August 30th, 2010 | Written By: Melissa Hans
There are times when we all feel like we are simply scratching the surface of life—doing enough to get by but knowing there could be so much more. Perhaps you’ve been taking that approach to marketing your service department. You know you should pay it more attention, but at least it’s getting you by.
When I feel like this, it reminds me of a social studies lesson from middle school about subsistence farming. Subsistence agriculture is all about self-sufficiency—growing enough food to feed yourself and your family. In other words, just enough to get by.
When you are doing just enough to get by, you often fall back to what is comfortable, familiar or easy. You choose the cheapest and safest routes to advertise. Right or wrong, logical or not, your focus becomes that of a subsistence marketer, continually working with results being based primarily on the economic climate. This leaves you open to economic famine and the pestilence brought on by fierce competition that can wipe out your profit harvest
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Posted in: Best Practices
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July 27th, 2010 | Written By: Regina Green
As a service manager, you’re undoubtedly convinced of the importance of maintaining regular contact with your customers. It’s a critical function of marketing. You’ve probably seen a boost in sales from your mailers and e-mails, but you might wonder if there is more you could do to see an increased benefit from these marketing efforts. Conversely, is there anything you’re doing now that might undermine the effectiveness of your message once customers come into the shop? By taking some simple measures, you can ensure that when customers arrive, your service department reinforces the messages sent through your marketing.
Inform everyone on your staff about the mailer, including details about the offers and limitations. Your marketing partner will send you a packet of extra copies of the mailer, as well as a laminated copy to post in the service drive. Don’t leave that box in the corner of your office to get buried by seven other things before the week is out. Pull out those extra copies and share them with your entire service staff to ensure everyone is well-informed.
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Posted in: Best Practices, Customer Retention, Uncategorized
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July 1st, 2010 | Written By: Eric Johansen
October is Car Care Month, and maintenance for the upcoming winter weather should be a priority for prudent customers who treat their vehicles as long-term investments. According to RLPolk*, a survey of U.S. consumers shows 64% said they were “very or extremely likely” to keep their current vehicle longer due to economic conditions. Also, 81% of the 713 interviewed said they intended to take better care of their vehicles. Since the average repair order for older vehicles is about twice that of vehicles three years-old or less, this provides an opportunity to reach a segment of the market that has traditionally been relinquished to the aftermarket — a segment that can be very profitable.
A recent review of 18 months of data for a large midwestern import dealership group (119 dealerships) showed that over a 12-month period, repair orders for vehicles with less than 60,000 miles had an average amount of $137.00. Vehicles with over 60,000 miles had an average repair order amount of $277.00.
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Posted in: Best Practices, Segmented Marketing
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June 27th, 2010 | Written By: Eric Johansen
Automotive service managers are always trying to find the right combination of marketing tools and successful business practices to maximize profits. A dealership that has made a lot of wrong marketing and customer service decisions can be a challenge to turn around. Word gets out. So, how can a historically underperforming service department with a bad reputation be transformed into a champion?
One answer can be found in a success story that occurred recently in a southeastern U.S. market. There were two dealerships in close competition in the same metropolitan area. They had very different business philosophies and marketing plans that produced starkly contrasting results.
One dealership was an established business that valued the long-time relationships that had been built with their customers. They had a well-executed marketing plan that included mailers and reminder letters. They created value by consulting with customers and up-selling only services needed without regard to monthly sales goals. They knew that when their customers’ vehicles needed other services, those customers would be back. Their customer relations were as good as gold, and the repeat business was like money in the bank.
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Posted in: Best Practices, Customer Acquisition, Customer Retention, Marketing Plan
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June 3rd, 2010 | Written By: Chuck Patton
It’s time for a mid-year review. Remember the automotive service marketing objectives you put into place at the beginning of the year? How are they working for you? Are you on-track to meeting your goals? Are you ahead or behind where you wanted to be?
