy a steady stream of new clients that will keep coming back. Referrals comprise 60% of all new business, on average, so try out some of these steps and keep growing your business!
Setting up your referral program
There are many different ways to go about this, but we’ve found that many shops tend to choose a more informal approach. However, devoting a little extra time at the start of the process to think about, define goals and set up procedures, you’ll find much more value and success of the program in the long run.
First, you have to decide whether you will offer an incentive. This could be a free service, gift or discount to the recently-referred new customer, the friend (and existing customer) that referred them, or both! You can also have these offers change, based on seasonality or other trends you see throughout the year. For example, tune-ups in the warmer months when people are more likely to be planning roadtrips, and maybe oil changes, ice/snow scraper or windshield wiper blades and antifreeze in the winter. When deciding on the incentive, be sure to do the math. You might shy away from larger offers, but keep in mind that it’s between 5-10 times more expensive, on average, to acquire a new customer than it is to get repeat business. So it could be worth investing extra resources here. We’ve found the best success when a reward is given to both parties, because they view it as a “win-win” for both themselves and their family member or friend.
Next, it’s a good idea to dig into your current customer base and create different categories or buckets that they fall into. First, identify your most engaged advocates (anywhere from 5-10% of your total current customers). These can be the people who have been clients for years and always expressed a positive view of your business, as well as those who may not have been customers for as long, but have been very vocal about their satisfaction and are eager to provide assistance, and so on. This will help you prioritize outreach, and start thinking about ways to approach them about referrals.
You can use a CRM, to track efforts, or other software (Signpost’s Mia allows you to automatically engages with your customers to drive more referrals, without having to lift a finger!) to stay organized. If you are planning to rely purely on verbal referrals (ex. “Harry over on Pine Street sent me over!”), it could cause issues with tracking and attribution when it comes to rewarding the referrer. You can consider providing your top advocates with a printed voucher or coupon for the incentive, i.e. “First Oil Change Free”, with the referrer’s name on it, so you can make a note. These vouchers can be easy to make, just make sure they stipulate for new customers only. Don’t forget to include an expiration date on the vouchers, to prompt referrals to take action in a timely manner, before they forget the connection.
If you’re looking for more advanced systems, you can create custom links for your top clients to share with friends and family. This approach is great, because of the flexibility it affords customers. They can send the link directly via email, or simply post on their various social feeds, and anyone who sees, clicks and books an appointment will automatically be logged as a referral of that original client. Again, Signpost’s Mia, takes all the manual work off your plate, and generates these unique links for your clients.
Which brings us to our next point…
No matter how you do it, just make sure you actually ASK
Despite 83% of consumers claiming they would refer a friend to a business following a positive experience, only 29% follow up and actually do. The most common reason for this, is that it simply didn’t cross their mind! Close this gap by planting the seeds early and often. Don’t leave things to chance, and don’t be afraid to provide specifics on the best types of referrals, or their impact on your business’s bottom line.
Getting the word out
Once you have your referral strategy in place, and a plan of attack, it’s time to get the word out. Speaking to your customers 1-1, is the best way to initiate efforts, and tends to have a good success rate. However, many will still forget, once they’re back to going about their business. Make sure to utilize Email and even SMS Marketing periodically to request referrals, and make it as easy as possible for customers to refer. It’s important to follow up and even devise creative ways to get more people involved. Broaching the topic with your happiest, most committed customers is one thing, but in order to engage the rest of your clientele, you’ll need to think outside the box.
These can be a great way to expand your reach! Especially if the prize is something more universally appealing, and not specific to your industry (some examples: the new iPhone, a trip, or prize pack). But a more targeted prize will usually result in a better conversion rate. You can hold a contest to see which one of your customers can refer the most friends in a month. The timeframe should be long enough to amass many good referrals, but not too long so that your customers lose stamina and interest in the pursuit. You can apply the voucher system if you’d like, just make sure the referrer’s name is included on it.
See how many new customers come in with those vouchers at the end of the month, and tally up the winner!
You can also pursue partners to set up referrals systems. Find complementary auto shops (who your offerings do not overlap with, i.e. body work vs. mechanical), and make sure they do quality work. Don’t trust other people with this due diligence, make sure to confirm for yourself that they have similar standards as you, for you will be vouching for them in this reciprocal arrangement. When appropriate, refer your customers to their businesses, and vice-versa. This will help cross-promote both businesses, and ensure your customers get great service, no matter what their needs!
You can also perform outreach to larger business centers in your community and work out a plan to include discounted servicing and/or a free, annual oil change to their employees. Consider charging per employee on the plan (so they can add to their benefits package) or just offering it for free. to expose new customers to your business. Or, if you service any corporate clients (landscapers, contractors, home services, etc.), maybe extend the offer to your best clients in this category to allow their employees to get this benefit for their personal vehicles. You could work out a similar arrangement with any colleges or universities in the area.
If you take the time to set up a referrals program in a sustainable way, you’ll be rewarded with a higher ROI, and more new and repeat business. Consider setting up a formal process for handling and tracking your referral efforts, which will allow you to keep your finger to the pulse of your efforts and also help keep you on track!