Dealer Outlook

Trade Only Dealer Outlook Blog

Customer Retention is Highest Priority

Jim Collins, author of the best seller “Good to Great” recently said: “Great companies are distinguished by their relentless willingness to confront the brutal facts of reality.” 

So, what is the brutal reality, I found myself thinking? For the boat business it seems pretty clear. . . it’s very tough out there! At almost the same time, however, I also received an email from MarineMax promoting an upcoming event dubbed “Ladies First.” It’s a two-part program including the “Women On Water” clinic followed by The Yachting Gourmet cooking seminar. It’s scheduled this month for a Wednesday morning from 8 am to Noon.

The MarineMax promotion gave me the practical answer to the Collins statement, and it is this: The brutal reality is these are bad times. And it doesn’t matter whether you’re big like MarineMax or a small store in Iowa — the pain is the same right now. But, a “relentless willingness to confront it” is what MarineMax is evidencing, and it highlights an important consideration for all.

In times like these, the majority of businesses will hunker down and ride it out by cutting or reducing everything possible including customer retention programs. But, another brutal reality is that, today, the #1 priority of every dealer must be the retention of existing customers. Sure, it’s true all businesses always compete for new customers whether the economy is good or bad. But, while good times favor acquiring new customers to grow, bad times underscore the highest priority is customer retention. After all, it’s far easier to keep a customer than find a new one. It’s cheaper, too. For example, some customer research indicates it cost $19.00 to keep a current customer happy versus $118 to get a replacement. Moreover, there will never be a better sales prospect than a satisfied existing customer with whom there is an ongoing connection.

It’s also important to recognize that existing customers can give us growth of we pursue them. Here’s why: (1) Even in the worst economic downturn, retained customers will still be spending, likely about what they spent last year; (2) Some of those customers will still increase their spending; And (3) some customers will happily pay a premium for extra services or convenience if you give them a reason to!

I am not suggesting that some new customers could not be in the offing. Just as using events and programs to stay connected with existing customers should be a high goal, they can also be vehicles to grab some new customers. After all, in these times, if most of the other guys in your market area are hunkered down, increasing your market share could be up for grabs!

Former G.E. Chairman Jack Welch said it best: “Deal with the world as it is, not how you’d like it to be!” We’d all like good things to just happen. . . but in today’s world we must do things to make them happen.

Comments

4 comments on “Customer Retention is Highest Priority

  1. Wanda Kenton Smith

    Attaboy Norm! I just moderated the marketing panel discussion at the MRAA Convention and had three top marine dealerships who are all savvy marketers on deck and this was also their #1 Marketing Survival Strategy! I am perplexed why so few dealers seem to understand the critical importance of staying closely connected with their customers – those who have already invested in the dealership. In all times, and particularly in the tough market we’re all encountering when budgets are tight – the smart dealers recognize the value of a strong customer retention program.

  2. Jen Lamb, Sea Ray Owners Club Program Director

    I couldn’t agree more! Since 1996, Sea Ray has provided North American boat owners with a FREE loyalty rewards program which includes rebates for repeat buyers, an owners magazine, discounts on marine and non-marine related products and services, and boating events like AquaPalooza. MarineMax has done a fantastic job of seamlessly merging Sea Ray Owners Club programs into local events and activities. A happy customer is a good advertisement, but an ecstatic customer is a megaphone shouting your dealership’s success stories to everyone he meets. Sea Ray’s dedicated evangelists have proven it, helping us grow to become the second largest manufacturer-sponsored owner organization (second only to Harley-Davidson’s H.O.G. program) and buying another Sea Ray boat over 5,500 times.
    Click Owners Club at http://www.searay.com for more information.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.