I was recently asked my thoughts about reaching the Millennial audience differently.  Anyone with teenagers, like myself, does not need data to know that we are more likely to find them on Snapchat than reading a newspaper.  But it is far too easy to say that digital is our way to reach Millennials. First, not only do Millennials consume multiple media channels, their parents consume most of the same channels, albeit in different proportions.  Therefore, to reach either audience, you need to fully utilize all channels, not just attempt to guess which will be most effective; I always stress “Omnichannel” over “Multichannel” marketing.  In today’s fragmented media, it is difficult to obtain the desired reach and frequency to drive behavior with any one channel for any one consumer segment.  

That being said, the greatest difference in reaching Millennials is not the media, but the message.  Millennials have higher expectations regarding a message being authentic, informative and actionable.  

1. Be Authentic: To be authentic the message must be consistent at all points of contact. Millennials expect to find the same digital offer when scheduling service, in the service lane and on the invoice.  Any deviation is a breach of trust, leading to immediate defection. They will back that defection up with negative reviews, which other current or future customers can read and then also potentially defect to the competition.  So, be sure that you can either back up any offer or statement, or don’t make it.  Millennials are used to all answers being only a click away.   
2. Be Informative: Informative messaging provides the whole context needed to make decisions.  So, you better include pricing, reasons to service now, operating hours and directions.  Paradoxically, they do not want to be “sold,” and certainly, not “upsold,” but, if provided with enough context, will upsell themselves.  Remember, they have grown up with “people like me” purchasing habits.   
3. Make it Actionable: Finally, Millennials are notorious for instant gratification. If the message isn’t immediately actionable, right there on the device where the message was received, don’t expect a call later.  Be prepared to take the appointment through email, text, call, or instant message, at all times. 

While we need to stay current and be present in all the media channels Millennials consume, unless we change our messaging as well, the resulting silence will be as deafening as our dinner conversations. 

I’ve had the privilege of working with several leading luxury brands including BMW, Lexus, Porsche, Maserati and Rolls Royce.  From these experiences, I have learned to adjust owner communications to meet the unique needs of these brands and customers.  

Following are some tips I have learned over the years form working with many luxury service departments. The key point to learn: Luxury is different! 

1. Use More Channels: To be successful, it is important to use more channels to reach luxury customers.  Each channel added to a marketing communication increases response by at least one percentage point.  With a higher RO value, each percentage point is worth much more for a luxury brand.  Therefore, investing in more channels – mail, email, SEM, display and Social -  nearly always pays. 
2. Invest in More Engagement: Not only is each luxury appointment worth more, but standard maintenance appointments tend to be further apart.  With 10,000 miles between standard intervals, to maintain relationships, luxury brands need to find other reasons to engage their customers between service intervals.  For example, early ownership events such as a 2nd delivery to maximize feature utilization; or pit stops to top off fluids, replace wipers or check air pressure; help address owner needs. These types of events build usage habits during the post-purchase honeymoon period.  Another idea is to gather telematics and predictive failure data. This can provide valuable information that can then be used for regular communications regarding the customer’s full maintenance needs. 
3. Work the Data Harder: To catch repairs between service intervals, how about leveraging telematics and predictive failure data to inform owners regarding likely additional service needs?  Luxury brands tend to have a high percentage of leases so consider identifying second owners to maximize revenue from each VIN sold, including pulling sales data from sister stores. In addition, leverage unsold customers in the CRM and use targeted SEM that is particularly focused on older model year parts.  It is also important to make different offers near lease end to entice servicing throughout the whole owner experience, with an eye toward sharing reconditioning costs. 
4. Offers should Focus on Value over Price: While every owner wants a good deal, I am reminded of what Dave Power once told me; there are fundamentally two customer segments, “those who use time to save money; and those who use money to save time.” In luxury brands, we find more of the former than the latter, yet offers tend to still focus on discounts. Concierge services, or premium loaner vehicles, can be more effective enticements for the customer to return for declined services.  It is also worth focusing on higher end voice-to-voice interactions and more liberal goodwill policies. Remember, these consumers are comparing their experiences to premium airline help lines, the Ritz Carlton, or their favorite fine dining, not Jiffy Lube or Pep Boys! 

