Hint: It involves implementing a digital retailing strategy with messaging woven into it. And we’ve got a guide to help you make it work. SEE HOW
Creating an effective marketing strategy in today’s world is not an easy task. Should you spend your time and money to conquest new customers? Allocate your marketing budget to build brand awareness in your community? Create a program to strengthen customer retention among your existing database? Or should you focus your energy on all of the above? The possibilities are endless. Chances are the answer to an effective marketing plan lies in a perfect combination of a new and current customer strategy that delivers the most optimal return. The problem is finding a harmonious balance.
We all know the old adage, “It costs five times more to acquire a new customer than to retain an existing one.” If this is true for your dealership, then it is in your best interest to capitalize on every opportunity with current customers. Make sure they are informed about needed vehicle maintenance, communicate service savings, share OEM incentives on new vehicles, etc. Now I’m not telling you to give up conquest marketing, but you’ll want to be smart and accurately measure the effectiveness of these efforts to create a low cost, highly effective strategy. If you’re looking for an easy way to bring in new sales without the cost of conquest marketing, here are some quick and easy ideas to get you started.
Identify Ready-to-Buy Customers
You’re probably already trying to determine how to identify current customers in your database who are ready to buy a vehicle. The simplest way is to target any customer who has owned their vehicle for 5 or more years, since according to AAA the average length of vehicle ownership in the U.S is 5.95 years. A little more complex way to identify ready-to-buy customers is to gather customer vehicle payment information from your DMS. This should be found in the F&I records for each customer when they purchased their most recent vehicle. Then, determine which customers are in an equitable position in their current vehicle and would benefit greatly by trading it in for a newer model. If you like the second option, but it’s a little too complex, think about partnering with a third party company to obtain this information about your customers.
Target In-Store Service Customers
You’ve probably noticed that even if you are able to identify in-equity customers in your database, a communcation to them via email or direct mail is not always effective or you typically have to send several communications before your message is heard. An easy way to reduce the cost of these communications is to target in-equity customers when they are in your Service Department. If you can flag customers in your DMS who have equity in their current vehicle, then you can identify them when they arrive for service. This will provide a perfect opportunity for you to start an impactful dialogue between your sales staff and current customers.
Train Your Team to Approach In-Equity Customers
After spending the time to identify in-equity customers who have appointments in your Service Department, the last thing you want to do is send a “too eager” salesperson out to scare them. Make sure the salesperson you have talking with these customers is seasoned and understands these customers are not at your dealership to buy a new vehicle. They should be trying to inform customers about the equity in their current vehicle. You’ll also want to make sure your salesperson doesn’t sound like a predator stalking its prey, so have facts and maybe even a document that can be used as a talking point for the customer to reference. It isn’t likely a customer entering your service drive will buy a new vehicle the very same day, so any steps you can take to ensure they are at ease about the conversation and excited about a new vehicle are necessary.
Follow-Up with In-Equity Customers
In a perfect world, you’d be able to sell an in-equity customer a vehicle on the day of their service appointment, but this is not reality. They typically have a spouse they need to talk to, budget they need to reference, or even research about what vehicle they’d like to purchase. Because of this, you have to follow-up, which can be done in multiple ways and depends on your specific dealership. If you have the manpower, have the salesperson that approached the customer reach out to them by phone, send an email to the customer with specifics about their in-equity position, or if you have one available to you, have your BDC communicate with the customer to set up a test drive. Whichever way you decide to follow-up is totally up to you, but just make sure you don’t lose sight of the potential sale.
Start Building Sales Among Existing Customers
With data directly from your DMS, a knowledgeable sales team, and accurate follow-up, your dealership will return additional sales from your existing customer database. This approach is an efficient marketing strategy that will help you STAND OUT among your customers and differentiate you from your competitors.