Feature January 1, 2003 by
Gordon Cameron and Ken Keis, Results Consulting Group Inc.
Marketing for Results: 0% Defection & 100% Retention: a 14-Step Model to Maximize Service Profitability and Potential Part Two
The 7 Steps of 0% Customer DefectionPart One, The 7 Steps to 100% Customer Retention, focused on processes and interaction with the customer.1. Create a Maintenance Schedule.2. Establish Point-of-Sale...
Part One, The 7 Steps to 100% Customer Retention, focused on processes and interaction with the customer.
1. Create a Maintenance Schedule.
2. Establish Point-of-Sale Materials.
3. Train Staff on Content.
4. Train Staff on the Sales Process.
5. Verify that Service Processes are Customer-Focused
6. Identify Customers’ Future Needs
7. Measure, Track, and Benchmark Performance.
7 Steps to 0% Customer Defection
Defection is the fall-off rate of customers who are no longer patronizing your business. Not only do most businesses have no idea what their defection rate is, they are unable to calculate it, especially given the restrictions of today’s operating systems. In our validated research, we established that the defection rate of customers is a startling 60%. If you choose to accept the challenge of accomplishing all 7 Steps, you will have a huge competitive advantage!
Define Your Customer
Before you can establish a defection rate, you must first define where and who your customers are.
Establish the parameters that define your customers. Use the most dominant postal codes from your current service records to establish your most likely service candidates-then focus your marketing strategy on them. All of you will have some business from transient and remote customers; they should not be included is these calculations.
Many managers talk about the 5,000 people they have in their database-but that’s 5,000 names, not 5,000 customers. Usually, less than 20% of the recorded database has any kind of recent activity.
When was that customer last seen in your shop? Set a time frame, then cease communicating with customers who haven’t been seen in X months or years. We suggest that any customer not seen for over 12 months should be moved to your defected column. These former customers will become part of the customer-recovery process you will develop in Step 6 below.
Create a Current Customer List
If you followed Step 1, you now have a current list with real customers. Warning: your nice new list will start to erode immediately unless you keep it current.
Develop Procedures to Continually Update and Purify Your Customer List
It’s expensive to keep communicating with customers who aren’t listening. With your management team, create the process to keep this list current.
Develop Follow-Through for the Customer-Return Process
The answers to these questions will help you plan a time-specific protocol.
1. When do I send the maintenance reminder?
2. How do I send it?
3. Who should send it?
4. If no appointment is booked, how long do I wait before I contact the customer again?
5. What then-do I send another letter, make a call? How many calls?
6. What do I say in the call?
7. If I don’t get an appointment, what’s the next step?
Develop Customer Follow-up Process
What happens if the customer needs:
time to pay for recommended repairs, or
a repair or maintenance item that comes outside the regular 5,000 to 6,000 KM service?
Your shop you should book a future appointment before the customer leaves. To flag potential follow-up customers, create an Op Code, which means repair recommended, not done. Set up a system to identify the follow-up customers, who is going to call them, when, and what that person will say to the customers.
Define Defection-Avoidance Protocols
The cost to get a new customer is five times the cost of keeping an old one, so go out of your way to keep your customers! Equip your team to win. Customers will defect. Before contacting customers who have defected, your staff should be thoroughly trained in your customer-recovery plan and policy statement. Unless you address their concerns, they won’t be back.
The last step in Part One, The 7 Steps to 100% Customer Retention, is reporting. That’s also the last step in Part Two, The 7 Steps of 0% Customer Defection. All factors and measurements mentioned in this article must be readily available to you. What you don’t know can hurt you.
How do you know you’re winning or losing if you aren’t keeping score? In calculating real numbers with our clients, we know that a shop with eight techs has, on average, a defection rate that amounts to $300,000 to $500,000 per year in lost business. Is that reason enough to get you started on your 0% Customer Defection Process?
About Results Consulting Group Inc.
Results is an international full-service business consulting company with special expertise and experience in the automotive industry.In the past five years alone, Results’ team of automotive professionals has trained more than 20,000 automotive personnel-and logged thousands of in-store consulting-project days, from independent operations to national and international chains. Senior Partners Ken Keis and Gordon Cameron have over 45 years of combined business-ownership experience and 15,000 hours of automotive consulting experience. The Results Performance Institute provides a full range of information products and services designed to increase your business and individual performance, including personal one-on-one coaching, in-store consulting, on- and off-site educational sessions, tele-conferences, videos, and audio solutions. Results also provides appointment-scheduling and dispatch software solutions-ServiceMate-specifically designed for the independent maintenance and repair sector. Shops wishing to start growing their service business immediately can now order ServiceMate(tm) software. Created for shops from 2 to 32 technicians, it almost pays for itself the first week you use it. Learn more about this easy-to-implement solution: Call 1-866-852-4347.
Results’ copyrighted service marketing and operational system, “0% Customer Defection & 100% Customer Retention,” has a proven track record of increasing service gross by 10-20% and beyond-in less than six months. For further information about Results and its automotive and business solutions, call us Toll Free at 1-866-852-4347, email firstname.lastname@example.org, or visit our Website at www.resultsconsultinggroup.com.