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Picture a bucket, and visualize each one of your department transactions as pouring money into that bucket. If you’re like most dealers, you spend countless hours trying to figure out ways to get more money into the bucket. But the reality is, many dealers are so focused on how many units they’ve sold this month, that they fail to look inside the bucket and see just how many holes there are, and how many dollars are seeping out the bottom of the bucket.

Many moons ago, I had a hole in my bucket that was nearly as big as the whole damn bottom of the bucket. We owned a multi-line metric store and our PWC OEM had a recall on its most popular engine requiring a short block replacement, and a return of the core. There were a lot of these units out in the market and we were replacing engines left and right. Before I knew it, our warranty receivables on this one job had climbed to well over $25,000. Turns out, we weren’t sending back the cores, they were mysteriously disappearing out the back door and we ended up eating a big portion of that 25k. That one left a mark.

Obviously, there are many other places in the dealership that can spring a leak too, like obsolete P&A, and parts returns to vendors missing deadlines and losing eligibility, ancient and over appraised used inventory, abandoned service units, contracts in transit, and on and on. These are all tough best practices to master, but they are at least on the radar of most good operators. 

But there are some other holes in the bucket, that even the best operators can overlook. One of the most common we see here at PSM is not capturing customer or prospect’s name, physical address, and email address. In analyzing over 800 dealer data bases the average dealer has 43% with missing or inaccurate physical mailing address, meaning they only capture this information 57% of the time. Email is only captured 25% of the time, leaving a 75% shortfall, and on average the phone number is only accurately captured 56% of the time. 

When you invest in your facility and advertising you’re not just paying for the customers who buy from you, you’re paying for every walk in, phone up, and web lead regardless of whether they buy or not. As I’ve said in this newsletter a hundred times, your customer data base is your number one asset, and the key to consistent predictable growth is growing your data base month after month. It’s simple math, if you increase the size of your list and keep your conversion ratio and value per customer the same (which you can increase if you keep reading), you’ll achieve annual growth. 

The other often over looked hole in the bucket which builds off of the lack of customer informat

ion captured, is the lack of follow up with both sold and unsold leads. For easy math let’s say your annual monthly expenses are $100,000, and that generates a total of 500 sales opportunities that month (phone, walk-in and web).  This means that you paid $200 dollars for each sales opportunity. Now, let’s say that you made some type of sale in parts, service, or sales to half or 250 of those opportunities.

That leaves 250 leads that you didn’t sell to. If you do zero follow up with those 250 leads multiplied by the $200 you invested in each, you’re wasting $50,000 in opportunities. 

But let’s shift back to the 250 that you did sell to. Do you think that if you sent them a thanks for your business email after purchase, dropped them in an automated nurture email sequence including a Happy Birthday and Happy Anniversary message that you could increase retention? What if you invited them monthly down to a fun event at the dealership with free food, drinks, and door prizes, do you think you might increase the annual amount they spend per year? You bet you could.

Now back to the 250 leads that you didn’t sell anything to. Do you think if you captured their contact information and followed up by phone 

providing some new compelling information, that you may be able to get a few more of them to convert into sales? What if you add them to your master data base and also invite them monthly down to a party at the dealership? Do you think you might convert a few more of those $50 prospects into customers? You bet you could. 

When you plug these two hard to see holes in the bucket and capture customer contact information, and follow up with consistent relationship driven marketing to your entire database, you not only increase retention and grow new market share, you also boost referrals as well as re-activate lost customers. 

I’m not saying that plugging all these holes is easy, nothing worth having ever is, but thanks to marketing automation technology it’s much more scalable and less people dependent than ever before. 

To learn more contact us at 877-242-4472. 

Happy Spring!!