A Ford dealership, in a top 25 market, wanted to avoid its service being viewed merely as a commodity. Service marketing here had been Ford-focused with no real difference between the national brand and the individual dealership. The dealer had a reputation for quality expert service, but this wasn’t able to be communicated in their manufacturer-crafted marketing. Even though they did not have the newest facility or amenities, they felt their highly skilled, friendly technicians knew how to project value and confidence with customers.

Similarly, this dealership wanted a marketing partner who shared their personal-touch philosophy. Other marketing companies they had worked with in the past were absentee and difficult to work with. Furthermore, the service manager wondered how someone who had never visited his dealership could really help him improve repair order traffic. He wanted a marketing partner who would manage his service advertising effectively so he could spend his time with customers on the service drive.

Approach

Traffic Builders began by performing a Database Diagnostic^™.  Customer segments and behavior along with previously uncovered marketing opportunities were identified. A unique dealership-specific strategy was crafted including a series of messages intended to touch the entire database of customers and improve return-on-investment. Immediate opportunities were addressed through service reminder letters, declined-service letters, direct mail promotions to regular customers, and the use of Ford co-op.

Working very closely with the service manager and the service advisors, Traffic Builders identified the key attributes of the dealership that enticed loyal customers to bring their vehicles in for service as well as a couple of misconceptions that kept some customers away.

Keeping Loyal Customers Loyal

We overhauled their service reminder letter program to improve its effectiveness and further the dealership’s brand position of “quality people providing quality service.” A picture is worth a thousand words, so we incorporated as many dealership-related images as possible. Photos of the dealership provided the immediate recognition of this long-time landmark facility. And, most importantly, photos and the personal signature of each of the service advisors provided the personal touch with which consumers connect.

In addition to the standard recommended service letters based on mileage intervals, we began mailing thank you letters to every customer who purchased a new or used vehicle from the dealership introducing them to their service advisor and inviting them to the service department for accessories and any necessary maintenance. This helped the dealership improve their retention rates.

Another key addition was declined-service letters following a customer’s visit. According to the NADA, nearly 40% of consumers decline some service each time they visit a dealership. We had to address this segment in order to further the advisory relationship and reinforce the dealership’s service value for a next service visit. By mining the database for this new information, the service advisors were more connected to their customers, and Traffic Builders created an opportunity to increase dealership frequency-of-visits and recover service previously viewed as a final declination of service.

This is where Traffic Builders’ experience and commitment to our client’s success came into play. Declined-service letters only work if the service advisors enter notes about the customers’ needs within the database. To encourage and promote this practice, Traffic Builders provided training for the service advisors as well as visual prompts for each service desk to serve as reminders. Monthly results reporting included a synopsis of the number of declined-service letters written by each advisor as well as the results and amount of revenue associated with those letters. Seeing tremendous gains in revenue and increases in their personal income meant the service advisors were more than happy to enter this information with each repair order.

Direct Mail Communications Overhaul

A customized communication plan was projected for six months. Each communication was analyzed by dialing back into the system to match customers in the mailing to customers who came in during each promotion time period. Our REV^® reporting allows our marketing team to not only analyze valuable information but also adjust each new marketing message to continually improve return-on-investment and refine the marketing message to each audience.

Segmented communications served several important purposes:

• Reinforced the brand
• Communicated value with a highly competitive price
• Established the dealer as “quick” and “convenient”
• Gave the dealer visibility with customized name recognition
• Positioned the dealer as a valued information resource
• Took advantage of co-op dollars

As industry veterans, we recognize customers bring (or don’t bring) their cars to dealerships for a variety of different reasons. Consumer surveys show they choose aftermarket service providers primarily due to perceptions that the dealership is inconvenient and expensive.

To address these perceptions, our client added a QuickLane^® to their offering, and we created a direct mail postcard highlighting this convenience and a separate mailer sent only to Ford customers.

Additional information derived from the Database Diagnostic^™ on their non-Ford customer-base suggested a female demographic, so our artwork was geared toward women and families.

In marketing to this dealer’s long-time loyal Ford customers, a large portion of whom were over 60 years of age, our message appealed to their desire to take care of their cars, save fuel and extend the life of the vehicle. Our direct marketing focused on quality and the staff’s tenure, positioning them as trustworthy experts in automotive service. Our design was unique, similar to a printed newspaper – a trusted source of information. We used this design to create a regular mail piece where the dealership could provide additional information about their staff, tips for fuel economy or tips for safe driving.

Results

The dealership management gained new knowledge of their database, received a customized direct marketing strategy and plan to execute, had a customized identity incorporated into their marketing, and highlighted service features previously unknown to their customers. Service advisors were more proactive and engaged in marketing.

