Are You Asking For The Referral?

Written by Kemp Evans | kempevans@m5ms.com  | 205-603-1996

One of the best and most often overlooked ways of growing one’s business is to ask your current customers if they would be willing to recommend your staff and dealership with their family and friends. The sales departments have been doing an exceptional job in this area for decades. Still, most service departments neglect this resource and either sit and wait for their business to come to them or rely on other less effective marketing strategies.

Word of mouth remains one of the most effective means of increasing one’s business. Think about it; the majority of people will not notice a commercial or advertisement unless there is something about it that grabs their attention. These same people are 75% more likely to take advice about who is a trusted provider of services from a trusted source. Turning your customers into advocates for your dealership is one of the best strategies for winning new customers at a relatively low cost.

Customer advocacy starts when the culture of your dealership is aligned with the wants and needs your customers expect to have met. What’s happening on the inside of an organization is felt on the outside by your customers.

Involving the people that have the most direct contact with customers is your best bet for creating a company culture that naturally generates referrals.

Today’s customers have continuous bombardment of advertisements for any products offered. Considering this, how much real impact does the typical email blast, newspaper ad, radio spot or even a television commercial have?

With the overabundance of choices a customer has for their vehicle needs and the overwhelming number of uncertain providers in today’s market, there is no wonder recommendations from a family member or friends are so valuable.

When performing an in-store consultation or just visiting a dealership as a customer, I am astonished at the lack of focus and the lack of respect for the customers’ time or just providing an exceptional customer experience. Common areas that tend to cause customer frustration and generally prevent your customers from recommending your dealership are:

  • Difficulty in scheduling an appointment
    • The telephones are not answered
    • Extended periods from the call to the actual in-dealership visit
    • The lack of appointments offered–e.g., appointments are not provided on all services
  • Neglect at the time of arrival
    • Not being greeted promptly
    • Dismissive treatment–e.g., lack of empathy for the customer’s concern
    • Overselling–e.g., hard selling or selling of non-factory recommended services
    • Not being offered appropriate transportation options
  • Long wait times for routine maintenance–e.g., the over 1-hour oil change
  • Not being kept informed of the status of the vehicle’s progress
  • Missing promise times
  • The condition of the vehicle when returned to the customer
  • Lack of a proper active delivery process
    • Not thanking the customer for their business
    • Not asking the customer if all their needs were met and if there was anything else that could have improved their visit in any way
    • Not reviewing the customer’s upcoming factory-recommended needs for their next service visit
    • Not setting the next appointment
  • No customer follow-up–e.g., why is it that most of our staff members are afraid to ask how the level of service they provided was?
    • They know the experience was not good
    • They’re fearful of the answer they may get
    • The staff just doesn’t care about what the customer experience is

I am sure everybody reading this article has tried newspaper ads, sponsored social media posts, pay-per-click ads, radio spots, and television advertisements with a dismal return on your investment. If you’re lucky, the marketing methods mentioned above may be increasing the visitors to your dealership and providing an increase in revenue. Even with an increase, there should always be the desire to improve and now you must ask yourself: how do I take my department/store to the next level of performance?

One critical component of any customer acquisition and retention strategy is providing a means for them to refer their family and friends to your business. Word of mouth remains one of the most potent agents of growth in the business world. Turning your customers into advocates for your brand is a proven long-term strategy for acquiring new consumers at a low cost. No matter how you enable and track referral activity, there’s a critical question to answer: how can you encourage customer referrals to shop your business?

Asking for the Referral

Timing is critical when it comes to asking for a referral from your customers. Therefore, you need to find the right moments in your customer’s journey when they are most likely to oblige you with a reference. If you ask your customers at the wrong time, you’ll be ignored (at best) or you’ll put them off (at worst).

You need to catch and engage your customers at the exact moments when they are feeling the most satisfied with the experience and your dealership. Then you can channel their satisfaction into a positive, memorable experience.

Customers who have given your dealership a high rating on an NPS (Net Promoter Score) survey have already demonstrated to you that they are willing to promote your dealership to family and friends. These customers represent an excellent opportunity for your dealership when looking for new customers.

Communicate with your loyal customers. Many of your loyal customers would be more than willing to recommend your dealership to their family and friends. Some may already be doing so without realizing you have a referral program in place.

Encourage Your Referred Customers to Become Referrers Themselves

It is a fact that customers who are introduced to your dealership via referral are more open to becoming referrers themselves if the service you provide them is exceptional. The marketing agency The Social Annex found in one of their surveys that referred customers are four times more likely to recommend customers to your business.

The customers that refer your dealership know the level of service you offer and do not have concerns regarding any reputational risk associated with their recommendation. Nobody wants to recommend a poor service provider.

Referred customers tend to be more loyal. According to a study from the University of Pennsylvania’s Wharton School of Business, customers who come from referrals have an average lifetime value that is 16% higher than non-referral customers.

Conclusion

By investing time, effort, and training into your dealership and creating an effective referral program, you will be able to reap the benefits of one of the lowest cost-per-acquisition marketing methods available to your business.

M5 Management Inc. specializes in this type of facilitation and training. If you are interested in more information regarding the information in this article, please contact me at (205)-603-1996 or kempevans@m5ms.com.

About the Author