Opportunities Lost…but then Found!
Finding Service Revenue Opportunities at Your Dealership

Each day, during the service write-up and diagnostic process, service advisors and technicians frequently discover potential service revenue opportunities; otherwise known as “problems” to the car owner.  In most cases, they present their findings to the vehicle owner with the hope of “up-selling” additional service lines. Most of the time the vehicle owner declines the proposed services for one of two reasons or both: time and/or money.  The customer then leaves the building and the potential revenue is technically lost.  How much is lost?  Let’s play with some numbers.

Most service directors will say that up to 40% of all repair orders have at least one declined service opportunity listed. If your shop handles 75 repairs order per day then you will have up to 30 declined service opportunities each day or 780 per month (26 days).  Basically, your Service Department has missed out on 780 potential revenue opportunities in just one month

Now…let’s look at the financial implications of lost service revenue opportunities. Suppose that the customer pay and parts revenue attached to each declined service opportunity equals $150.  Using the numbers from above, 780 declined service opportunities missed per month equates to a potential loss of  $117,000 of additional revenue ($150 x 780) or $67,860 in Gross Profit ($117,000 x 58% GP)

So we assume that 780 declined service opportunities leave because they do not have the time and/or money to have the services performed. Does this mean that they will not have the needed service completed at some other time?  No…it could mean that the decision has just been delayed.

Theoretically, the money is not lost, but in a holding pattern. The key to “finding the money” is to proactively contact the declined service customers to remind them of the importance of having these services performed and to offer an incentive (i.e. 10% off, etc.) to return to the dealership.

Studies show that with an effective and automatic follow-up declined services process using multiple channels of communication; the average dealer will have a 13.5% response rate with an average RO value of $331.  Again, using the numbers above, 780 declined service opportunities per month at 13.5% response rate equated to 105 RO’s at $331.  By utilizing an automatic follow-up process and being proactive with the service opportunities you originally perceived to be lost, you just found $34,854 in revenue each month.

Not only have you found the lost money, but also proactively re-engaged that customer into your service department.  A “Win-Win” for everyone!

~ Gary Mitchell
Director, Telephony & Virtual BDC Products, DMEautomotive

Bio: 
Gary has 25 years of experience in providing franchised auto dealers with marketing and technology solutions designed to increase revenue and overall profitability. Gary has held national positions with ADP Dealer Services, LML Technologies, and DMEautomotive. He is currently responsible for researching and designing new products and marketing campaigns based on industry trends and specific dealership needs. He directly interfaces with Development and Product Management to monitor market needs and requirements, taking into account emerging technologies, competitor products / services, industry trends, and regulatory / compliance changes for both OEM and regulatory bodies.  LinkedIn Profile:  http://www.linkedin.com/in/garymitchellauto 

Original post is located at http://www.automotivedirectmarketing.blogspot.com

Historically, it was difficult for dealers to stay in touch with their customers throughout their lifecycle.  However, with all the communication channels available today, the consuming task of communicating appropriately with your dealership’s active customers is a much more palatable task. 

Do you want to keep your customers thinking of you first? Or do you fear that your competitors are treating your customers like they are their customers?  In order to lead your current customers down the preferred customer path there are two important timeframes and several related topics to keep them thinking they’re your customers. 
 
New Vehicle / Next Vehicle Purchase Timeframe

Your dealership’s Sales Department should communicate with your customers as if their interaction were a date or an event with a close friend.  If you attended a social event with a friend or attended a party at their home, normal etiquette would be to send a “Thank You Note” afterward.  The same would be true following the sale of a car.   Every salesperson would admit that the purchase experience is time-consuming and demanding on all parties involved.  Therefore, knowing the importance of and effort during a car purchase, it is a good practice to send the buyer a note expressing your dealership’s appreciation of their business.  Just as I am sure you would appreciate a “thank you note” from a friend after all the effort and time you put forth hosting a party.

Who doesn’t love to receive a birthday card?  Okay, so maybe the reminder of the fact I’m aging isn’t exactly fun…but it’s nice to know someone is thinking of me on my special day.  Well, car dealers should use this personal event as reason to communicate with their customers by sending birthday cards. 

What about a “Purchase Anniversary Card”?  Your customers need…and should… be reminded of how much you appreciate them as a customer.   On the anniversary of when the car was purchased, it is an opportune time for your dealership to send a card that not only expresses your gratitude, but also includes a special offer or discount to drive them back to your store.

