The value of customer referrals is underestimated by automotive commission salespeople and owners.
Some car sales people feel asking a customer for a referral is beneath them. Others believe that if the customer is happy with them, the customer, on their own initiative, will refer people.
What is scary is the number of automotive commission sales people who simply see no value in customer referrals. They know they should ask. But do n0t bother to.
Numbers Tell the Story
Here is something interesting.
Research from Texas Tech University indicates 83% of satisfied customers are willing to refer others. But only 29% do.
As a commission salesperson, you have to ask yourself what happened to the other 54%? Why did they not send leads your way?
As an owner or sales manager, if 83% of your customer base is willing to refer others to your Dealership but only 29% do, what is that costing you?
Value of Customer Referrals
Referrals are the cheapest way to get more sales. And, customer referrals are the most effective means of selling more cars.
Cheapest because it involves little cost. A bird dog fee is much less than an ad in the local paper.
Customer referrals are the most effective way to sell more. In a November 2016 Forbes article, a statistic from Nielsen Research stated people are four times more likely to buy when referred by a friend.
People are four times more likely to buy when referred by a friend.
As an automotive salesperson you might not be too worried about the cost of advertising. Your Dealer takes care of that.
What would happen if the advertising budget was cut back? Where would you be then?
More Gold From Referrals
What is the value of customer referrals? For automotive commission salespeople, referrals are gold.
As an in-the-trenches belly-to-belly automotive sales consultant, I used to cold call people who advertise their vehicle for sale in the classifieds. I also called on purchased leads. Lots of calling. Lots of NO’s!
Here is another gold nugget from customer referrals.
You are six times more likely to close a referred lead than close that classified or purchased lead.
And there is even more good news about referrals. Referrals are a win for your Dealership.
That same Forbes article stated that “…referred customers are more loyal and have a 16% higher lifetime value.” Translation, they will spend more over the long term at your Dealership. Happy owner. Happy sales manager. Happy automotive sales consultant.
How to Get More Referrals
How do you get more referrals?
You need a process. And you need to purposely focus on creating a network of referral partners.
I can help you with that.
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Remember: Nothing happens until someone sells something.
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