Depending on the answers to these questions, you may want to consider making adjustments to your marketing plan for the second half of the year. As you take stock and plan your next six months, consider the following areas of opportunity upon which you can capitalize.
Retention—The retention measurement that makes the most sense is the one that measures the share of your customers’ business within a year. Start by separating your customers into the following categories:
- Number of times your customers have come in during the past 12 months
- Number of customers doing all their service with you
- Number of customers added in the last 12 months
What are you doing to retain your customers? Are you providing the best service in the market and going the extra mile to keep your customers happy? Consider loyalty programs and perks to show your commitment to a long-term relationship.
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Posted in: Best Practices, Customer Retention, Direct Mail, E-mail Marketing, Marketing Plan
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June 2nd, 2010 | Written By: Eric Johansen
In today’s competitive automotive service industry, it has become more difficult for dealerships to compete with the aftermarket. In order to attract and retain customers, a service manager needs to close the gap between the cost at the dealership relative to the often-lower aftermarket price by increasing the perceived value of his service experience for the customer.
One way to boost the perceived value of the dealership is to use direct mail with cost-competitive coupons. Dealers find coupons to be very effective in reducing negative perceptions about the added cost of the dealer’s service.
In addition to marketing initiatives, there are many simple behaviors you can start today that will instantly showcase your value—and they don’t cost anything to implement. They involved common courtesy coupled with a desire to make the customer’s visit as pleasant and unencumbered as possible. People like to feel that they are important to you, especially when they spend their hard-earned cash.
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Posted in: Best Practices, Branding
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May 27th, 2010 | Written By: Melissa Hans
Challenge
To increase customer frequency and revenue through a cost-effective, targeted marketing program for a group of dealerships in a northern Midwestern metropolitan area.
An average dealership has 63-70% of their customers coming in only one time per year. So out of every 10,000 customers who have serviced with a particular dealership, roughly 7,000 serviced only one time within the past 12 months. Bringing back only 20% of these 7,000 one-time customers a second time could potentially mean $252,000 in additional revenue in a year.*
Since most surveys indicate that keeping an existing customer is five to seven times more profitable than acquiring a new one, it’s obvious that luring back customers who are already familiar with the dealership is a cost-effective way to get more for your marketing dollar.
Solution
Extend an aggressive offer to lost customers in order to entice them back.
Every month in 2009, a group of seven dealers participated in group-focused lost-customer postcard campaigns. The dealers all serviced the same manufactures, so they pooled their resources to win back customers who were no longer getting regular service.
The group-focused postcard campaign drove down production costs for each dealer. The mailers invited customers to redeem cost-competitive coupons at any of the listed dealers. Customers could either find a new dealership nearby or give their original dealership a second try. This created options for the customer, which is helpful in competing with the aftermarket. The main focus of the postcard was to grow the total market. That results in everyone winning—including the customer.
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Posted in: Case Study
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May 20th, 2010 | Written By: Melissa Hans
Challenge
It is harder than ever to generate the same revenue from parts and service customers. Vehicle quality has consistently increased over the last decade, and preventive maintenance needed for these models has been reduced. Even oil changes have become less frequent—with the introduction of synthetic oil blends. The bottom line is that it is difficult to identify the right marketing plan to increase your service department’s gross profits and year-to-year sales. Where can we find a market opportunity to drive in customers?
Approach
Over the years, dealerships have emphasized new car sales and service. Some have forgotten the older model vehicles. What would be the result if we specifically targeted those older-year models, and how would that affect the dealer’s profitability? Perhaps service managers should rethink the paradigm of their primary market being the servicing of new vehicles. This shift in focus could boost the dealership’s profitability during more difficult economic times.
By increasing the scope of your promotion to include older models, you could bring in vehicles needing more service than vehicles half their age. Also, these older cars will need parts that are more expensive and require higher labor charges. This combination will increase the average amount of the dealership’s repair orders—making the dealership more profitable.
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