Posted on Dec 13, 2021 by Smart Program

The Benefits of Customer Retention 

General

The Benefits of Customer Retention 

Attracting a new customer is a much more expensive proposition than retaining one you’ve already attracted. What’s more, that new customer will spend less than one that knows and trusts your company. Consider these research statistics:

On average, attracting a new customer costs five times as much as keeping an existing one, plus up to 30 times the marketing cost.
- Harvard Business Review 

Increasing customer retention rates by 5% increases profits by 25% to 95%. Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline.
- Bain & Company

The cost of marketing to an existing customer is approximately $7 compared to $34 marketing to a new customer.
- Boston Consulting Group

The probability of an existing customer buying a product or service is 60% to 70% while the probability of a new customer buying that product or service is 5% to 20%.
- Marketing Metrics

Long-term customers are half as sensitive to price increases as a new customer.
- John Dawes, Journal of Advertising Research

92% of consumers around the world say they trust earned media, such as recommendations from friends and family, above all other forms of advertising.
- Nielsen Global Trust in Advertising report

In auto sales, these statistics mean that there is more money saved on marketing expenses, and more money earned from retained customers that trust your recommendations. These mainstay clients will pay a premium to continue to do business with you, rather than move to a dealership they are unfamiliar with. They do this while bringing new customers to your doorstep through strong word-of-mouth referrals. 

How do you keep your current customers happy? 

There are two key strategies:

Coach your selling staff to be humans, not salespeople

Clients want accountability, transparency and vulnerability. Set realistic expectations, then exceed them. If you don’t meet the expectation, have a human conversation about it, admitting responsibility, then do everything in your power to overcome the hurdle. Be committed to improving the lives of others, communicating with the intention of brightening their day. Highlight them on social media, showcasing your healthy client relations. Create dialogues asking respected repeat customers their opinion on what you can do better. 

Sell value, not products

Offer products with high, measurable value, like SmartCare, to your customers. We have 45,000 customers using our wear and care program to keep their cars in factory condition. The vehicle’s worth stays high, our service to your customer is second to none, and that value is associated with your company. Smart Program provides a service that far exceeds expectations, giving your customers a product that is even better than they could have imagined. Use SmartProgram as a throw-in for new customers. They’ll realize its high value, and purchase it next time.

Shift resources towards programs that attract the richest mix of loyal customers. SmartProgram is just such a program. 

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