CEO & Executive Chairman Scot Eisenfelder explains the importance of revenue yield to dealerships in service.

According to the 2017 JD Power CSI survey, only 13 percent of consumers scheduled their vehicle service online. The progress toward online scheduling has been glacially slow, rising only two percentage points over the past three years.

This is despite the fact that nearly all dealerships now have an online scheduler and most service reminders are digital. Online scheduling usage is particularly poor when compared to travel where 75 percent of airline reservations are booked online and 49 percent of airline check-ins are performed digitally.

The same JD Power survey suggests nearly half of the consumers not scheduling online are “unaware” the option to schedule online exists. So, the natural tendency is to focus on raising awareness by showing the online scheduling application during delivery or sending specific communications about online scheduling.

We should do a better job promoting online scheduling, but I do not believe “awareness” is the root cause of non-usage; inadequate value is. The bigger issue is that online scheduling has too little impact on the service experience, as evidenced by online scheduling users are just two points more satisfied than those scheduling the traditional way, on a thousand-point scale.

After initial launch, the airlines did not have to separately market their websites and apps because those capabilities improved customer service and spread virally. Why is that? The airlines’ solutions made the consumer experience substantially better.

Why is this not happening in automotive? It’s because we are grafting digital capabilities onto an analogue process. What benefit is the customer getting for booking online? Preferred appointment times? Shorter or more informed write-up process? Perhaps bypassing the service write-up all together? Not a chance! In fact, according to the JD Power CSI study, online schedulers are no more satisfied with service initiation than others.

Imagine if you checked in for your Delta flight this morning on your Delta app, but then you still had to wait at the ticket counter before boarding your flight. If this were the case, you would probably not use your Delta app. So why do we make consumers wait for service advisors?

One reason is so the service advisor can capture more information to help diagnose the problem. The second is to “upsell” more service. Other industries have successfully applied technology to address both. Chatbots can ask and respond to a multitude of customer issues. Think Alexa. In addition, Amazon has conditioned consumers to upsell themselves through highly relevant “people like you” suggestions.

Deploying similar technologies, dealers could clear the 7am to 9am bottleneck and accept vehicles when it’s most convenient to the customer. Additionally, they could increase service revenue by allowing consumers to make informed choices without perceived sales pressure.

Another major issue limiting online scheduling is that many dealers, afraid of competitive shopping, do not post prices online. So, they expect customers to schedule for a service when they don’t even know the price. Again, an analogy from elsewhere in the digital world. Would you order your Dominos pizza, if you went to check out and had no idea what your large Hawaiian pizza costs?

You can’t really expect a customer to schedule a 30,000-miile maintenance when they don’t know the price. Do you think a customer would use the Dominos listed pizza price to competitively shop Papa Johns? Of course not! Neither would most consumers on dealer service pages.

When customers click through to your online scheduler, they are trying to do business with your service department. If you make the process more informative and the gateway to a more convenient service experience, customers will respond by scheduling online more frequently. Not only that, but they will inform their friends about how to get better service. Before you know it, online scheduling for dealer services will go viral.

Affinitiv CEO & Executive Chairman Scot Eisenfelder explains why omni-channel marketing is so important for results in today's marketing strategies.

We are in a new era; one in which dealers make most of their money on the service side and not in new vehicle sales. Yet, as an industry we still spend far more money marketing the sales side of the business, and on conquest marketing, than we do on service marketing and customer retention.

Some dealers justify this by saying that sales drives service business. I would argue that equally, service drives sales business. When customers service with you, they are two-and-a-half times more likely to buy their next vehicle from you.

Yet, service is where most customer defection occurs. If you can plug the holes in your service bucket, you won’t have to pour as much water in the top. Here are a few strategies that will help.

Invest in the Relationship

We all know the goal is to develop a relationship with every customer, but what does that mean?

Your relationship with your customers is not defined by how you treat them. At the heart of every relationship is communication. How well are you communicating? Even more important, how well are you listening?