What if you had a way to save a friend some money?  Toward the end of the customer journey, your dealership should communicate “Current Specials” to entice your “friend”, the customer, to purchase their next vehicle from your store.   Since they have purchased from you once before, you’ve maintained contact with them throughout the life of their vehicle and now they need a new vehicle, it is an ideal time for you to remind them of your relationship and extend an offer that saves them money.

Current / Past Service Timeframe

The communications from the Service Department should work concurrently with those sent by the Sales Department.  A “Welcome Note” to your customer, greeting them as a member of the Service Family is a nice touch.  We all want to feel welcome and like we’re part of a family, don’t we?! 

A friendly “Reminder for Minor or Major Services” are in order to distinguish your Service Department and its services.  The same would be true for notifying your customers of their Warranty and Extended Warranty service.  Reminders sent at the appropriate time can create an action by a consumer.  Consumers always want their vehicles to run like they’re new and, if reasonably serviced and maintained, they can.  Make it simple for the customer to see the basics not as extreme, but essential to the good maintenance of their vehicle.  When a customer sees simple value they will react on a consistent basis.  Make sure you think through the offer you are making to that particular customer.  Your customer wants to feel special; make them feel very special.

Consistent Message

Though you want to ensure that the current message sticks out from what you have sent previously, you want your marketing pieces to have a consistent feel and look that the customer recognizes and remembers.  It’s a fine line but essentially you want your messages to make an impact on the customers while making it easily recognizable that it is from you…someone they know, trust and have a relationship with already.  Always use something that they will remember you for.  Always ask yourself: What will your customer think of when they think of you?

Digital Media

In today’s rapidly evolving digital world dealers should remember to take advantage of all the different communication tools available.  A multi-channel approach, which entails utilizing email, text, telephony and social media to spread your marketing message, is the best way to continually touch consumers.
 
Do You Want It?

Last, but certainly not least, when considering your customer communications, maintain a simple philosophy:  If you would not want to receive the message, do not send it.  Be proud of what you send to your customers.  Keep your messages simple, truthful, personalized and make sure they have value to that particular customer.  If you want it, your customer probably does as well.  Stay friendly.  Your customers want to be part of an organization that wants them to be a part of their organization… and chances are, they’ll think of you first.

~ Paul Ryan, Sales Manager of Mail Team @ DMEautomotive

 

Bio:

Paul Ryan brings over 20 years of experience in sales, sales management, marketing, negotiation, leadership and client services. He joined DMEautomotive in February of 2008, as a Regional Territory Manager. With proven success as an inside sales representative selling the FullCircle Solutions’ Bullseye program, he was recognized frequently as Sales Person of the Month and received the highest honor of Sales Person of the Year for 2008. In August of 2009 Paul assumed his current position of Sales Manager, Mail Team. He is responsible for overseeing the entire Mail Division and manages a team of sales representatives.

Paul graduated with a B.S. In Business Administration from Iowa State University.

LinkedIn: http://www.linkedin.com/pub/paul-ryan/7/726/b35

How are you managing your marketing?  

Or should I ask, are you?  

Some of the fatal mistakes automotive dealers make is the shotgun marketing approach, hitting all your customers as many times as possible.  I know you have heard this all before, but I am going to say it once more - you don’t want to make your customers numb to your message.  One of the critical steps in managing your marketing is to determine why you are communicating to the customer. 

Are they due for service?  Most of you are on an automated program that communicates to your customers during their vehicle lifecycle. These campaigns are timed by business rules that are based on the vehicle needs, driving habits, etc.  Just because they are automated does not mean you cannot improve your results and market more efficiently.  Review your reports to see who you are targeting and how or if they are responding.  A customer data driven mapping tool can be a great way to help you see a snapshot of your customer database You can view which zip codes have the higher response rates and customer spend with just a mouse over.  Review your enrollment detail in the program.  You can adjust your radius after seeing how far your customers will travel for service.  You need to own your 5-10 mile radius around the dealership for service.  Are your offers relevant and priced comparatively with the market?  A reasonable priced offer is more effective than a percentage off.  Remember – your customers may not know your prices so a percentage off offer doesn’t give them an idea of value.

Are you trying to build traffic?  Alright, I fibbed – I am going to say it once more…you don’t want to numb your customers to your message.  Therefore, depending on the relevancy of your offer, you may want to consider suppressing the above-mentioned customers from your custom campaigns.  Sales prospects will travel further for a perceived value offer - keep the radius open on this communication.  Track your campaigns to see which offers and formats have a higher response rate.  Refer back to those formats when creating new campaigns.

