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Are our customers free agents?

Customer loyalty . . . two of the sweetest words in retail. But, is it really still out there or are we now in a time when everyone has become a free agent?

“Watch out for the free agent,” I heard marketing consultant John R. Graham exclaim in a seminar several years ago. It obviously stuck with me a long time. Then, Graham (President of Graham Communications) added: “Free agentry has replaced customer loyalty!”

What brought that speech to mind again was a conversation with another boater at the marina last weekend. We have the same outboards. He was telling me his needed service. “Who’s your dealer,” I asked. “No, I don’t use them,” he said, “I call this service guy to come down.”

Now I was curious. I asked who was his dealer. Of course, I could have guessed it by the brand of boat and I would have been right. I also know the dealer is still in business in the area. So I had to ask the big question: “Why don’t you use your dealer?” His answer: “This guy’s cheaper and faster.”  Bingo – my mind flashed back to Graham’s words.

Clearly this boater fit the “free agent” mold. No loyalty for any good past performance by the dealer. Just like in professional sports today — go where the bucks are or, in this case, where they’re less.

It made me think about two things worth consideration. First, since price and speed were the reasons he gave for not calling his dealer, perhaps the dealer should think about regular direct mail or e-mail promotions to all existing customers offering, in this case, a speedy service pledge accompanied by a discount coupon(s) for maintenance services. Frankly, I often get oil change and tune up coupons from my car dealer that serve as a reminder and I regularly use them.

Second, if even just a small number of a dealer’s existing customers are likely free agents, it becomes mandatory for the dealer to seek out new prospects to replace those lost because of no loyalty. That’s not easy with today’s gutted promotional budgets. Still, there are ways to promote through the Internet and local publicity efforts that will pay off.

Perhaps the clearest way will be the coming winter boat shows. They stand out as the single most cost-effective route to finding new prospects, whether for boats or services. And, at the shows there’ll be opportunities to get someone else’s free agents!

In any case, these days, keeping existing customers from ever becoming free agents is gold, and worth the supreme effort.

Comments

12 comments on “Are our customers free agents?

  1. Wanda Kenton Smith

    Norm, your blog title caught my attention immediately. If I have one major concern and recommendation for marine retailers, it is always this — take care of your customers. And that means staying connected! I am amazed at how often our dealers take the “one night stand”mentality to their sales, forgetting the customer as soon as the sale is transacted as they move on to new prospects. My upcoming column in STO addresses this critical customer service NEED. While we always have to be looking for new sales opportunities, we all need to revisit what strategies we have in place to build and foster customer loyalty. Ongoing communications in all of its many executions top the list, in my opinion. There are way too many companies vying for our customers and if we fail to communicate with them and give them reason to come back, we can’t be upset when they go elsewhere for future sales and service. A great blog and tremendous message. I hope your readers will take this seriously. It can make a huge difference in their repeat sales successes.

  2. Matt

    I agree that keeping existing customers from becoming free agents is worth the effort. BUT…I frequently see customers pass up doing business with a reputable dealer that offers good service because someone a few hours away has a similar boat for less money. It has been my experience that a quality dealer is worth about $500 on a purchase. Anything more than that, the customer will forget about the service and make the drive to save a few bucks. Even the customers who love your service department will become “free agents” when it comes time for their next boat purchase. Then when they have a problem they come back to your service department and can’t understand why you’re not there to welcome them with loving arms! We all have our group of loyal customers that will buy from our dealerships because they appreciate what we do, but I think we would all be shocked at the percentage of our loyal cusomters that become free agents when considering their next boat purchase.

  3. JLI

    Loyalty & Free Agency is an issue for everyone, not just boat dealers. We’re a stand-alone retailer, no boat or motor sales, and about 80% of our customer base won’t even think of going anywhere else because we’ve built relationships with them. We have the best prices, but we also have the service and selection (or fast availability if not in stock). We share our knowledge with the customers to make sure they’re getting the right thing, sometimes even suggesting a less expensive item than what they thought they needed. This kind of service makes it a package deal for them, and they are very loyal to us. But the other 20% always go to West Marine first, then visit our store to check prices. We know because they say, “I was just over at West and your price is better,” so we still get that business. But no matter how much better our knowledge, helpfulness, and selection, this group is still shopping price, even after they’ve seen that our prices are better. They’ll take advantage of our knowledge and customer service, but they don’t want to miss that 1% chance that they could have gotten it for less somewhere else. Welcome to the “new economy.”

  4. Capt. Chris

    Price is only an issue when there is a perceived lack of value. If you operate your business according to the golden rule of do unto others………. you’ll be far better off in the long run. It is far less expensive to retain an existing customer than to acquire a new one. It has always been my experience that if you do good, you will do well. The problem is that the payoff doesn’t always come quickly and people lose their resolve. We unfortunately live in a society where “a minute in the micowave” is too long.

  5. Larry

    I’ve been in the sales end both new, used & brokerage in the Michigan /Ohio area for almost 30 years. I’ve always prided myself in putting my “client first”. Things have truly changed. Blame it on the Internet. People today are interested in price, price, price! It’s changed soo much in the last couple of years I’m seriously looking at other options. It really dosen’t matter what the business is. Shure I want to make a “buck”. I want to go back to the “old days” when you had peoples trust. I’m used to holding a customers hand before, during and after the sale. By in large, today, they really don’t care. It’s very sad. I’ve allways loved this business and the relationships that it used to build. You have a problem? Call me at three in the morning. I’ll come help you out. Today that counts, in most cases for nothing. All that matters is price. I’m very sad to see what has happened to the boating business that I’ve “loved” for soo many years.

  6. Capt. Charlie

    It would be great if loyalty was as strong as it used to be. In todays market, the majority of consumers refuse to pay a premium and will choose price over loyalty. The reality is, you have to offer great service at competitive rates and, if your lucky, retain 50% of your customers.

  7. Kyle

    I’ve sat here and read thru all the comments regarding the issue at hand, and it seems that everyone blames the consumer. For the past several years there has been a new breed of boater. maybe the get out and boat campaign really worked well. Boating has changed from the well off, to the person who goes out and gets a 15 yr loan full well knowing that they can just make the payment and not even think about the service side of owning and operating a boat. I think every marine owner should take a hard look at all sides of their business, sales, service, and customer satisfaction areas. As you look for more areas to sell your boats , you have to look at,is this the best way for all of my services to get out to the consumer and educate them on all aspects of the boating process.

  8. rog

    The problem isn’t really the lack of customer loyalty, it’s a lack of understanding by dealers. It used to be the dealer was considered by the customer to be knowledgeable and, in effect, an expert in boating matters. Whether the dealer was an expert or not was not the issue. He was perceived as such. Then came the internet and the buyer had access to a lot of information and became aware of how little his dealer really knows. Dealers don’t keep up any more and many of them use a computer only to keep track of parts and inventory. As an example, most dealers selling inflatables think hypalon is a fabric and I’ve heard them telling prospective buyers that at boat show all across North America.
    The same situation applies to sellers of larger yachts. They simply don’t know the details on the boat tied up to their own dock. With that kind of performance why should anyone be surprised when a customer goes somewhere else with his money.
    And for dealers to say the thing causing the buyer to go elsewhere is only price is simply an excuse. The main reason is that a prospective purchaser has lost confidence in the dealer. And the dealer has generally earned that.

  9. Ned

    This discussion is fairly simple. If we exepect or desire customer loyaty we must provide good service at a fair price in a timely manner.

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