Effective communication is a two-way street. As dealers, we send out communications all the time. But, how much communication do you receive from your customers? Do you ask their opinions? Do you pay attention to which offers they respond to? Do you track how and when they are consuming your messages?

In any relationship, you must learn how to communicate. I believe in Omni-channel, using all available channels to relay messages. Studies in advertising have shown that it can take four or five impressions before the message sinks in and the person responds.

The same thing happens with personal communications, too, right? Your spouse may ask you to do something once, but you don’t do it. After hearing it several times, however, it begins to sink in that this may be important and you should probably do it.  

Perhaps more important than the means of delivery, is the message itself. When you do communicate with your customers, don’t always try to sell them something. A relationship is not all about you!

Customers want information and they want to feel appreciated.

Keep your customers informed about their vehicle and their service needs. Educational messages will generally be better received than a 10 percent off coupon. Tell your customers how to reset their clocks, how to use the features in their vehicle, how to pre-set their seats.

Also, be sure to thank them for their business. Some luxury dealers do a great job at this; I know one BMW dealer that sends their customers movie tickets as a thank you for service. If a customer brings their car in twice a year and you are not showing your appreciation in some way, that customer is vulnerable to defection.

These are not difficult things to do; not that time consuming or expensive. Invest in your relationships by investing in communications.

Improve the Customer Experience

A good experience is a smooth, efficient experience. When a person shows up in the service lane, be prepared. If you have a scheduling system, you have the opportunity to know what your customers’ needs are before they show up.

The check-in process should take no more than two to three minutes, and it should be entirely focused on the customers’ needs.

As a dealer, you have the opportunity to create an experience that’s better than an independent chain. You have a more comfortable waiting room, better amenities and loaner cars. Don’t think of loaner cars as an expense; think of them as a strategic asset. Loaner cars are not expensive, what’s expensive is not getting the service.

Focus on value over price. Somehow, in your communications and during the in-store experience, you must find a way to sell value over price. Your dealership may be a little more expensive but your technicians are trained. Your manufacturer parts will last X months longer than a non-OEM part. Better parts and service lower the average cost of ownership, over time.

Only Sell What Your Customers Need

When I was at AutoNation, we estimated that we only captured half of the average customer’s service needs. There is enough work to be captured and done on vehicles without selling gimmicks.

By gimmicks, I mean things like radiator flushes and nitrogen to fill tires. Customers don’t need that. They need tires, brakes and windshield wipers. I realize these jobs don’t produce a lot of revenue. But it’s not all about today. Keep the big picture in mind. Earn your customers’ trust and when they do need engine and transmission work, they will bring their vehicle to you.

It really comes down to getting to know each customer and showing them respect. Do your service advisors view each customer as a welcome friend, or as a means to get their monthly bonus check? Focusing on monthly revenue goals can hurt long-term revenue potential.

These strategies can help plug the holes in your service bucket and prevent customer defection. You’ll find that by investing more in your current customers, you won’t have to spend quite so much trying to attract new ones.

Affinitiv CEO & Executive Chairman Scot Eisenfelder explains why single attribution is a fool's errand in this video blog.

So much of the conversation in automotive marketing today is focused on how to leverage technology and data to precisely target consumers. While this is important, it’s just as important to remember that creative still matters.                 

After all, you can serve up the exact right message to the right person at the right time, but without a compelling image or copy, the consumer will simply ignore it, or scroll right by it on their phone.

When it comes to creative marketing, I find that most dealers fall into one of two categories: (1) the dealer who is content to ride on the manufacturer’s creative coattails, and puts very little time and effort into creative campaigns for their own brand, and (2) the dealer who loves to be creative and comes up with cute or funny campaigns that, unfortunately, may stray quite a bit from the manufacturer’s intended brand image.

Striking a balance between these two extremes is the key to successful marketing at the dealership level.

So, what’s the best way to achieve this balance and how can you differentiate your brand to capture consumers’ attention? Here are some tips.