Ok now that I have said not to blast your customers with too many messages, I am going to put a twist on this.  There have been tests that prove receiving the same message across multiple channels increases your response rate.   How do your customers want to be communicated to?  Email is a more cost effective channel and more and more customers prefer to receive emails, but don’t forget about those customers that just prefer a letter.  Keep in mind the demographics of your target audience.

Stay involved…manage your marketing.

~  Marcie Hopey, Product Manager @ DMEautomotive

Bio:

Marcie has 15 years of extensive experience, of which 10 are in the automotive industry, with strategic planning, market research, media and events.  She has a successful track record for implementing new marketing plans to expand market share and grow revenue.  Marcie possesses a forward thinking approach to business with an emphasis on bottom line results.  As DMEautomotive’s Product Manager Marcie is responsible for the company’s Direct to Dealer Program, product development and data analysis, client services, and customer retention. 

In a world of clutter, junk mail and non-stop advertisements, how do you get your direct mail noticed? There are many ways to have your direct mail piece stand out so it won’t get mixed in with the junk that fills your customers’ every day mailboxes! Read our quick tips below on how to get your mail noticed and motivate your customers to visit your dealership. 1. Keep your mail visually stimulating – A plain white envelope and an all-text enclosed letter are lackluster to say the least. It’s important not to make your mail piece too crowded. The use of bullet points and appropriately bolded text and images are effective methods of creating a visually appealing and interesting mailing. If you’re direct mail piece is a letter, use short direct sentences and paragraphs. 2. Know valuable information about every customer in order to personalize all marketing pieces – In order to personalize your marketing pieces, it is important to really know and understand your target. When you know consumers’ basic demographics, interests and recent purchases it is easier to personalize your direct mail piece and send them relevant, interesting and compelling promotional offers. Personalization is more than just including the recipient’s name within the piece. Rather, a critical characteristic of personalization is that your message and offering is relevant to the needs and wants of each customer. Personalization and relevancy increase perceived value and consequently improve response rate. An InfoTrends/CAP Ventures personalization study found that highly personalized color direct mail generated a 6.5% response rate—much improved from the 2% response rate non-personalized direct mail is said to generate (Source: QuantumDigital). 3. Make sure the right message is being delivered to the right person at the most opportune time – This statement is often used in the automotive and direct mail industries, but what does it really mean? It means that you must make sure that your message is applicable to the recipient at the moment they receive your mail (or at least the near future). For example, according to Specialty Equipment Marketing Association (SEMA), the window for accessory sales is within the first four months of ownership (Source). This is especially true for trucks and niche cars (i.e., Camaro, Corvette and Nissan Z). More dealers should consider direct mail pieces regarding accessories to owners of such vehicles, directing them back to the dealership to make a purchase. Other simple ideas are to send pieces aimed at the first service visit, anniversaries, and parts for aging vehicles. The basic rule of “the right message to the right person at the right time” is to follow the customer lifecycle and keep in constant contact with them…from the sale of a vehicle, to servicing the vehicle over time, to the sale of a replacement vehicle. 4. Use other mediums to get your message across – In today’s rapidly evolving digital world, dealers should remember to take advantage of all the different communication tools available. A multi-channel approach, which entails utilizing email, text, telephony and social media to spread your marketing message, is the best way to continually touch consumers. 5. Make it BELIEVABLE! – We can all probably remember a time when we’ve met a young child who always evaded the truth. “Johnny, did you break that window?” “No,” responds Johnny…looking as guilty as Tom from Tom & Jerry cartoons. Or the kid who always cried wolf, claiming he was too sick to attend school that day. What happens in those situations? We all become skeptical, jaded and leery of that kid. Do your customers believe your direct marketing offers? If not, why? Have you over time put out big broad statements that weren’t backed up when a consumer stepped onto the lot? Are your customers leery and cautious of your promotions? The key to a successful direct mail campaign is to make your offer believable. Don’t overpromise. Make the deal real. If you follow these simple five tips, your direct mail will stay far away from the pile that ends up in the bottom of the garbage bin. By sending personalized, consistent, relevant and timely messages to your customers when they need them most, you will ensure that your mail is always pleasantly received by your customers. Remember, customers will welcome information when they need it, so be sure to send them believable and appropriate mailings, offers and promotions at the most opportune time! ~ Missy Jensen, Social Media Manager at DMEautomotive. Bio: Missy designs, deploys and maintains the social media initiatives for DMEautomotive in an effort to increase brand awareness, distribute company and industry news, provide updates on products and services and promote consumer engagement. Missy enjoys the process of learning; researching and watching projects come to fruition! Prior to her transformation into a web specialist and work with DMEautomotive, she has 10 years of experience in the marketing and communications industry. Missy served as the Director, Handicapping & Communications for a regional golf association and helped successfully launch and maintain a cutting edge technology-based ticket resale program on behalf of the St. Louis Cardinals Missy attended St. Lawrence University where she graduated Magna Cum Laude with a BS in Psychology. She also holds a Master’s Degree from Miami University in Oxford, OH. She can be reached at missy.jensen@dmeautomotive.com LinkedIn Profile: http://www.linkedin.com/in/missyjensen From:  http://automotivedirectmarketing.blogspot.com/2010/03/top-five-ways-to-get-your-direct-mail.html

