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Building Customer Loyalty

Autosphere » Unclassified » Building Customer Loyalty
Storing off-season tires is an effective way to ensure customers return. Credit: Shutterstock

Attracting customers is one thing; holding on to them is quite another.

According to the Harvard Business Review, depending on the industry you’re in, acquiring a new customer can cost anywhere from five to 25 times more than retaining an existing customer. The Review also explains that increasing customer retention by a mere 5% can increase a company’s profits by 25% to 95%.

Like many things in business, customer retention is easier said than done, especially in the tire business where many consumers are simply shopping for the best deal available at the time. However, it’s not impossible to do.

“I feel like the average life cycle, when it comes to customers that are buying wheels and tires, is typically about five years,” says Robert Zylc, President of WheelWiz, a Canadian online tire and wheel retailer. “During the winter season, most of the business we get is from customers that are financing or leasing a vehicle, keeping it for four or five years, and they want to have a dedicated winter wheel and tire package. For those customers, I feel like it takes a little bit of time before we see them again.”

That said, Zylc explains that building trust with consumers is critical, and if you can prove yourself to be honest and reliable, then the chances of them coming back to you for future purchases increases.

“We have customers that have purchased, at this point, five or six orders from us, because they rotate cars more often, or they have more vehicles,” Zylc says. “After they’ve done business with us, and once they know that we’re reliable, they end up coming back to us because they had a very good experience.”

While some retailers like to pepper their customers with emails or printed flyers, Zylc notes that more isn’t always better. “We do send out newsletters and emails and that sort of thing, just to keep us top-of-mind when it comes to wheels and tires,” he explains, “but we don’t want to be too pushy about it, because we know that the set of tires or wheels that they bought for their new car is going to last them for quite some time.”

Trust and service

Billy Lau, President of Tires 23, a tire retailer in the Greater Toronto Area says that he has managed to build trust with his customers over the two decades that he’s been in business. “We have some really loyal customers,” he says, “to the point that they don’t even ask for a price, and just place their orders.”

That said, not all his customers are that loyal. “A majority of the customers still price-check everywhere,” he adds. “We are not the cheapest in town, but we are competitive.”

Trying to out-compete other tire retailers by offering the lowest price is not a great strategy, if you want to stay in business. “You cannot be the cheapest,” Lau adds. “There’s always someone cheaper out there.”

Quality service, on the other hand, is something Lau believes can make a difference, and can help build customer loyalty. “Customers don’t want to waste time,” he explains. “So, when they contact you for a quote, you should respond quickly with that quote. When they come in to have their tires installed, you should get them in and out as quickly as possible. No one wants to wait hours to get tires installed. We try to get them out in under an hour.”

In order to get customers in and out the door as quickly as possible, Lau says that retailers need to plan accordingly. Not only do you need enough staff on hand, especially during the changeover seasons, but you also need to have enough inventory in stock so that your customers aren’t waiting around for your next tire delivery.

With that in mind, Lau says he normally doesn’t take walk-in clients, especially during the busy seasons. “We normally go by appointment,” he explains, “but if I have a gap between customers, then we’ll try to fit in a walk-in customer.”

While booking the appointment, Lau’s team asks about the vehicle and the tires or wheels that will be needed. That way, the right tires, in the right size, are sure to be in stock when the customer arrives for this appointment.

Honesty

Colleen Hilton and Andrew Wallace, service advisors at OK Tire Cobourg, believe that honesty is key to customer retention. “We don’t do any jobs unless they’re really necessary,” Hilton says. “Some shops throw parts at vehicles, but we only replace parts or do a job if it’s needed.”

Treating a customer like an open wallet is the easiest way to assure that they won’t come back again. “There are a lot of recommended services, like brake flushes,” Wallace explains, “but we always explain to customers when a service is recommended, and when it’s absolutely necessary.”

Tire storage

One foolproof way to make sure customers come back is to keep their off-season tires in your possession. That’s why a growing number of tire retailers offer tire storage. “If you have their tires,” Hilton says, “they’re going to come back to you to change them over.”

In order to provide the highest level of customer service, quality shops take the time to inspect the tires they have in storage, and to give their customers ample warning that they might need a new set, next time they come in.

“When they come off the vehicle, we note whether they need to be replaced, or whether they are still good for another season,” Wallace says. “Closer to changeover season, we’ll contact our customers to let them know about the condition of their tires. If they need to be replaced, we’ll price out a few options and let them decide if they’d like to buy a set or not.”

This kind of advanced warning, Hilton notes, allows the shop to be prepared when the customer comes in for the changeover. “We already have a new set of tires waiting for them,” she adds, “so we’re not wasting their time, and we’re not asking them to wait until we can get something in for them.”

Wallace notes that a lot of new business comes from referrals, which is why a key component of customer retention is treating every customer well. “If they have a bad experience, they’ll tell 10 people, but if they have a good experience, they might tell one,” he concludes. “That’s especially true today with social media, which is why customer service is so important.”

Categories : Unclassified
Tags : OK Tire, Tires 23, WheelWiz

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