Less is More

No matter where your marketing message is seen today, you have a very limited amount of time to get your message across. Don’t cram two messages into one ad, or overly use adjectives. Don’t tell the consumer what you want them to feel. Your ad should make them feel it.

The same rule applies to photos, videos and other images. If you are displaying a photo of a vehicle, there’s no need to add starbursts or other special effects. The vehicle is enough. Keep your images and messages simple and clean.

Maintain Brand Integrity

There’s a reason why auto manufacturers spend hundreds of thousands of dollars on focus groups and research, and hire really expensive ad agencies to help them create their brand images. They are the experts, so trust their expertise.

If you’re a Porsche dealer, you’re not going to send out Christmas cards with puppies on them, right? While nobody can debate the cuteness of puppies, they just don’t fit with Porsche’s image.

So, before you decide to shoot that TV commercial wearing a giant Stetson cowboy hat, consider if the image you are presenting is an appropriate representation of your manufacturer’s brand, and whether it would appeal to your intended audience.

Stand Out

As a dealer, you definitely want to emphasize what you can offer that differentiates your store from others. Whether it’s free loaner cars, experienced staff or a smooth process, give local customers a reason to buy or service with you.

Just make sure that what you’re advertising is genuine to the experience that customers will have when they visit your store. There’s nothing consumers hate worse than a bait and switch.

Stay Local

If you want to get creative with your campaigns, try incorporating local nuances to engage consumer attention. Local imagery can evoke feelings of pride and loyalty.

If you’re in Brooklyn, a picture of a vehicle parked with the Brooklyn Bridge in the background may be the right choice. If you’re in southern California or Florida, sun and palm trees may be the perfect backdrop. If you live in Hawaii, wouldn’t it be odd to see an ad featuring a vehicle on a snowy mountain road?

Tailor Your Message to the Medium

Let’s say you want to promote a seasonal sale event. Because you’re a savvy marketer, you leverage your data and you decide to create an marketing campaign that includes radio, direct mail, email, display ads and social media.

Your creative message should be cohesive across all channels, so your intended audience knows exactly what you’re promoting. Yet, how you deliver that message is going to be quite different depending on the channel.

Facebook has canvas ad that allow for multiple images. Videos also play well on Facebook. For social, your images have to be thumb-stopping stunning. With ads, a simple image or a few words may be the best approach. On a postcard, you may want to incorporate spot gloss to help your piece stand out.

When it comes to building your store’s unique brand, do not underestimate the importance of creative in marketing. Remember that the quality of creative in a campaign is far more effective than strategy alone at raising brand awareness and driving sales.

Scot Eisenfelder shares what he believes the right marketing budget for service should be for dealerships.

Recently Facebook announced that it will stop using data from third-party data aggregators to supplement its own data that it uses for ad targeting. What does this mean for car dealers?

Until this announcement, Facebook collected data from three sources which it used to accurately target its users with ads. These sources were:

• Facebook’s own data, which it collects from user activity and profiles. For example, Facebook can track which users visit or “Like” certain auto manufacturers’ pages. So, if a Facebook user visits a competing dealerships’ page more than once, you may want to target them with an ad to raise awareness for your dealership brand.
•  Your dealership’s data, such as customer emails in your database and loyalty programs. For example, you have a list of all your customers coming off-lease in the next three to six months. Facebook can match customers on this list with its users, allowing you to target them with ads promoting lease renewal options and specials.
• Data from third-party services. For example, Facebook had access to vehicle registration data so it could identify all owners of Toyota Scions. This was helpful to dealers who might want to target all Toyota Scion owners in a defined radius so they could serve up ads and special offers for service and repairs.

So, what happens now that access to the third-party data has been eliminated?

First, initial reports suggest Facebook third-party audiences won’t be removed until September 30th. This gives dealers time to refine their strategies (and time to enjoy results from targeted summer service campaigns).

The good news is that you can still use the data collected from both Facebook and your own database to build new audiences and increase engagement with the best audience that you have—your own customers. Collectively these are referred to as first-party audiences, because your data and Facebook’s first-party data is used to target them. 