It has been said that cars are one of the few personal possessions that arouse extreme consumer passion and fanaticism.  People talk about their cars frequently, whether they are bragging or complaining, to their friends, coworkers and family members.  And in today’s technologically advanced world, they are conveying their opinions, thoughts and feelings (both positive and negative) to an infinite number of strangers online – through blogs, forums, review sites, and social media communities.  While a certain percentage of individuals actively voice their opinions online, an even larger number of individuals use the Internet to research products, services, and companies as part of their buying process. A 2009 study by Razorfish found that 73% of consumers have posted a product review online, while another 97% of consumers search a brand online.

Conversations are taking place...everywhere, 24/7/365!  The conversations that are occurring online, through sites such as Facebook, Twitter, blogs, review sites and so on – are about your dealership, your cars, your services as well as your competitors.  More and more in today’s world, customers are consuming and reacting to user-driven content and ignoring corporate advertising and PR. Therefore it is vital for your dealership to understand social media, where these conversations are occurring, what is being said, how to handle the comments being made and, last but not least, how to become part of the conversation.

Social media has fundamentally changed the way we communicate and, perhaps most importantly for you, the relationship between companies and consumers. Monologues have given way to dialogues! According to Heather Angus-Lee’s “Time Is Of The Essence: Gaining and Maintaining a Competitive Advantage With Social Media,” traditional media had a “top-down” or “one-way” delivery, where companies told consumers what to buy, as well as when and how to buy products through the use of newspapers, magazines, television and radio. Today, social media boosts a “ground up” (as termed by Angus-Lee) or multi-directional delivery in which companies and consumers have ongoing interactions through self-published or user-generated content. Unlike in traditional media, companies cannot continually push products and go for the “hard sell” online…because if they do, their message will fall upon deaf ears. That is the beauty of social media: people quickly decide what they want to listen to and talk about.

How can your dealership employ social media as part of your marketing strategy?

It is glaringly obvious that avid car enthusiasts, your current customers, actively interested shoppers and those that peruse the Internet as part of the buying process are ALL over the Internet! To capture their attention, it would be wise for your dealership to use social media. That being said, you do not want to jump in without looking first!

Start Your Engines!

With a vast array of online social media sites to choose from and, given the rocky economic times and shrinking marketing budgets, less time and fewer people to handle the tasks associated with a social media campaign, it’s very important to have a sound strategy (as with any other marketing effort). Here are some steps to get you started on the right foot:

1. Research First! Find out where your customers and prospects are on social media by listening to and researching the current conversations. And don’t forget about your competitors…where are they and what are they doing?! There are several listening tools available online, such as Google Alerts, Social Mention, Twitter Search, and even a search function within Facebook. However, one simple suggestion is to ask your in-dealership customers what social networks they are using.

2. Plan! Just as you would other marketing campaigns, create a social media strategy based on what you learned above. Ask and answer the following questions:  Where are you going to participate? Will your dealership employee be responsible for maintaining your profiles? How much time will they devote to it? Or will you outsource your social media? What is your objective? What type of content will be posted?

3. Build It! Once you have an understanding of where your audience is, you must build a place for them to visit, whether it is a Facebook Fan Page, a Twitter account or YouTube channel.

4. Engage! An inactive account, second to the hard sell, is one way to lose customers and prospects. If there is one thing to remember during the “engage” phase, it’s this – engagement is a process…an evolving process. Content must be continually refreshed.

Using social media for marketing your dealership can certainly seem daunting. Most dealerships are still trying to sort out the real value of social media and understand how it can influence their company, brand and their bottom line. However, keep in mind that conversations are happening online about your dealership and your products whether you choose to participate or not. Social media will allow you to connect with an online community of customers and prospects. They’re out there just waiting to hear what you have to say!

