You have a percentage of loyal customers who buy multiple vehicles; consistently buy from your parts and service departments as well as supply referrals. Imagine for a second… a scenario where those specific customers start leaving you for your competitor without giving you any notice or even the opportunity to talk with them about their next purchase.

This happens more than you think in today’s automotive marketplace. On any given day you have a percentage of loyal customers who are in a position to buy a new or newer vehicle with no money down and actually lower their payment. These people exist not only with customers who have equity but also with customers who have negative equity. In your opinion what would happen if one of your loyal customers (who may not even think they are in the market for a vehicle) responds to an ad that just so happens to catch their eye from one of your competitors?

If your competition has the opportunity to show them how to upgrade their vehicle and improve their financial situation that customer is gone – possibly forever.

The real question is what does the customer now think of you? Regardless of great strides in customer service and sales processes, car dealers still don’t rank very high as the most trusted businesses by consumers. What happens when one of your best customers finds out they can buy a vehicle that is two to three years newer than the one you sold them, and actually do it for less? Customers will not understand all the scenarios that made that possible. More importantly to you, they will blame you for giving them such a bad deal the last time. From their point of view, how else could you explain it?

If today’s car dealer doesn't alert customers to this potential savings someone else will. And that just feeds right into the consumer’s fears and doubts.

Think about it; over the years there has been a strong effort with automotive direct marketing to improve customer loyalty. So with all the data mining, predictive models and resources available why hasn’t the percentage of loyal customers increased along with the investment to improve owner loyalty?

Are you focusing your attention on the wrong customers?

We tend to assume that the best prospect is someone with equity or someone close to his or her loan maturation date. In reality the best prospect is the person who is most motivated by your offers. Who is most at risk for buying somewhere else? The customer who paid off their car a few years ago and isn’t making a current payment or the customer who has a current payment and can actually buy a new car and lower it? This doesn’t mean you should ignore customers with equity or who have paid off their loan.  It just means we tend to not pay as much attention to people who may have bought eighteen to thirty six months ago with the exception of parts and service advertising.

The reality is the people who have the ability to upgrade their vehicle and improve their financial situation are the biggest defection risks you have – IF you don’t reach out to them first.

Today you have the ability to quickly identify and help your customers who can improve their financial situation as long as you have a good automotive equity data mining and lead generation strategy. This strategy must include direct marketing with a multi-channel approach. Direct mail and email must be completely personalized to the customer’s unique situation. It is not enough anymore to consider their name and address as personalization. To be effective with automotive direct mail and email today you must communicate a message that is one to one – not one to many. Microsites should be included to give the customer more opportunities to respond to you and obtain information. Telephone marketing and support is a must.

Today’s technology allows you to identify which service appointments can qualify for an upgrade and improve their situation.  This makes your service to sales process more efficient and effective.

You must have a turnkey direct marketing strategy in place to work with this data to guarantee that your customers know that they can improve their situation right now – from you. These people will not just come in on their own.  Many of them aren’t aware that these opportunities exist. It is your responsibility to reach out to them.

Related Topics and Links:

I’m Curious… Which Auto Auction Would You Consider To Be The Best?

Make Data Part Of The Deal

Automotive Marketing: AutoSuccess Cover bLinked Success Story

Do You Have A Direct Marketing Strategy For Connecting With Customers Before They Hit The Internet?

What Would Happen If You Prioritized Your Advertising Dollars On Leads That Are Easiest To Close?

Dealers spend a small fortune in time and expense buying and transporting vehicles from various auctions around the country.  How many of you consider your service drive an auction?  What would happen if you did?

Think about how hard it is to find 2008 through 2012 vehicles at the auction.  You have a steady stream of them pulling through your service drive every day.  What are you doing to maximize your opportunity with those customers and to obtain those vehicles for your pre-owned lot?

Your service-in-to-sales opportunities could be the most profitable sales process you install.  Imagine how many more cars you could sell simply by pre-appraising the vehicles from your service appointments and working up proposals for customers with your current inventory.  That means new high-quality leads every day. Done properly it could generate a steady flow of trade-ins for your certified pre-owned inventory.

There are tools out there to make this process easy and literally will work up numbers on every vehicle you have in stock.  For obvious reasons I am partial to bLinked and you can find more info at http://goo.gl/JWqNU .

My guess is that within two years every dealership will have some sort of automotive equity data mining and lead generation tool.  The service drive is the best source of leads, deals and future certified pre-owned vehicles a dealer has.

We all know that if we did nothing with advertising – no TV, radio, direct mail or email, there would still be a percentage of people that buy from us. There are some that would buy because they know us from our location, from their friends, etc. Of course it is a little more complicated than that because almost everyone does some kind of advertising. In addition, there are times we experiment or try new approaches.

So the real question becomes when you try these different approaches...

