February 19, 2010
How to use credit to secure repeat business
Plus, what you need to know about the Credit CARD Act
By: Mike Manges
Customers who hold dedicated credit cards are more likely to return to your outlet, says John Howard, industry marketing manager for GE Money.
There are many tools at the independent tire dealer’s disposal that can be used to secure repeat business. Some dealers put customers on strict preventive maintenance plans. Some promote tire rotations, oil changes, brake checks and other interval-based services. Others bring customers back with specials and coupons.
Extending credit in the form of a dedicated, private label credit card can be another effective way to bring customers back to your store, says John Howard, industry marketing manager for GE Money, a third-party credit vendor that counts thousands of independent tire dealers among its clients.
“It’s important for retailers to realize that customers who use a specific private label credit card spend more and make more frequent visits to their locations.
“Once a retailer understands that and goes out and puts the customer on a credit program, they can establish a relationship with that customer.”
Howard says there are several ways to promote credit at your dealership:
1. “Communicate the value of giving the customer a longer length of time to pay for the product.” Starting Feb. 22, credit card promotions with durations of less than six months will not be allowed, thanks to the Credit CARD (Card, Accountability, Responsibility and Disclosure) Act of 2009, which was passed last May.
That means the traditional “90-days-same-as-cash” deal will cease to exist.
“You’re giving the customer six months to pay for it instead of the customer laying out a large amount of money. Obviously, the customer would be required to make minimum monthly payments, but the value is that he or she is not parting with a lot of cash.”
2. Dovetail the use of credit into a vehicle maintenance program. “When you’re communicating to the customer the services they need to have done to their car, that’s the perfect time to communicate the (payment) options they have,” says Howard.
3. Put up signage — and lots of it. “It’s important to display signage regarding credit and promotions throughout your store... making sure customers know that special financing is available.”
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