For a more in-depth look at Navigating Social Media in the Automotive Industry, download DMEautomotive's free whitepaper here.

Has your dealership ever experienced the following scenario? A prospect walks into your dealership and leaves without buying a car.  The Manager asks the salesperson why and they respond that the prospect couldn’t afford the car they wanted or he didn’t have the car the prospect wanted.  A third party conducts a follow-up interview with the prospect and a completely different version of the interaction is revealed. Sound familiar?  The question now becomes:  What should your dealership do with those third party follow-ups to improve sales? I've studied this situation throughout dealerships across the country.  Here’s what I found.  The biggest difference between stores that increased sales and those that didn’t is what they did with the third party follow-up information. I found that unsuccessful dealerships had the tendency to ask their staff for an explanation of the prospect’s survey and feedback before they called the prospect back.  Salespeople and Managers tend to get extremely defensive when they learn that a prospect does not have the same perception of their visit as they do.  I’ve personally witnessed them call the prospect “crazy”.  They will make excuses...like, the prospect couldn't afford the monthly payment.  If you go to your staff first, you’ve essentially tainted the effectiveness of the third party follow-up and, in all likelihood, you will not be able to effectively sell to that opportunity. On the contrary, successful dealerships approach the third party follow-up as an entirely new opportunity.   Since the prospect won’t come back to look at the very car they didn’t buy yesterday, the successful dealership has a plan to re-car the prospect.  They use the information presented in the third party follow-up to get a better understanding of the prospect’s needs and determine a way to meet those needs by recommending other vehicles on the lot.  They get excited about showing the prospect the vehicle that would fit their needs; stating that they “just got it" or that the staff last night was unaware of it.   Additionally, if needed, they apologize for any poor service the prospect perceived to be unacceptable, offer a test drive the prospect perceived they were not offered, and express the desire to present an offer the prospect perceived they didn’t previously receive.  Again, all of the dealership’s actions are based on the prospect’s perceptions that were ascertained by the third party follow-up. At the end of the day, ask yourself one question:  Who do we sell to…Our staff? Or our customers and prospects? Why get your staff's opinion of what happened when you have your prospect’s opinion of what happened?  The very minute you get an "update” from your staff… the very minute you go to the salesman or the manager to "better understand what happened” is the very minute you taint your view of the prospect.   To be successful, you must use the information from a third party follow-up without consulting your staff, as they will affect your perspective and strategy to “re-car” the prospect. During the first opportunity your dealership had with this prospect your staff probably reacted to “what are you looking for” and allowed the prospect to control what vehicle you showed them.    But now, thanks to the third party follow-up, you are in control.  You know the prospect’s personal vehicle needs and their down payment and monthly payment budgets.  You know your inventory.  This time you can control which vehicle you show the prospect and you know what your profit margins will be when they purchase the vehicle. Following a third party follow-up, make sure you implement two processes: (1)  Have a different manager and salesperson tackle this opportunity (2)  Have a “re-car” plan - Work the numbers on two separate vehicles that you know will fit the prospect’s personal and financial needs and will generate you sufficient gross profits before you call them back.

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The blog is accessible via: http://automotivedirectmarketing.blogspot.com/

Knowing how to navigate social media is similar to navigating your neighborhood streets. Just as you wouldn’t slam on the gas between two stop signs a hundred yards apart, you should be conscientious of the acceptable behaviors and expectations of participating in social media. Here are 8 simple rules for engagement in social media.