If you want to win with a luxury brand remember, Luxury is different! So, treat it that way and win. I hope these tips help provide some good food for thought. 

Is your service marketing budget out of whack? And if so, what’s the right number? 

There is a clear misalignment between the service department’s contribution to store profits and the investment in service marketing.  According to NADA, service is responsible for 47.3% of dealership gross profits. However, working with dealers we estimate service marketing is <10% of the average dealership’s marketing budget. Why aren’t dealerships investing in marketing to support fixed operations?  

Look at these charts for a minute: 

Many of my dealer friends argue the chart is misleading because vehicle marketing indirectly drives service profits by setting up future warranty and customer pay opportunities. They feel that the alignment is not as bad as it seems.   

Well, I contend that the indirect relationship flows at least equally the other direction.  First, only half the service customers were sales customers. So, the indirect impact from sales is at best half.  More importantly, servicing owners are 1.5x more likely to remain loyal than non-servicing owners. In addition, loyal owners pay higher margins, providing the loyal sales base needed to sustain a store through challenging economic and product cycles.   

We can differ on which way the net arrow points.  But in my opinion, the indirect benefit from sales to service justifies a fresh look at this huge misalignment.  It rather represents a traditional mindset that service naturally flows from sales, and therefore requires only limited marketing encouragement.   

Given dealers only capture 25% of the service spend, the flow is not very natural. In addition, by most estimations, it is getting less certain as increased leasing places more vehicles in the hands of second owners that much earlier. And let’s not forget how independent service centers are increasingly competitive. 

So, what is the right number?  Actually, I don’t know.  Because we are so far from alignment, it is difficult to estimate the most economical place to stop.  However, I can suggest a way to determine the right level over time.  I once had dinner with a former Expedia CMO and I asked, “How do online businesses determine their marketing budgets?”  He stated Expedia didn’t have an ad budget.  In astonishment, I stammered “What do you mean?” My friend explained, he kept spending, so long as each dollar of additional marketing spend yielded three dollars of revenue.   Pretty logical! 

So, what would this look like in our industry?  Many dealers are perfectly fine spending $300 on a TrueCar lead which yields at best $1,800 front and back gross.  Marketing spending across the industry per new vehicle sold was $630 in 2016; or 33% of variable ops gross margin.  By this formula, you should be satisfied with an incremental service marketing spend that yields 10x in gross, up to $17k per month in service marketing. (The average dealer Service & Parts CP GP per month is $177k.) 

As a dealer, do you find it hard to image spending that much?  Well, isn’t that better than facing the harsh reality that stores continue to afford 75% service leakage as new and used vehicle margins continue to decline? 

Chicago, IL—October 9, 2017— Affinitiv, a leading provider of marketing and technology services to automotive manufacturers and dealerships, today announced it has been selected by Maserati North America as the exclusive aftersales marketing provider for its LUX owner retention program. The program is designed to bring customers back to Maserati dealerships for service after purchase of a vehicle, continue customer communications with multi-channel marketing and keep customers engaged throughout the ownership and re-purchase lifecycle.

“Our marketing solutions are strategically designed to build brand loyalty and to elevate customer perceptions' of Maserati dealership service departments compared with independent repair facilities," said Scot Eisenfelder, Executive Chairman of Affinitiv. "Our messages are highly relevant and personalized, demonstrating to customers that their dealership is committed to their satisfaction."

Affinitiv's end-to-end service marketing solution is driven entirely by data and advanced analytics, allowing dealers to send customers highly targeted messages at the right time on the right communications channel. Affinitiv's layered, multi-channel communications approach has been proven to increase reach and frequency, boost response rates, lower marketing spend and improve customer retention.

The Maserati LUX ownership retention program makes it easy for dealers to raise awareness of, and promote, their service department expertise as well as aftersales products like accessories and tires. Maserati North America's customers will receive consistent, timely communications regarding the handling and upkeep of their vehicles. This proactive marketing approach has been proven to build strong customer relationships and maximize dealership revenue.

Maserati dealers that enroll in the Maserati LUX co-op program are reimbursed 50 percent of their marketing cost. Maserati North America oversees the program and ensures that all design and messaging meets its corporate branding standards and guidelines.

