A Free Marketing Strategy That Could Double Your Business?
Posted September 6, 2011 by adminThe worst number in marketing is one, and that’s because there’s no one single advertising magic bullet that will flood your showroom with red hot leads ready to buy day after day. Different people have different preferred methods of communication and therefore react differently to the constant influx of varied media continually coming their way. This is why diversity equals stability in the world of marketing and you’d better be ‘fishing with multiple poles in the water if you plan to maximize your monthly marketing budget to catch lots of fish.
With that said, there ARE cost effective methods for marketing your dealership that are quite kind on your ad budget and get incredible measurable results. Here’s something to consider.
The quickest way to double your business would be to have every customer in your data base refer you one new customer. Although referral systems as a marketing strategy are often over looked and not taken seriously they can actually be one of the most powerful new customer acquisition methods in your entire marketing tool box. A recent MIC motorcycle and ATV owner’s survey cited ‘the influence of friends and family’ to be the 3rd most important factor in a riders decision to purchase a specific model behind test rides and visits to the dealership. Considering that the influence of friends and family rank this high in the buyers decision to purchase, it makes sense to take a serious look at how you can create a referral culture in your dealership with a structured program integrated into your marketing mix. Furthermore, most don’t realize that only 3% of the American population own a motorcycle, thus taking a targeted approach to find these people can be like trying to find a needle in a hay stack. Most riders have friends and family that ride, therefore can be great resources to connect with more targeted prospects.
Another compelling reason to focus on referrals is the closing ratio and gross margin are proven to be significantly higher than ice cold walk in visitors. This is because referrals come in the door with an associated level of trust. If my friend trusts this dealer, and I trust my friend, then I too will trust this dealer. And of course, people buy from people they trust.
One guy who’s very familiar with using referrals as his primary marketing method is Joe Girard? Joe became the Guinness Book of World records world’s greatest Salesman selling 13,001 new cars and trucks at retail during his 15 year selling career, a record that still stands today. Joe was a true professional at getting referrals from every customer! Joe’s theory is that if the average person knows 52 people who will show up for their wedding or funeral, then they must know at least one in the market for a new car.
So why don’t more dealers have structured referral system? Many dealers have an underlying belief that satisfaction equals referrals. In other words, if I do a good job, my customers will send me business. However, high CSI scores typically aren’t enough to get customers to refer as it’s natural for people to have a reluctance to refer for fear that the person they refer could have a bad experience therefore making them look bad. Others Dealers are skeptical because they have never been exposed to hard data such as the MIC owner’s survey which validates the need for such as system. And of course, many, if not the majority of dealers have just never been taught how to create and execute a referral system that gets measurable results and really works.
The first and perhaps most important referral strategy to is incorporate incentives. No bait, not bite. If your customers are to get over the natural reluctance to refer they need a little extra enticement like a free t-shirt or $10.00 gift card to spend as they wish when they refer a friend or family member. Money is the most powerful behavioral modification tool on the planet and it’s amazing what people with do for something FREE! The use of premiums and incentives isn’t just for the person providing the referral. It also has to be for the person receiving the referral as well so they’ll take action and come to the store.
Other critical elements of your referral system are the timing in which you go for a referral. The law of reciprocation is simply that natural desire to do things for people that do things for us. The best time to ask for a referral is right after a customer does business with you. This can be done face to face, with email, telephone or snail mail. To create a solid referral culture that will get massive results you implement all of the above and the premium is a great way to quantify your results.
Another popular referral strategy to implement is during open house type events. When marketing your event to your house list, you can offer and incentive such as 10% off, and for those who bring a friend you can both get 15% off. If you look at the lifetime value of each of your customers you’ll find that a little extra discount or a FREE t-shirt is a worthy investment to acquire a new customer and far cheaper than acquiring them with mass media.
While creating a structured referral system isn’t a magic bullet, it is a viable marketing medium that can generate an exponential ROI.
