For an auto repair shop to thrive in today’s challenging market conditions, you need to do everything you can to turn one-time customers into regulars. This blog outlines some practical tactics to make loyal customers of your first-time visitors and explores why increasing retention matters so much in terms of revenue and future success.
Understanding the costs of new vs. returning auto repair shop customers
To understand the value of returning customers, it helps to first have a clear idea of what it costs your auto repair shop to acquire each new customer. This metric is called the customer acquisition cost, or CAC.
CAC takes into account a number of costs associated with acquiring new customers, including the direct and indirect costs of your shop’s sales and marketing activities. To determine your shop’s profitability, it’s a good idea to have at least a ballpark idea of your CAC! Your CAC calculation should include costs like:
- Ad spend (online and through traditional channels)
- Marketing software fees
- Agency fees (if you work with a marketing agency)
- Creative costs, like those from graphic design
- Publishing and PR costs
- Production costs (videographer fees or production equipment)
- Inventory costs for brochures, magnets, stickers, etc.
There are a number of resources online that you can use to discover your average CAC, including this in-depth blog from Shopify.
Reviewing your CAC can often serve as a reminder that attracting new customers is costly! In fact, it can cost 5-25x as much to acquire a new customer vs. retaining an existing one (Bain & Company). For this reason, while you should always be working to attract new customers, it makes a lot of sense to focus your attention on retaining and growing existing customers as well.
Here are a few more reasons why converting first-time customers into regulars is essential for the growth and profitability of your auto repair business.
What can loyal customers do for your auto repair shop business?
- Increase profitability – Happy customers return repeatedly and make up most of the profit for small and mid–sized enterprises like yours.
- Decrease costs – Customer retention is much less costly than customer acquisition, as you’ve seen above.
- Increase ARO – There’s an interesting phenomenon in business that customer’s orders increase in value as they become more comfortable with your work. In auto repair, this means that a simple oil change can open the gates to more complex and lucrative orders later on.
- Become brand ambassadors and fans – In auto service, trust is paramount, and customer reviews are essential. Your return customers aren’t just a source of revenue; their willingness to talk about you to others is gold dust as well.
Practical tips for building customer loyalty and increasing return visits
Encouraging customers to become regulars is a matter of understanding their needs and concerns, and highlighting how your shop can help. To maximize profitability, you need to ensure that first-time customers have a great experience with your shop, and that returning customers have a similar experience every time they visit.
After all, the job of winning customers is never done. In fact, 61% of customers say that they would shift to a competitor after only one bad experience, and six out of ten suggest they will share bad experiences with others (Salesforce). To maximize customer retention and shop reputation, you need to make every interaction a positive one.
Customers will return to your shop time and time again if you focus on three critical factors at each appointment – convenience, community, and trust. To make sure you meet their needs, consider the following questions:
- Were customers able to request an appointment online, 24/7?
- Was the repair completed when you said it would be?
- Was your estimate comprehensive and accurate?
- Did you communicate with the customer through their preferred channels?
- Did you pre-book their next appointment and send a reminder?
- Do you incentivize doing business with your shop with loyalty points or cards?
- Do you offer educational events for your regulars?
- Is your shop known for philanthropy in your community?
- Do you participate in marketing and social media to create ties with existing customers?
- Are your estimates comprehensive and easy to understand?
- Do your customers feel heard when they discuss a problem with you?
- Are you following up after appointments to ensure all is well, and to secure an online review?
- Do you help customers determine immediate needs and plan for deferred maintenance?
How auto shop management software can help you encourage return visits
Your auto shop customers value convenience, transparency, and expert support. Auto shop management software like R.O. Writer has an assortment of features that help you offer those benefits, making it a smart first step in your customer retention strategy.
Here are a few of the key capabilities of auto shop management software which can improve the customer experience, and help you keep customers coming back:
Service Writing Tools – make service writing quick, accurate, and comprehensive every time.
Workflow Management Tools – connect managers, service writers, and technicians to optimize customer intake for an efficient customer experience.
NEW! Online Appointment Booking – allow customers to request an appointment at their convenience, 24/7, through your website.
Text and Email Capabilities – allow you to reach customers through their preferred channels with just a click. You can include status updates, videos, pictures, estimates, and more.
Digital Vehicle Inspection – make it simple to text inspection findings and recommendations alongside pictures and videos directly to your customers, improving customer experience and building trust.