First Party Audiences on Facebook
This is your most captive audience and one worth paying special attention to. If you effectively take advantage of its value, you won’t bypass countless opportunities to connect with, retain and even win back customers. There’s a reason that more than 65 percent of marketers believe that first-party data provides the best path to understanding customers. This data is a gold mine, and that advantage can not only make an impact to the success of your marketing efforts, but to your bottom line.

The data to target these audiences is collected from actual interactions that customers have with your dealership across a vast array of touchpoints, both historical and in real time. This data can also be used to predict consumer behavior with a high degree of accuracy; for example, as customer interaction wanes, the likeliness of defection increases. Campaigns targeting these customers based on specific behaviors can help increase customer retention rates.

Not only that, but you own this data, so it doesn’t cost you anything. This makes advertising more cost-effective than advertising with third-party data. Finally, and most importantly, due to privacy debates currently taking place and the questionable future of third-party data, your first-party data is safe.

This data can be used to target several categories within first-party audiences, including:

Custom Audiences
A custom audience created from a customer list is an audience made up of your existing customers. You can target ads to this audience via Facebook, Instagram and Facebook’s Audience Network, a display ad network that allows you to extend reach by displaying mobile ads through a number of apps and websites.   

Communicating with this group, which could include people who are in your database or who have visited your website, helps you stay top of mind as well as build trust and customer loyalty.

Lookalike Audiences
By focusing on this powerful segment, you are able to build audiences based on people similar to your customers. This is particularly helpful when your strategy focuses on building brand awareness and introducing new prospects to your business and capabilities. If your goal is a conquest strategy identifying target consumers across Facebook and Instagram, this is the way to go.

Unique insights are gained from other marketing efforts across Facebook, greatly increasing the chance of your message resonating with the right people who are most likely to take action.

Core Audiences
No one knows your customer better than you, but by segmenting your audiences based on distinguishing factors, you’ll discover those most likely to be responsive to your messaging.

Core audiences are created using the following data types:

• Demographics – age, gender, relationship status, education, workplace, job titles and more
• Location – target key local areas or set a radius around your store
• Interests – drill down into hobbies, preferences or favorite activities
• Behaviors – purchase behaviors, device usage, etc.

The ability to identify core audiences allows you to further refine your custom and lookalike audiences, as well as a strategy to target them. This greatly increases your ad campaign engagement and results.

So, be wary of marketers that downplay the importance of Facebook. The good news is, there are still ample opportunities to use Facebook to be heard by your most important audiences and drive key, responsive customers to your door. Best of all, Facebook provides you with detailed metrics for all of your ad campaigns, so you can measure ROI and determine how well it’s working for you.

If you have flown recently there are two inescapable and related facts: (1) nearly every seat is full and (2) nearly every seat is priced differently. This is because airlines realize that planes taking off with empty seats represents lost revenue that will never come back. Our service bays and technician time are pretty much the same – idle time is revenue lost forever.

So, what can we learn from the airlines?

First, airlines focus on revenue yield, not average price (aka “effective labor rate” in our lingo). Airlines are keenly aware of how many seats are unfilled at any time and understand the general relationship between unfilled seats, time until departure and price. 

Similarly, service departments need to predict excess capacity far enough in advance to act. To accomplish this, an appointment culture is needed with consistent reminders to reduce unscheduled downtime. For each appointment, be sure to load advisor and technician capacity, so you can understand potential leakage. This allows you to analyze the relationship between scheduled visits and actual work performed a week or more in advance. Over time you will learn which leakage points are chronic, happen nearly every week, or episodic, unique to a particular week.

When airlines forecast unsold seats their first effort is to expand reach by advertising in more channels bringing on distributors with lower net revenue yield or higher cost per impression. Dealers should do the same.

 You can redouble efforts to reach inactive customers or missed appointments or use more expensive, higher response rate channels such as phone calls to chase non-respondents to fill specific open slots. Be willing to spend a little more to fill forecasted unused capacity because the cost is small compared to an unutilized technician hour. Expanding reach should be used for chronic and episodic unused capacity.