What is the real uplift it creates? What is the actual increase in sales or profit generated as a result of your advertisement? That’s the answer we really need to know, isn’t it?

There is a simple way to measure your success with email and direct mail. Regardless if you use mass mailings, segmented lists or decide to use data analytics to nail down your target list, you can do this simple test. Take your email or mailing list and pull out a minimum of 10% and use it as a control. That 10% should not receive the advertisement you plan to send to the other 90%. The goal is to see the exact ROI of the 90% you advertise this specific ad to; compared to your 10% control list that receives your normal communication message. For sales, measure the ROI over a 30-day period. For service, you will want to measure for 45-60 days depending on your offer.

"We would have sold or serviced these people anyways." How many times have you made that comment?

Hundreds of elements can be measured with direct marketing communications. An email or mail list, headlines, offers and creative can all be measured and need to be isolated to know the true impact each element has. But, to know from an ROI standpoint - did this advertisement provide more sales and profit over and above what you normally would receive… start measuring against a control list.

Below is a link to a very basic study we did using this control method that you can easily apply yourself.  Click on this link and go to the image at the buttom of the blog.

http://jandlmarketing.squarespace.com/blog/2011/4/16/how-to-measure-the-real-uplift-your-advertising-creates-or-d.html 

 

Over the last two and a half years we have become a preferred vendor for multiple OEMs for our proprietary service clinic program.  We feel very fortunate to be associated with such brands as BMW, MINI, Mercedes-Benz and General Motors.  Retention has been a focus point for dealers and the OEMs for a long time.  So why are the loyalty ratings and rention percentages almost the same today as they were ten years ago with so many dealerships using service reminder programs and various strategies to improve customer loyalty?

When we go around presenting our service clinic program it is rare when we don't hear, "We've done service clinics before," or "We do those on our own."   The words "Service Clinic" are two very over used words in our industry and not all are created equal.

In the end it starts with data analytics and finishes with the right training to make sure a dealer can maximize their profit potential.  Here is a case study from a dealer that explains why so many J&L OEM clients choose to co-op our program... http://jandlmarketing.squarespace.com/blog/2011/3/17/lokey-mercedes-benz-discovers-the-fortune-hidden-in-their-in.html

Data analytics has never been more important. In the (insert month) issue of AutoSuccess Magazine our lead analyst, Sowmya Iyer, authored a great article entitled, “‘Target Audience,’ ‘Narrow Down’ and ‘Right List’ are the Most Overused Phrases in Email and Direct Mail Today: How You Can Really Move the Needle with Your Direct Marketing.” I recommend reading it or requesting a copy. You can also read Sowmya’s article on the J&L Blog at http://blog.jandlmarketing.com/blog/2011/2/16/how-to-move-the-needle-with-your-direct-marketing.html 

1. Increase your number of active customers
2. Increase your average profit per transaction
3. Increase your customers’ repurchase frequency

• Referral systems
• Acquiring conquest customers at break even up front and make a profit on the back end
• Advertising
• Turning service customers into sales customers
• Running special events
• Using public relations

• Delivering higher than expected levels of service
• Communicating frequently with your customers to nurture them
• Improving your customer’s current situation.  You have hidden assets in your customer database where you can actually offer customers the opportunity to reduce their monthly expenses with no money down – regardless of equity.

• Increasing sales skill levels of your staff
• Making irresistible offers
• Educating your customers
• Gain control of your direction and destiny.  Stop blaming people and circumstances and take total responsibility for your numbers.

• Improve your team’s selling techniques to up-sell and cross-sell
• Packaging complementary products and services together
• Increasing your pricing and hence your margins
• Offer greater/larger units of purchase

• Advertise your service and parts department so your customers come back to you again and again
• Communicating personally with your customers (by telephone, letters, email, social media) to maintain a positive relationship
• Running special events such as “VIP days” “closed door sales” “limited pre-showings” and so on
• Pull-ahead programs by giving customers irresistible offers before their normal repurchase dates

1. How many customers do you estimate you could sell this year?
   • List two additional sales processes to supplement your current sources of leads and sales.
   • List ways you can use endorsements, referral campaigns, social media to more than double your “word-of-mouth” business.
   • List ways you can generate 20% more qualified leads – and then improve your conversion rate up to 40%.
2. What could be the value of an average purchase?
   • List ways you can insulate yourself from price competition and charge a premium that fairly reflects the quality of your dealership.
   • List ways you can package your products and services to increase your average profit per sale without sacrificing market share.
   • List ways you can convince just 10% of your clients to give you 100% of their business.
3. How many times could an average customer buy from you each year (for just front end sales – within a 3.5 year period)?
   • List ways you can structure strategic alliances to enable you to introduce other companies’ products to your clients (and vice versa).
   • List ways you can convince customers to make bulk purchases and commit to “standing order” agreements.
   • List ways you can cost effectively create one or more back end products that your customers will willingly purchase from you.