Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Fri Jan 25, 2008 6:02 pm Post subject: The Few, The Many and Suggestions To Keep Your Shop Busy
Most shops have many repeat clients. These are the folks that continue to frequent the business, time and again. There might be any number of reasons why. The shop might be convenient for them. Some people dislike change and simply continue to return to the same places. Of course there are also those that really like the service.
Repeat clients are great and the backbone of any business. They are normally easy to deal with, because they trust us. They are far more likely to accept what we say, because of past experience. Having too high a percentage can also indicate a problem.
This may at first seem a contradictory statement. If repeat clients are great, how can having a large percentage be bad? The large number of repeat clients is not bad, the small number of new clients is the problem. Why is the business not generating more new clients? Each happy repeat client knows many other people. People who might also use our services. As such, each is a source of referral. Why then is this not producing more new clients?
I feel the answer lies in the ease with which our services are accessed by new clients. Inadvertently all businesses create “hoops” through which clients must pass to get service. The more “hoops” and the harder they are to pass, the fewer new clients the business gains. Our repeat clients are those that have learned and/or agree with our “hoops.” They do not find them an obstacle, but a new client might. Not all new clients, but can we afford to loose any, needlessly?
No business sets out to establish obstacles to their service. Just like the “road to hell” is paved with good intentions, so the obstacles set by a business. Obstacles can be as blatant as a “No Checks” sign or as subtle as a gruff telephone presence. They can also be very difficult for those in the business to spot. For instance asking present clients may be useless. More useful is asking those who are not clients, though hardly practical. Instead a business must step back and examine its policies and the way clients access the business.
Many policies are geared toward preventing the “seldom occurrence.” Trying to prevent the few, often times prevents the many from using us at all. The few that will take advantage likely will anyway. I have learned the hard way, it better to consider this a cost of business and concentrate on providing stellar service to the many. How many policies in your company are geared toward preventing the few, at the expense of the many?
Joined: 04 Sep 2007 Posts: 47 Location: Grand Rapids, MI, USA
Posted: Sun Jan 27, 2008 11:03 am Post subject: Re: The Few, The Many and Suggestions To Keep Your Shop Busy
louis wrote:
Most shops have many repeat clients. These are the folks that continue to frequent the business, time and again. There might be any number of reasons why. The shop might be convenient for them. Some people dislike change and simply continue to return to the same places. Of course there are also those that really like the service.
Repeat clients are great and the backbone of any business. They are normally easy to deal with, because they trust us. They are far more likely to accept what we say, because of past experience. Having too high a percentage can also indicate a problem.
This may at first seem a contradictory statement. If repeat clients are great, how can having a large percentage be bad? The large number of repeat clients is not bad, the small number of new clients is the problem. Why is the business not generating more new clients? Each happy repeat client knows many other people. People who might also use our services. As such, each is a source of referral. Why then is this not producing more new clients?
I feel the answer lies in the ease with which our services are accessed by new clients. Inadvertently all businesses create “hoops” through which clients must pass to get service. The more “hoops” and the harder they are to pass, the fewer new clients the business gains. Our repeat clients are those that have learned and/or agree with our “hoops.” They do not find them an obstacle, but a new client might. Not all new clients, but can we afford to loose any, needlessly?
No business sets out to establish obstacles to their service. Just like the “road to hell” is paved with good intentions, so the obstacles set by a business. Obstacles can be as blatant as a “No Checks” sign or as subtle as a gruff telephone presence. They can also be very difficult for those in the business to spot. For instance asking present clients may be useless. More useful is asking those who are not clients, though hardly practical. Instead a business must step back and examine its policies and the way clients access the business.
Many policies are geared toward preventing the “seldom occurrence.” Trying to prevent the few, often times prevents the many from using us at all. The few that will take advantage likely will anyway. I have learned the hard way, it better to consider this a cost of business and concentrate on providing stellar service to the many. How many policies in your company are geared toward preventing the few, at the expense of the many?
Louis:
You hit on two huge issues here.
#1: New customers. In our new Key Numbers class we recommend that 20-25% of all RO's should be new customers. This is what the better shops do. Many do less which predicts a bleak future. Even worse, many shops have no clue what their percentage is!
#2: Hoops. Most shops are way too customer unfriendly. Yes, you will get bit once in a while by not always enforcing certain strict policies, but it is also likely that you will lose far more by enforcing them to an extreme degree.
_________________ Tom Ham
AutomotiveManagementNetwork.com - Hams Management Systems
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sun Jan 27, 2008 5:27 pm Post subject: Re: The Few, The Many and Suggestions To Keep Your Shop Busy
Hi Tom,
Tom Ham wrote:
Louis:
You hit on two huge issues here.
#1: New customers. In our new Key Numbers class we recommend that 20-25% of all RO's should be new customers. This is what the better shops do. Many do less which predicts a bleak future. Even worse, many shops have no clue what their percentage is!
I try to be very cautious with ratios. I think new clients are important for any business to grow and a lack of new clients can represent a problem, particularly if the shop is slow. I am not certain a specific percentage might be suggested that represents a correct mix.
A number of circumstances might interact. For instance a vehicle specific-shop, offering full service may see far fewer new clients than a service-specific shop, offering large dollar service. A shop in a small town, with fiercely loyal clientele may be another exception.
When a shop is not meeting its aim, as to sales, the ratio of new to repeat clients could offer insight. If the shop is meeting or exceeding its aims, I think a specific ratio would be more a non-factor. Effectively working to improve and make service easier to access, should increase referrals and the number of new clients, at lower cost than most things I know. Thanks Tom, I appreciate your input.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sun Jan 27, 2008 10:02 pm Post subject:
I had never considered the new customer side of the equation as very important.. I am starting to learn that a business needs new clients. We loose a certain amount of clients due to natural causes, some die and some move away. These need to be replaced just to maintain the status quo.
The first few times a customer comes in will probably be where they spend the most money. This is because the shop is getting the vehicle into shape. After that the repairs should drop off as the vehicle moves into a maintenance phase. As the shop becomes more efficient at its work, more vehicles are needed just to fill the time slots.
Then if a business wants to grow, still more new people are needed. We do not want to forsake the old clients for the new, both are important.[/b]
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Mon Jan 28, 2008 11:35 am Post subject:
Hi Dave,
Dave wrote:
I had never considered the new customer side of the equation as very important.. I am starting to learn that a business needs new clients. We loose a certain amount of clients due to natural causes, some die and some move away. These need to be replaced just to maintain the status quo.
I don't think it's something to worry unduly about, but very few new clients is as bad as almost all new clients. Either condition can indicate a problem.
I see almost any ratio that is skewed excessively to either side as an area needing more investigation. Not always a problem, but something worth looking at.
One thing to consider: If you were selling seats in a class, it would be easier to sell 'key concrete numbers' than '14 abstract points.'
Not to be too hard on Tom, but I'd bet he's seen many management seminars advertised like that, promising simple, concrete solutions. I have. So he is only following what he's seen.
We all do what we know, until proven there is a better way.
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