1. Social media is meant to be FUN! Inject some personality into your postings, be friendly and be entertaining. But remember to keep it clean! 2. Don’t push…Pull. Ask questions....don’t sell. Especially not right off the bat. Listen and learn from your audience. Build a rapport. Eventually you should be able squeeze some sales messages in without backlash. Promote your dealership in a non-intrusive way. 3. Be authentic. Be you. Be honest about who you are and what your intentions are. 4. Give up control! Let your followers and fans speak and share their experiences. Don’t restrict who can and can’t leave comments. When someone does share, be sure to respect his or her opinions. 5. Be realistic. Don’t expect immediate results. You can spend a half an hour a day on social media but understand that it will likely yield a very unsuccessful result. The more time and effort your dealership is able to dedicate, the better the engagement. Additionally, social media is aimed at building deep, meaningful relationships. And we all know that those don’t happen overnight. It’s been said that social media will never close a deal, but it can certainly create a buzz about your product. The deal must be closed once the prospect enters your dealership. 6. Address any concerns or negative feedback immediately. “When you respond quickly to a customer concern or complaint it lets the customer know what to expect when they do business with you,” according to Lori Vajda Social Media Coordinator for AutoNation. Not only is the timeliness of response important, but also the manner in which you respond. If someone posts a comment on Twitter, respond on Twitter. This ensures that the same people who saw the initial comment will also see your response. 7. Frequently update your profile with meaningful, relevant and timely information. A stagnant profile will scare off customers and prospects alike quicker than a salesperson in a vintage polyester suit. 8. Measure. Just as with other marketing efforts, don’t forget to track your progress. This can be done easily by tracking the number of fans you obtain, the number of Twitter followers, the number of times a tweet is retweeted, the number of blog subscribers or the number of video views. This information can usually be easily obtained. You can also use Google Analytics, a free tool used to track website and blog traffic (provided you don’t have something similar in place and/or you have someone who can set it up for you). Though we’ve outlined the etiquette of social media above, if you need to remember just one rule-of-thumb in social media it’s that you should be yourself.

~ Missy Jensen, Social Media Manager at DMEautomotive.

Bio:

Missy designs, deploys and maintains the social media initiatives for DMEautomotive in an effort to increase brand awareness, distribute company and industry news, provide updates on products and services and promote consumer engagement. Missy enjoys the process of learning; researching and watching projects come to fruition!

Prior to her transformation into a web specialist and work with DMEautomotive, she has 10 years of experience in the marketing and communications industry. Missy served as the Director, Handicapping & Communications for a regional golf association and helped successfully launch and maintain a cutting edge technology-based ticket resale program on behalf of the St. Louis Cardinals

Missy attended St. Lawrence University where she graduated Magna Cum Laude with a BS in Psychology. She also holds a Master’s Degree from Miami University in Oxford, OH. She can be reached at missy.jensen@dmeautomotive.com

LinkedIn Profile: http://www.linkedin.com/in/missyjensen

Original blog post is located at http://automotivedirectmarketing.blogspot.com/2010/02/8-simple-rules-for-navigating-social.html

How many times have you heard this in the service department each day? If you are saying this on the dealership side then it means that the callers are also saying it on their side, which cannot be good.

Dealers often spend thousands of dollars per month marketing to their customers in an attempt to motivate them to call the dealership. Yet they struggle with answering the phone when those customers do call. Nothing can frustrate a caller more than being put on hold or having to leave a message when they are trying to spend money.

How does missing phone calls affect your dealership’s bottom line?  That could cost you up to $150,000 annually!

Ask yourself this, “How many calls to your service department each day are missed or mishandled that could have resulted in a service appointment and RO revenue” Most dealers will say somewhere between 5 and 10 calls are missed for whatever reason each day. Let’s assume that only 3 calls per day are missed or mishandled that could have resulted in an RO. Using your own metrics, what would missing three RO’s per day mean to you?  Better yet, what would 3 additional RO’s per day mean to your bottom line?

Let’s assume that your service department is open 6 days per week, average RO revenue value with parts and labor totals $225.00 and your Gross Profit percentage is 70%.

3 RO’s x 6 days = 18 weekly x 52 weeks = 936 RO’s @ $225.00 average each = $210,600 x 70% GP = $147,000 in your pocket.

If you expect the phones to ring make sure that you have the processes in place to effectively handle the callers. With the economy the way it is, dealers have reduced head count to stay profitable. That means fewer employees available to answer the phone that often forces the decision to either ignore the callers or the customers standing in the service drive. Which one is more important? Of course they are both very important and need to be handled promptly.

One solution dealers find attractive is contracting with companies that provide 24/7 inbound call “backstopping” services to answer the calls that are not being answered in a timely manner. These companies will perform as if they are employees of the dealership and will set service or sales appointments, transfer calls, or take messages. This service insures that no call is missed and that all calls are handled properly. Finally… someone is answering that phone! ~ Gary Mitchell

Since my last blog was about logging prospects via a "Master Log”, it's now time to talk about what to do with the log once you've got it. Traveling the country I've seen the problem over and over again.  Management often doesn’t think they have a problem.  I hear "That doesn't happen here" all the time.  Most sales people and some sales managers know EXACTLY what to tell their bosses to make them go away. After all, sales people and some sales managers "know" who can buy a car and who can't and they "know" if the prospect they talked to yesterday could have bought a vehicle, they would have sold them one yesterday.  So why follow up with them today?

