In the business world, it’s generally more cost-effective to keep customers than find new ones. According to Harvard Business Review’s article on customer curation, acquiring a new customer can cost five to 25 times more than retaining an existing one depending on your industry.
And on the flip side, customer loyalty research by Fred Reichheld, a fellow of Bain & Company, found that customers generate increasing profits the longer they stay with a company. As an example, one financial services company showed a 25% increase in profit for every 5% increase in customer retention.
But does this mean that commercial vehicle repair shops should fight tooth and nail to keep every customer they have? According to Tonnika Haynes, president of Brown’s Automotive in Chapel Hill, North Carolina, the answer is ‘no.’
“All money is not good money,” Haynes told Fleet Maintenance sister publication Ratchet+Wrench. “When that customer comes in or that phone number shows up and your blood pressure and your heart rate rise–that’s not good money.”
Of course, this doesn’t mean that shops should blacklist every disgruntled driver they meet in their bays. After all, drivers are only human, and on a bad day when they’re losing money due to downtime, tempers can run high.
Instead, Haynes watches out for behavior that costs her and her staff more than what they earn working on a truck. This includes yelling at staff, lying about the shop not contacting them, or deferring work and having it done elsewhere. She tracks these incidents in her shop management system, and if a customer has more than two strikes, they are not welcome back in her shop.
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Smaller businesses may argue that this is an extreme solution and that they can’t afford to lose customers, even the ones who emotionally tax them and their employees. But Haynes explained that she couldn’t afford to keep such clients because of how their presence caused a drop in service quality for the consistent, returning customers who helped support her bottom line.
“If I did everything that came through here, I wouldn’t have time to provide proper service for the people that want to support my business,” Haynes noted.
Ultimately, she gauges whether she should ‘fire’ a customer based on whether or not they allow her to do her job to her standards.
“If I can’t service [the vehicle] the way I need to as a professional, then I will not do it,” Haynes said. “This is not the place for you.”
Once she implemented this policy, Haynes found that instead of losing money due to customer churn, her revenue actually increased. From January 1, 2021 to October 8, 2021 Haynes saw 3,338 vehicles with an average repair order of $282.32 come through her shop. In the same time period for 2024, she saw 2,524 vehicles and her ARO is $503.92.
This, then, is Haynes argument for carefully considered customer churn, especially for small shops that don’t just need customers, but good ones.
“You have to learn to say ‘no’ and get rid of headaches,” Haynes emphasized. “The people that respect you are the ones you need to make room for.”