• The QuickLane^® postcard created a steady flow of customers.
• The newsletter-type mailers increased frequency among loyal Ford customers, attracted older model vehicles and positioned this dealership as a reliable source for service.
• The dealership experienced tremendous growth in the key areas of focus we incorporated into their marketing.
• Their average repair order increased 10% and their overall RO count increased 10% as compared with the previous year.

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.

Results

The results showed a higher-than-average response:

The group had an average response of 4.11%. Lost-customer postcards typically have, by comparison, a 2-3% response. The average repair order for these returning customers was $182.25—significantly above the average of $150 per RO. Our group grew their market by 1.59%. The combination of brand awareness, cost containment and providing choices for consumers is a winner in the marketplace.

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.

A Database Diagnostic™ report for three Midwestern import dealers showed the gross revenue for the most profitable model years. All labor and parts dollars were analyzed to account for the lack of warranty work on older vehicles and the lack of customer-paid work on the newest models. The goal was to have yearly totals in order to do a trend analysis to find the model years of vehicles with the greatest sales opportunity for the service department. The recommendation was a direct mail and e-mail promotion to reach owners of older-model vehicles.

Results

The data for the 8- to 10-year-old models shows that the average repair orders for those years have the highest value of all year models. The higher average repair order (RO) amounts show the market potential for this otherwise forgotten group. In fact, the average RO for vehicles 8- to 10 years old was consistently twice that of those up to 5 years old. While it is true that older vehicles come in somewhat less often, this fact is negated by the large dollar amounts they represent once they are at the dealership.

Looking at the chart below that shows annual gross sales, one can see that years 8-10 provide 35% of all gross revenue. It is worth mentioning that they achieved a similar amount of revenue with fewer visits.

Summary

The tight marketplace requires that service managers think out of the box when defining their market and their customers. Sometimes it pays to challenge industry standards and look at your data as a way to direct  marketing decisions. According to our research, dealers should be using direct marketing to reach customers with 8- to 10-year-old vehicles. The dealer could make three times as much or more by servicing an 8-year-old vehicle as opposed to a 2-year-old vehicle. An older-model vehicle target approach could boost gross sales by creating programs to target vintage vehicles with price-competitive coupons. One strategy would target only older vehicles. Another would be to target all potential customers regardless of UIO.

According to a recent study by the Automotive Aftermarket Industry Association (AAIA), 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.

A large import dealer located in the southern United States decided to address the issue of being cost-competitive­—without sacrificing profitability. The first part of his challenge was to utilize a cost-efficient means of keeping his name in front of customers and enticing them back into the dealership, despite perceived higher cost.

The second part of the challenge was to retain new customers. Being cost-competitive is great, but really showing the value of the dealership is the key to turning one-time customers into regular customers. What value proposition could the dealer create that would justify perceived higher cost?

Approach

The dealer sent a mailer offering a $19.95 oil change. The shop is the number one store (of that particular manufacture) in that region in paid-customer work. On subsequent mailers, the dealer continued to offer the $19.95 oil changes. To sweeten the deal, he chose the rock-bottom price of $9.95 to put on a lost customer postcard, which was mailed at the same time as a regular mailer that featured the $19.95 oil change.

(Customers are considered to be lost when they have not visited the dealership in 24 to 36 months.)

To overcome the second part of our challenge, the difficulty in retaining customers, the dealer turned his focus to branding his dealership as having great value and strong personal interaction. This dealer has eight technicians, most of whom are master technicians. Each technician performs an oil change and a multi-point inspection. If he sees a problem, he assumes the role of a consultant and shows the customer. He will either take the part up front or pull the car around. Allowing the customer the courtesy of a visual inspection and presentation of damaged parts/systems fosters credibility. If the technician can tie the work to performance or safety concerns, he will further increase the likelihood of an upsell.

Side benefit: The customer can gain exposure to the entire dealership and perhaps that customer will buy a car from the dealership in the future. The relationship begins at your service department and the goodwill continues.

Results

The dealer brings in over 10 million dollars in revenue per year. His one-time customer visits are high (which is true of each dealer in his region), but the number of customers who visit five or more times per year is still higher than his competitors’ in the region. In one case, his average of customers who visit five or more times is almost eight times as much as another dealer. In fact, his customer count, number of visits and revenue are all highest in his region.

The challenge was to create a larger and more unified market presence for multiple dealerships, all located in the same city in the northern United States. The group wanted to build manufacturer brand loyalty while maintaining strong individual dealership identities.