First let's look at the reasons why your staff thinks people didn't buy a vehicle from them: 1.      They are too buried in their current vehicle. 2.      They don't have enough down payment. 3.      They couldn't afford the monthly payment on the vehicle. 4.      You didn't have the specific vehicle they were looking for. 5.      They were just looking. Granted some people are too buried in their trade and some people are credit challenged. Those are the examples that your staff will want to talk about.

The successful dealerships look at those same reasons with what I call a "mirrored" perspective:

1.  They are too buried in their current vehicle.  That's true based on the vehicle YOU showed them. 2.  They don't have enough down payment.   That's true too, based on the vehicle YOU showed them.

3.  They couldn't afford the monthly payment.  Based on the vehicle YOU showed them this may be true, as everyone has a budget.

4.  You didn't have the specific vehicle they were looking for. Some people do come to your store with a specific vehicle in mind.  YOUR common response to "I want a CD player, white exterior and grey leather" is usually something along the lines of: "That's a number 4, we don't have one, but we'll find one for you".  I've seen some salespeople even tell them what dealership they found it at!    If your order taker would have applied some salesmanship, they could have asked " If I found white one and it had a CD player and I could save you $2,000 but the interior was brown, would you want a lower payment or grey interior?".  Here's a great test, the next time your salesman gives you that reason for losing an up, ask him what part of the "package" was the deal killer. If we knocked off $2,000 did they really have to have a CD player or was it the grey interior that killed the deal?  More than half the time YOUR salesperson/sales manager will say "What?" 5.  People "look" at cars on the Internet! Most people don't have time to just go looking for a vehicle with no intention to purchase a vehicle either now or in the near future.  Sure, people do tell your staff that they are just looking.  What your staff doesn't understand is they are just looking FOR A VEHICLE TO BUY! The art of actually selling a vehicle has been lost for years.  Often the consumer knows more about the vehicle on your lot and what other makes/ models compete with that vehicle then your staff does. So what do managers do? They ask the wrong questions and don't inspect what they expect.

They ask “did you call yesterday's prospects back?”. The answer might be yes.  They should ask “did you talk to yesterday's prospects?”.  The answer will be no.  I've actually tested this at several dealerships. Test it in your store! If you get the right answer more than 50% of the time then you're doing GREAT!

The second question must be “what did you talk to them about?”.  The answer will be something like: "about the same vehicle they were looking at yesterday.  Can they come up with $5,000 down? Can they now afford $700.00 a month?".   The answer should be "about that vehicle and the back up plan to BRING THEM BACK IN THE STORE AND SHOW THEM ANOTHER VEHICLE!".

After you do this a few times, most of your salespeople/sales managers will change their answers.  Again, generally speaking, people will tell you what you want to hear to make you go away.   Then what do you do?  YOU pick up the phone and do a test call.    Tell the prospect that you’re the manager and your calling to make sure that when your salesperson called today, they were courteous and helpful and offered them an additional $200.00 if them could come back in. You will quickly find out if they called or not.

I'm assuming that most of the people who read this are actually "in" the industry and, at this point, literally saying to themselves that this WILL NEVER HAPPEN.  If you're one of them, YOU'RE CORRECT.  So what do the successful dealerships do about it?  They have a third party do their follow up.  People will tell a third party more than they'll ever tell you. You'll start understanding your customers’ perception of their visit.  That is the perception you want to base your decisions on.  Some deals don't happen; not because the prospect didn't like the salesperson (after all, we try to hire nice people), they don't happen because they didn't "click" with the salesperson.  You'll never know that if you depend on your staff to follow up.  You'll never know that they went to a competitor and got $200.00 more for their trade, you'll never know if they got a reality check and now understand they can't get a $50,000 vehicle for $199.00 a month. Why won't you know?  YOUR STAFF thinks people don't buy vehicles because: They are too buried in their current vehicle, They don't have enough down payment, They couldn't afford the monthly payment on the vehicle, You didn't have the specific vehicle they were looking for or They were just looking. Looking in the mirror is not easy for a salesperson a manager or a store. Once you have a third party providing real information to you there is still a lot of work to do.  It will be very difficult to react to your prospects perception.   Your instincts will tell you to ask the salesperson what happened before you call that prospect back…which means you really don't want to see what's in the mirror.

~ Steve Dozier, Sales Director @ DMEautomotive

Bio:

Steve Dozier brings 15 years of experience in the automotive industry to DMEautomotive. Before joining Full Circle Solution and DMEautomotive, he held upper level management positions in the retail industry. Steve also owned a consulting company that specialized in CRM and direct mail, which brought in $2 Million in Sales for approximately 5 years. While serving as a consultant Steve was consistently recruited by the top 3 CRM firms of that time.