As the departure times approach, airlines start discounting more aggressively and very selectively. In general, I am not a proponent of heavily discounting service, because for most new vehicle owners, convenience trumps price. Therefore, I would recommend offering loaners, Uber vouchers or concierge service to entice consumers to service at less convenient times.

Discounting may be more effective to fill chronic unused capacity, for example late midweek afternoons; thereby creating a “blue plate special” for consumers with more flexible hours. Discounting can also be effective to drive new behaviors, such as supporting expanded weekend or evening service, until new habits are formed.

Maximizing revenue from your UIO, also means maximizing revenue from your available capacity. We all have some opportunities to learn from airlines regarding yield management.

When consumers search for vehicle service options in your area, does your dealership’s website appear on the search engine results page (SERP)? For most dealers, ranking organically for search terms is difficult because their websites are optimized for sales and not necessarily for service. Additionally, it’s difficult to compete with aftermarket service centers that have websites filled with pages of service-related content.

The best way to ensure that your dealership appears in search results is with pay-per-click (PPC) campaigns designed to rank for service search terms. If you’re wondering whether display ads may be a better option, it depends on what your goal is.

PPC vs. Display
Search/PPC campaigns capture customer attention at the exact moment they show intent. Campaigns are optimized to pull consumers into the business. Meaning: the customer seeks out your company in an online search.

Display advertising pushes content to the user and is better suited for brand awareness. In our experience, display ads seem to work best as part of an omni-channel approach and can significantly boost response rates for the overall campaign. For example, if you’re promoting a spring service special using email, mailers and social media, adding a display ad campaign will improve overall campaign results.

Ideally, a strategic display campaign will fuel your PPC advertising efforts with people converting from general awareness to intent. But, if you're just starting your digital service marketing strategy, we recommend starting with PPC and applying any remaining budget to display. After all, PPC campaigns connect you with your customers that are closest to their purchase decision.

Setting up your PPC campaign
PPC service campaign management works best when coordinated with your sales PPC efforts. When running search marketing for service, negative keywords should be applied in the sales strategy to prevent bidding against yourself, thus driving up the cost.

Before you start running PPC campaigns, check with your website and marketing vendors to ensure you don’t have any current PPC campaigns running that might overlap with new campaigns you set up. It's against Google's policy to let you run two campaigns going after the same search terms.

To ensure your ads show up in all relevant searches, your service PPC campaign should include search terms for services, brand services, parts and accessories.

Your ad content should be straight to the point. Consumers need to see your dealership name, the name of the service they were searching for and a price. Include a statement encouraging consumers to check out all your service offers and to schedule an appointment online.

Prepare for Landing
Link the ad to a landing page that features appealing visuals and your service department’s value propositions. One effective strategy is to create a chart comparing all the benefits that you offer and independent chains don’t.

It’s also helpful to have three or four strong service offers for the consumer to select from. Think beyond oil changes to wheel alignments, 20 percent off coupons and A/C performance checks. If your goal is to fill service bays on Wednesdays, include a “Wednesday-only” offer.

Be sure to include a link to your online scheduler.

Data Analysis is Key
Once your campaign is underway, analyzing performance is important. There may be keywords that trigger a lot of impressions but not very many CTRs, and vice versa. Knowing how to optimize your PPC campaign is critical for keeping costs in line.

• With PPC campaigns the primary metrics to monitor include:
• Number of clicks
• Impressions
• Average Daily Impression Share
• Click Through Rate (CTR)
• Average cost per click
• Average position
• Conversions

For each of these metrics, your service marketing vendor should be able to provide you with average benchmarks for your location and your brand. Metrics vary widely depending on a number of factors.

The vast majority of consumers search for vehicle services using their computers or mobile phones. Dealers can’t afford to sit back and let aftermarket service centers claim the top positions on SERPs. Claim your digital real estate and move from lost to found with a targeted service PPC campaign.