If you want to learn from success, you’d be hard-pressed to find a more successful company than Amazon. Founded in 1994, it’s one of the world’s largest companies and made founder Jeff Bezos the wealthiest person in the world.
What can dealerships learn from Amazon? It’s not the common issues of pricing, selection and operational excellence. Rather, the core of their success is in what they call an “obsession” with their customers. Amazon’s Leadership Principles begin with the customer: “Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.”
That’s an excellent question to ask yourself and your team: Are you obsessing over your customers, or are you obsessing over your competitors?
What does Amazon’s obsession with its customers look like? It begins with data and is based not just on meeting customer needs but also anticipating and meeting needs before the customer even knows they exist.
When you first show up at their site, Amazon creates a profile of you and your activity. Every time you touch them, they learn more about what you’re likely to buy, how you shop and when you’re most likely to make a purchase. The data they collect includes things like time on site, duration of views, shopping cart activity and wish lists. That’s combined with real-world data to form as comprehensive a “get to know you” as possible.
Amazon combines its understanding of the customer with predictive technology to create an anticipatory environment that constantly works to address their customers’ needs – before the customer even goes looking for a solution. It combines a personalized recommendation engine with price optimization and makes the transaction simple and seamless with one-click ordering, making the customer experience effortless.
By meeting its customers’ personalized needs, rather than simply trying to sell to them, Amazon creates a deep and abiding relationship with its customers that have them coming back for more. Amazon customers today are willing to turn to the company not just for the books and music that formed the core of its early offerings, but for virtually every product available under the sun.
Amazon makes these massive investments in serving its customers because they know it costs seven times as much to acquire a new customer as it does to maintain an existing one. That’s true for your dealership, too, so it’s important to ask yourself if you’re emulating Amazon in your obsession with your existing customers or whether you’re following the model of the competitors they’ve crushed along the way.
You can either be the Amazon of your market, or you can be Barnes & Noble. The difference is in whether or not you build relationships with your customers that meet their needs.
Since Amazon is primarily known for e-commerce, it’s easy to mistake being “good at digital” with following in their footsteps. But this is exactly the wrong lesson to learn. In the dealership world, Internet sales departments average about a 15 percent closing rate.
Compare that with retention departments – the place in a dealership where the true customer obsession lessons of Amazon come into play – and their roughly 60 percent sales closing rates.
How do retention departments accomplish this kind of success? According to Amazon’s principles, they start with the customer and work backwards. They earn and keep customer trust. No two customers are the same, and well-run retention departments start with data but translate that into the proper message at the proper time that meets a customer’s specific needs. This means not only person-to-person interactions – four-fifths of U.S. consumers want more personal interactions – but broadening beyond just one channel into a multi-channel strategy.
Consider what a retention department that was obsessed with your customers could tell your sales team about someone who’s already done business with your dealership once. Is their family growing? Are kids getting to the age where they’re moving from car seats to hauling around sports equipment? Are those kids getting to the age where they might be in the market for a first car? Going off to college? Starting a job where they need reliable transportation? Beginning with a simple data point – do they have kids, and how old are they? – a retention department has literally decades of life event data that could have implications for new and used car sales and service that will strengthen your customer retention program and improve your customer experience – and ultimately, profit.
Any one of these touchpoints has the ability to put your dealership in a position to meet that customer’s needs, potentially even before they realize that need exists. That can keep a customer from ever starting a consumer decision journey, replacing a sales process with a customer service experience and leaving your competitors out of a competition they never even knew was underway.
That’s what Amazon’s true lesson is for dealerships: You can obsess over your customers, or somebody else will. What will your strategy be?
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