Competing for Customer Loyalty

By Bill Haas. Remember the days when you could open the doors of your shop in the morning and customers would drop off the keys to broken cars all day long? It wasn’t that long ago, but a lot has changed in a short time. Vehicles are built better, last longer and require less maintenance, and more businesses are offering automotive solutions to vehicle owners. Specifically, automobile manufacturers and dealerships are attempting to be a significant influence on when and where vehicle owners have service performed.

Historically, independent automotive repair shops have provided a superior level of customer service when compared to new car dealers, franchises and mass merchandisers. This outstanding customer service led to the establishment of a loyal customer base. Many shops are finding that while vehicle technology is evolving, so are their clients. Today, shops must do more than open in the morning and wait for customers to drop off their car keys. Because most auto shop owners are former mechanics/technicians, it can be difficult to spend the time to understand the market and develop strategies to position a business as the best choice for providing automotive service and repair.

The future of the independent shop will be predicated on the shop owner’s ability to put down the wrenches and get “in tune” to the business side of the business. The survival of many independent automotive shops will depend on their ability to find adequate resources, analyze demographic and customer need information, and implement effective and consistent communications to consumers. With a true understanding of what is taking place in the local market and the universe of the auto industry, independent shops will survive.

Customer loyalty has been taken for granted for too long. Look at the benefits of loyal customers: they create positive word of mouth advertising for your business, they refer others to do business with you and they will fight not to switch to a competitor. You should also consider the economics of customer loyalty. It costs 10 times more to attract a new customer to your business than it costs to retain a customer. The Harvard Business School says a relatively small increase in customer loyalty results in a sizeable increase in profitability.

So look at it this way. If customers are leaving your business, it is not because of what the competition is offering. It is a result of what you are not doing. Now is the time to understand customer loyalty and watch your business prosper.