August 23rd, 2009 | Written By: Chuck Patton
In a national press release published in March, the AAIA (Automotive Aftermarket Industry Association) reported vehicle repairs cost an average of 34% more at a new car dealership than at independent repair shops. They argue that this is leading to 11.7 billion dollars of excessive costs annually to consumers. Foreign nameplates were even higher than that at 36.8 billion. The same argument is being made once again. The dealerships cost more! But this time they are making the argument in the middle of a recession when everyone is listening to how they can get more for less.
The new angle on this old argument is that now the excessive cost gap is predicted to become one of the widest in history. Consumers are looking for cost alternatives to address the economic woes and the aftermarket “low-cost” brand is the mindset of your current and perspective customers, like it or not. How do you plan for this impact when your service department is currently knee-deep in issues? Internal work and warranty is down, cars don’t need servicing like they used to and the pressure is on for you to handle the burden of the decrease in dealership profits.
Read Full Post »
Posted in: Best Practices, Group Programs
No Comments »
August 15th, 2009 | Written By: Chuck Patton
Retention might be the single-most overanalyzed but underachieved goal in the automotive market. We spend thousands of dollars per month to drive in the same customer today who bought from us yesterday. The definition of retention is open for interpretation, as is the approach to address it. But have you ever really drilled down to the core of the word retention and asked why it is important to your business?
The definition of retention, as given by Random House, is simply to keep possession of or to continue to hold or have. The bottom line is to understand that retention is profitable… very profitable. So much so that every automotive dealership should make it priority one. Your goal should be to create a process that earns a larger share of customers over the long –term and not simply a share of the market in the short-term. If you are on pace for the long haul, you will still see a lot of short-term benefits. You must approach one customer at a time and feel confident that they are your customer for life.
The direct marketing business always discusses repetition or frequency as a means to retain a customer. Retention does not just mean you reach out to your customers a lot or mail a lot. It also means you have a consistent, simple brand message that resonates in your market. That message must appeal to your market, and brand your dealership over any other. The predominant message in the automotive world is price, price and price, especially in the service department. However in your business model, you have been constructed to be more focused on value and quality but your marketing may not be conveying that to your customer.
Read Full Post »
Posted in: Best Practices, Customer Retention, Direct Mail, Segmented Marketing
No Comments »
July 10th, 2009 | Written By: Chuck Patton
Are you ready for the big meeting? Or, have you already had it?
‘What big meeting?’ you say. The big meeting when the dealer principle or general manager comes into your service office and tells you that times are tough, and that you need to majorly cut your budget. You planned on using the scalpel, and instead, are required to use the axe. You say, “Hey wait, my department is doing better than any other, and I am the only one driving in traffic to the store.”
Traffic Builders has the privilege to work with many owners and GMs who truly support their service departments and value the impact they make. We also have many other service managers who say that upper management leaves them alone, never steps foot in the back or knows nothing about the service department. For many years, that may have been a good thing, but in today’s market that reality is gone for most dealers. As a leadership team, all departments must support each other even if it requires a short-term sacrifice.
All is not lost, though. You can prepare for a logical discussion on why you should strategically cut and not make sweeping changes. This simple list will get you ready to have a strong, effective conversation to show your strategy to continue to grow your business without cutting out strong monthly traffic.
Read Full Post »
Posted in: Best Practices
No Comments »