In the past year, Affinitiv has continued to share its vision of creating connected customers for life with auto manufacturers. Currently a dozen OEMs are using Affinitiv aftersales marketing solutions to create loyal and repeat customers. Affinitiv's current OEM partners include BMW, Kia, Lexus, Chrysler, Volkswagen, MINI, GM, Porsche, Mitsubishi, Audi, Volvo, Rolls-Royce Motor Cars and Maserati North America.

Headquartered in Chicago, Illinois, Affinitiv has seven offices across North America and India, and employees more than 500 team members.

For more information, visit www.affinitiv.com.

About Affinitiv:

Affinitiv is a leading marketing technology company exclusively serving automotive manufacturers (OEMs), dealership groups, and individual dealers. Affinitiv enables its customers to produce, manage, measure, and optimize multi-channel communications to drive brand loyalty and increase revenue across the dealership. Affinitiv’s digital and analytic capabilities offer an end-to-end solution that supports a consistent experience across the entire consumer lifecycle. Affinitiv was formed through the strategic combination of DPS, Peak Performance, OneCommand, and TimeHighway.com. Affinitiv is headquartered in Chicago, IL.

When social media marketing burst on the scene nearly a decade ago, just about every dealership immediately piled onto the bandwagon. We didn't all know exactly what we were doing; we just knew we had to do it because everyone else was doing it. 

At the time I was with AutoNation and we spent a lot of money and time trying to figure out how to market our dealer brands effectively on social media. The biggest issue for us, and I believe for many other dealers, was the lack of attribution. It was impossible to identify exactly how many sales and service appointments could be tied back to a particular Facebook post or tweet. 

I remember one day I got into it with a Twitter guru who called me a Neanderthal for questioning Twitter's marketing value for businesses. I asked him how many retailers he follows on Twitter. He left me alone after that. 

Another issue was that social media experts defined success by metrics that mean nothing to auto dealers. The number of "Likes", views and interactions on a Facebook page doesn't have any correlation to the number of leads, appointments and sales that your dealership generates.  

Yet, the power and allure of social media cannot be denied. Hundreds of millions of Americans log into their Facebook, Instagram, Twitter and other accounts on a daily basis; often several times a day. Then there are the millions of businesses that have been hugely successful increasing their brand presence, reaching and connecting with new audiences on various social media platforms. 

As social media algorithms evolved, the use of organic postings to influence fans diminished, and the era of pay-to-play began. Your dealership can now display ads to targeted audiences and you'll get some basic metrics, such as how many people saw the ad and clicked on the ad. Granted, this is better than it used to be but how many appointments did that result in? What is your ROI? 

If you are a dealer who has been frustrated with the lack of attribution from social media marketing, take heart. I have good news because another evolution in social media is underway and it's going to change everything.  

This new era requires a shift from viewing social media as a unique medium that requires clever and funny postings, sharing viral videos and lots of friends in order to be successful. Instead, view social media as another channel through which you convey the same marketing messages that you are already doing successfully using other channels, such as email, direct mail, text or phone. 

But wait! I can hear the social media experts shouting already. Consumers don't like it when you try to sell to them on social media.  

This is true if you're trying to sell to customers who aren't in the market for a new vehicle. It's also true for customers who have no relationship with you at all. But it's not true for all of your customers, or for in-market vehicle shoppers. 

Let's say a customer purchased a vehicle from you a year ago and is due for their first 15,000-mile service. They may appreciate seeing a friendly reminder in their Facebook feed, along with an offer from your dealership for that exact service. 

Likewise, if Mary is in the market for a new vehicle and has been researching SUVs, she may respond to a gorgeous photo of a SUV while she's browsing Instagram. When she clicks on it, she is brought to a landing page on your website where she can view an inventory video or virtual test drive. 

This is the next evolution in social media marketing, and it's all possible now thanks to marketing automation technology and data analytics. Dealers can match customers in their DMS to social media profiles, track their online behavior and serve up automated, custom ads and offers to individuals at the exact right time in their buying or ownership lifecycle.  

The best part is the attribution. Dealers can attribute service ROs, vehicle sales, revenue and other activity back to specific ads that were displayed to specific customers.  

Finally, social media has grown up and joined the ranks of other proven marketing channels. For dealers that like to know the ROI of their marketing spend, it should be a glorious new era.