The Other ACV
Here’s a metric you may have never analyzed in a 20 group but is a foundational stat: I call it The Other ACV — your Annual Customer Value.
How much is a customer worth to you on an annual basis? You calculate it by dividing last year’s total revenue by the number of complete and accurate customer records on your house list.
Why is this valuable? Because, fundamentally, two very important contributors to the consistent growth of your dealership are:
- GROWING your list by generating new leads.
- MAINTAINING your list by increasing the frequency of visits from past and present customers.
Comparing the ACV metric year after year is a solid way to measure how well you are growing and monetizing your list.
|If you're not reaching out to current customers with compelling reasons to visit your store, they can be easily lured away by your competitors.|
If your focus every day, month and year is just reacting to walk-in floor traffic and handling phone ups and internet leads without paying attention to capturing that customer data and marketing to them in the future, then you can’t grow every single year. Why?
First, you’ll be confined to the conditions of the market and economy, as this is the primary driver of walk-in floor traffic.
Second, those who’ve given you money in the past will always be most likely to give you money again, because they already know you.
But if you’re not reaching out to them with compelling reasons to visit your store, they can be easily lured away by your competitors, or lose interest altogether.
When you develop and execute a solid marketing plan to build and retain your existing customers, and conquer your competitors and orphan customers in your market area, YOU begin to control the floor ups, phone ups, and internet sales leads, NOT the market.
Where is Home?
Ultimately, continual growth is achieved by touching your entire customer buying base on a regular basis with interesting and persuasive messages. In my days of operating four Atlanta-based metric stores, I successfully identified a lot of ineffective marketing, but I also found one strategy that worked: events.
Every month on the third Saturday we had an event promoted by direct mail, phone calls, in-store signage, website, staff personal invitations, etc. We mailed to our house list and then to a sourced list of targeted prospects. These events gave us a great reason to reach out to our entire customer buying base every month with new information. It made our existing customers feel like they belonged and that their business was appreciated. And it provided our orphan customers — or customers of competitors — who gave us a try with a new dealership they could call home. Ultimately, it was the best way I found to grow our herd. Give it a try.