When it comes to equipment dealer marketing, looking at and understanding the key metrics is crucial to knowing whether what you’re doing is having an impact on your business. Like all companies, equipment dealers need to look at their marketing efforts as an investment. That means that you should clearly see how the money you spend brings more money in—and how much it brings in.
You have to look at purchasing patterns, when and how often your customers buy from you, what they are buying from you, and whether you can directly correlate your emails and other marketing efforts to sales.
Here are some of the most important key metrics for equipment dealer marketing.
For equipment dealers, gaining new customers is typically far more expensive than selling to your existing customers. If you want long term success and growth, then you have to keep your customer churn rate as low as possible. New customers take three to five years before they can be categorized as a stable customer. Stable customers purchase six to ten times more and are ten times more likely to be retained year after year.
At Winsby, we have an online portal where our clients store their invoices and see trends in retention and other key metrics, so they can identify any problems and fix them. Sales representatives can also go online and see the last time each of their customers purchased and how often so they can call them when they haven’t purchased in a usual pattern.
In addition to looking at customer retention, one of the most important key metrics for understanding whether equipment dealer marketing is working or not is revenue trends. At Winsby, we’ve found that for equipment dealers, new customers within the past year constitute 51% of the customers a business has, 23% of transactions, and 25% of revenue. However, 61% of those do not purchase again over the next 12 months.
For the same equipment dealer, people who purchase in the second year represent 20% of customers, 21% of transactions, and 17% of revenue. If you retain these customers in the second year then they more than double how often they purchase for rentals, service, and parts. During the third and subsequent years the frequency in purchasing more than doubles again for all categories.
These numbers matter because they are what should be driving your equipment dealer marketing efforts. Every year that you keep a customer, the more valuable they are to you. That means that you have to be sending them targeted emails, check in with frequent sales calls, and survey them often to see if anything is wrong.
Purchase frequency is a crucial key metric to consider when evaluating the behavior of your current customers and your equipment dealer marketing efforts. It tracks the number of times a customer buys products or services from a company within a given period. Analyzing purchase frequency will help you recognize at risk customers. If someone begins purchasing less and less from you, then you are at risk of losing them. Before that happens, you can reach out to them and determine what the issue is and fix it.
Once you have a baseline of a normal purchase frequency, as well as knowledge about when and how much your customers typically buy, you can tailor your marketing efforts around existing purchasing habits and trends. If you are sending emails as part of your equipment dealer marketing strategy, but customer purchasing frequency continues to go down, then you know that your emails are not as effective as they need to be.
See if your marketing is working
It’s important to compare the purchase frequency and overall spend for customers who were exposed to a marketing activity versus those who were not. For example, if you have an email program in place to alert your customers of specials and services you offer, compare the spend for customers with an email to those who aren’t receiving your emails.
Are you calling customers regularly? Compare the spend to those you’re calling to those you haven’t called. What about contacting customer for follow-up surveys? Are the ones you talk to spending more than the ones you haven’t contacted? Below are some comparisons for a dealer over a 12 month period, as an example.
|Marketing Program||Transactions /Customer||Revenue /Customer||Cost /Customer||ROI times Active Customers|
We track key metrics, so you know what works
At Winsby, we will only implement an equipment dealer marketing strategy that works. And we want you to know that it’s working too. That’s why we have an online report with real time dashboards that show the details about when and how often your customers are purchasing, what they are purchasing, and any red flags that you should be aware of.
Our financial experts will walk you through the numbers every month and provide insights about trends that may be happening with your business—good or bad—that you might not be aware of. That way, you’ll be armed with the information you need to make the best decisions possible for equipment dealer marketing and your business as a whole.
Planning for next year? We'll run your key metrics analysis to show you where you are headed. The accuracy of our forecasts is over 95%.