Cradle to Grave – What’s a Lifetime Customer Really Worth?
Hi, Bob Aldons from Car Business here. Car Business is a multi-dimensional car company involved in diverse areas of the automotive industry in Australia. Diversity allows us to cater to the needs of our customers, whether retail, dealer or wholesale.
We’re involved in the following:
- New Car Brokerage
- Quality Used Cars
- Vehicle Finance and Insurance
- Genuine Spare Parts for Jeep, Chrysler, Dodge, Fiat, Alfa Romeo, Isuzu Ute & Volkswagen
- Vehicle Protection Products such as paint and Interior protection, Electronic Rustproofing and Window Tint
- Local Area Marketing for Google My Business
- Training and Development for sales people, sales managers as well as service and parts managers.
- Articles on everything to do with the car business
Today’s article attempts to quantify the lifetime value of a retail car customer to the new car franchise and the salesperson. It’s called Cradle to Grave.
Let’s use a fictitious customer named Tom Wardlaw. Tom’s parents have been customers of a local dealer for a few years and today is the opportunity to buy their son Tom a car.
Tom and his parents come into the dealer to look at a used car. After a walk around the dealers used car lot, they settle on a car for Tom. The salesperson treats the family well, and soon Tom is driving off in his ‘new’ five-year-old car.
Scenario 1 Tom receives some phone calls from the salesperson enquiring on how the car is going. The salesperson calls Tom on his birthday and then again every six months or so making sure that everything is going well. He invites Tom back for service on his car and makes sure that a courtesy vehicle is offered to enable Tom to get to work.
Scenario 2 Tom is enjoying his car, but never hears from the salesperson again. In a few years, Tom decides it’s time to upgrade his old used car for a new one. Not having had any contact with the dealer or their salesperson, Tom isn’t loyal to the dealer and buys his new car from another new car dealer. He finances it, buys aftermarket products and a service plan. This dealer makes around $4000 on Tom’s deal
Scenario 1 Tom is very pleased with the contact from the dealer’s salesperson who continues to keep in touch with Tom every 6 months. Tom sends a number his friends to the Salesperson and earns a reward of $150 for each referral. On most occasions, Tom even accompanies his friends into the dealer and speaks very highly of the salesperson and the dealership.
On each occasion, the dealer makes around $3000 and Tom’s friends are treated exactly the same way by the salesperson.
Tom buys a new car from the salesman and the dealer makes around $3000 from Tom. During the years with the old used car and the new car, Tom returns to the service department and is looked after extremely well by the dealership. For each 5 years of ownership, the dealer makes around $1500 profit through the service department.
After only 5 years, Tom has contributed around $11000 to the dealership and has brought in another $20,000 in dealership profit through his friends. Tom’s value to the dealership? $31,000
And every five years from there, Tom buys another new car. Tom gets married at 30 and buys a new car for his partner. Dealership profit from this new sale runs out at $3000 too. So now Toms family’s contribution is $6000 every five years. And Tom continues to refer business to the dealership.
So over Tom’s lifetime at this dealer, (he contributes $11000 ever five years) he’s been a valued customer – his worth? How does $xxx, xxx sound?
And Tom and Kathy have 3 children, and of course, those three kids each buy a car from our salesperson. And they buy a new car every 5 years just like their mum and dad.
So let’s do the maths. Over his car buying lifetime, Tom (and later his wife) will contribute around $105,000 to the dealer. Tom (and later Kathy) send 3 customers to the dealer every year, so that’s worth another $660,000 in dealership profit. And Tom and Kathy’s children buy cars too, and that’s worth $50,000. So in his lifetime, Tom and his family have bought cars, taken finance, insurance, and aftercare products, had them serviced, and referred a lot of their friends to the dealer.
What’s the total value to the business? From the cradle to the grave Tom has contributed over $800,000 to this dealership.
Didn’t it make really looking after 17 year old Tom worthwhile?
What’s Car Business all about?
Car Business is a multi-dimensional automotive company that aims to help you to buy your new car for a better price than you can do on your own. Based on the Redcliffe Peninsula about 15 minutes from Brisbane Airport and 30 minutes from the Brisbane CBD, Car Business is located in an area that allows us to pick and choose from Brisbane’s finest new cars for sale.
The ‘go to’ Brisbane car buying agents, Car Business, is so much better than a car broker – first and foremost, Car Business is an experienced Car Buyer’s Advocacy service. Our experienced staff will stand alongside you and act on your behalf to help you buy your new car at a better price than you can directly through new car dealers.
My goal with Car Business is to provide timely and informative articles on everything to do with cars – used car purchase, new car sales, car service, car finance, car insurance, aftermarket car protection products.
Above anything else, Car Business is a company that provides current automotive advice for car owners who don’t have access to knowledgeable car industry friends. To those of you without someone to talk to, I’m your expert – the car guy.
I’ve been in the motor industry since 1978 – covering all aspects that consumers need advice on. I’ve been called a lot of things in my time – The Car Professor, The Car Doctor, and recently the Car Guy, but the bottom line are that I know a lot about this industry. Whenever someone needs some advice – they call me.
In general terms my car advice is free – it’s just something I like to do, and my goal is to give back to the community that has treated me so well.
Good quality, Guaranteed Used Cars
I have access to good quality vehicles – you can see my current stock by clicking through to http://www.carsales.cars my own website for the cars that I have in stock. I’m also able to search out that particular car that you’re finding difficult to find. I’ve got a great dealer community that I’ve dealt with for many years, and these cars don’t even hit the websites. I specialize in South East Queensland but in some cases, can look after interstate customers
Other areas that I specialize in are relatively widespread.
Genuine Spare Parts, Merchandise, and Other Cool Stuff
www.genuinespares.com.au is an online spare parts business specializing in Chrysler, Jeep, Dodge, Fiat, Alfa Romeo, Isuzu Ute and Volkswagen. SO if you’re looking for anything from crash parts, electrical components, wheels, t-shirts or anything else, let me assist you with that search. You can rely on genuine spares to procure parts at better than trade price and certainly better than you can buy in Australia. My prices are reduced by about 30% on what you’d expect to pay here in Australia
Car Business Protects Your Car
Don’t get ripped off by car dealers wanting to make a huge profit – our window tinting prices start from $175 up to $450 for cars that dealers want to charge $750 for.
Car Finance and Car Insurance
My finance and insurance franchise, 1800Approved Finance, will help you get finance for your car at rates much lower than a dealer will offer. For a homeowner, we’re talking from 4.99%. Your bank won’t even offer you that.
It’s My Opinion – Cars, Auto Industry
If you’re interested in reading quality information about new car releases, forthcoming models and just about anything else to do with the car business, click over to my blog – http://carbusiness.com.au/blog/
You’ll find wide-ranging comment about the car industry and car people. I don’t hold back on my comments – like it or not, my opinions are just that – opinions.
In closing, if you want to connect with me here’s how
Car Business and Bob Aldons Contact Info
Phone: International +61 418 748 498
Local 0418 748 498
Visit: 226 Anzac Avenue
Kippa-Ring Q 4021
In closing, my passion is cars, car buyers, car dealers, but just about anything to do with cars. But you need to do me 1 favour….
Please drive carefully
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