Since starting with DMEautomotive Steve has held a managerial position overseeing the Dealer-to-Dealer team. He is responsible for the entire telephony sales department.

Steve is married with two children and enjoys scuba diving and boating in his free time.

LinkedIn: http://www.linkedin.com/pub/steve-dozier/10/903/623

The Unsold Prospect – Don’t Let Them Get Away

If you ask any dealer, they will tell you that 4 out of 5 prospects that come to their showroom depart without buying a new or used vehicle. What most won’t tell you is that 70%-80% of those prospects left because they just were not ready to make a purchase decision yet. They are still shopping. Why? Because consumers may be confused by all the different variables (i.e. selection, discounts, rebates, interest rates, etc.) or who to purchase from and, in some cases, they just are not ready yet.

NADA published the following survey results:

• 90% of the prospects bought somewhere within a week.
• 90% of the buyers were not followed up with after leaving the dealership without making a purchase.
• The average salesperson sees and talks to as many as seven prospective buyers face-to-face each day.
• Only 20% of prospects buy on a first visit.
• 57% of buyers buy within three days of the day they start looking.
• 42% of buyers actually took the time to shop other dealerships.

At the time, you could pretty much “bank” on the stats and a lot of dealers established the showroom processes based on the logic.

Fast Forward to the Internet Age

Realistically, these statistics are no longer valid because today’s consumers are more “car shopping savvy”. The Internet provides so much information on every available vehicle, including incentives and pricing, that people start shopping earlier and longer than in the past. They are doing their homework on their vehicle choices prior to visiting the dealership and only visiting to test drive and validate options. It also means that many are not purchasing on the first visit, within three days, or even within one week.

According to recent news and various published reports, the good news is that the economy is turning and more people are shopping for vehicles. With the good news comes the bad. Dealers have cut back on sales and sales management staff as well as their BDC staffs. This means fewer dealer staff to meet and greet and then follow up. Also,according to Shulman (2001), most dealerships struggle with the following:

• A large percentage of prospects who did not purchase because they were uncomfortable with or did not like the salesperson or manager.

• Reduced or no supervision by busy sales managers who are too involved with the dealership problems (other than sales) to monitor sales follow-ups.

• The distraction of floor traffic that justifiably competes for the salesperson's attention for ongoing follow up with prospects.

Solving the Problem

In an article written by Nat Shulman (2001), George Libin, president of the Automobile Profit Builders in Wayland, MS, a leading showroom control solution providing company, stated“a prompt and properly handled phone call (within 24 hours) to a prospect can bring back 50% of first-time unsold ups. Of these be-backs more than half can be closed. After six weeks, a similar call may bring back another 14%, half of which can be closed.” Very simply put…if they are shopping your dealership…they are most likely shopping other dealerships as well. Basically, the dealership that promotes timely and effective follow up, has the greatest opportunity of earning their prospect’s business.

Given these current conditions, we are seeing more and more dealers taking the proactive steps to use a professional Virtual Business Development Center (VBDC) to manage and call their Unsold Prospects. VBDC’s are designed to contact a dealer’s potential customers within 24 hours of an event to re-establish contact, verify their overall experience, make an offer to return, and schedule appointments with sales management. In essence a VBDC takes the follow up process to a new level that is designed to increase be-back percentages and sales opportunities. The good news is that the VBDC can produce more results at a lower cost while removing the headaches associated with following up on unsold prospects.

Reference: Shulman, N. (2001) What a follow up call can do. Retrieved on November 15, 2009 from http://wardsdealer.com/ar/auto_followup_phone_call/

~ Gary Mitchell

Director, Telephony & Virtual BDC Products, DMEautomotive

Bio:

Gary has 25 years of experience in providing franchised auto dealers with marketing and technology solutions designed to increase revenue and overall profitability. Gary has held national positions with ADP Dealer Services, LML Technologies, and DMEautomotive. He is currently responsible for researching and designing new products and marketing campaigns based on industry trends and specific dealership needs. He directly interfaces with Development and Product Management to monitor market needs and requirements, taking into account emerging technologies, competitor products / services, industry trends, and regulatory / compliance changes for both OEM and regulatory bodies.

LinkedIn Profile: http://www.linkedin.com/in/garymitchellauto

Note: The original blog has been updated to include proper references.