The ultimate goal was to grow each dealer’s market share and market penetration. This increase would also lead to more frequency in customer visits and eventually lead to more brand loyalty for increased vehicle sales.

Approach

All service customer repair order (RO) records and prospect lists for each participating dealer were merged into one master group comparison list for the purpose of removing duplication of mailings and allowing prospective customers the opportunity to choose between seven dealers, rather than receiving a message from a dealer to which they have no loyalty. A colorful, powerful postcard was designed that encompassed all seven dealers, who picked their own price points and offers. Individual dealership mailers were also designed that featured a variable discount offer and a premium.

There are advantages to group programs:

There is potential to eliminate consumer confusion and competition among regional dealers of the same brand, specifically allowing each dealer to set his own standards of service pricing and to maintain higher margins by not worrying about being under priced by another regional dealer of the same manufacture.

The competitive focus can be realigned against the after-market service industry.

Frequent mailers create more consistency with a brand focus, which hopefully will generate more consumer familiarity, confidence and trust, resulting in increased business.

Results

Regular customer mailer

Six dealers reported the following results:

• Customer responses as a percentage – 22.4%
• Customer RO dollars generated – $2,861,728
• Average responding RO – $200.83

Lost customer postcard

Six dealers reported the following results:

• Customers responding as a percentage – 5.8%
• Customer RO dollars generated – $432,976
• Average responding RO – $222.38

It can be determined that prospective customers are more likely to respond when given a choice. These dealers did not lose when they allowed other dealers (of the same manufacture) to market to their customers. Instead, they benefited from the united front portrayed on the postcard.

It can be determined that prospective customers are more likely to respond when given a choice. These dealers did not lose when they allowed other dealers (of the same manufacture) to market to their customers. Instead, they benefited from the united front portrayed on the postcard.

Increase service revenue as well as increase the core service customer base for a mid-size to large import dealership in the Northeast.

Approach

The first layer of the solution lies in understanding how you communicate with your core business. Separate customers by behavior. It makes sense to approach a recent customer differently than a defecting customer. According to an article by Kate Horstead featured on BusinessWeek.com, “Your old customers can be a valuable source of sales. They already know your business and were once interested in buying from it, so you may be able to persuade them to buy from you again. With new sales leads you have the time and expense of finding customers from scratch. As long as you have kept good records of customers, you will know their buying habits.”

Focus a marketing strategy on that premise: that it is easier and more cost-effective to win back former customers than gain new customers. To win back these defecting and lost customers, the dealership offered much more aggressive coupon offers.

The goal was to build long-term business from these lost customers and bring them back into the cycle of becoming regular customers. After the mailing, a comparison was completed showing the results of the segmented marketing campaign compared to a previous month’s marketing approach that featured less aggressive offers to all segments of the dealership’s database.

Results

By specifically targeting the lost customer base with a deeper discount, the dealership experienced an increased response from this marketing segment. The response rate of this segmentation was compared to a previous non-segmented marketing approach to determine if the deeper discounted offer provided an incentive to visit the dealer.

Summary

The increased revenue supports the marketing segmentation approach.  The aggressive offers drove lost customers back to the dealership. At first glance, aggressive couponing may appear to be counter-intuitive in today’s tough economic climate, but if customers never come in, what is the return of that investment? This dealer clearly saw a 105% increase in RO’s with a corresponding 143% service revenue increase by applying a more aggressive marketing strategy targeted to a specific lost-customer segment.

The challenge is to address a common dealer’s question: Could a dealership take their e-mail customers’ names out of their direct mail list to save money? We wanted to see the response from customers who received e-mailed promotions instead of direct mail promotions.

Approach

We decided to look at several dealerships and track whether those who opened and clicked on an e-mail promotion in one month would continue to open and click on e-mails over the next six months, suggesting a heightened level of interest due to the interaction with the marketing piece. If a large enough grouping of customers could be shown to interact with the e-mails each month, it could be suggested that a dealership could exclusively send e-mail promotions.

Results

After the end of the review, an interesting trend appeared. While an average of 6% of customers who received just an e-mail promotion clicked on it, an even smaller portion continued to click in the following months. On average, 17% of the original 6% of just e-mailed customers continued to click over the next six months. The core group of loyal “clickers” represents only 1% of all customers who receive your e-mails.

This suggests that the people who clicked in the first month are less likely to click the following month because a portion of those people used the first month’s coupons for servicing. These customers would click again a few months later—only when their vehicles again needed service. This inconsistent behavior, due to a given customer’s current need, creates a very small core of loyal monthly e-mail “clickers.”

1,000 Person Story

Using an example of 1,000 customers and the results of our experiment, we would ask the dealer the following questions:

• Of the 1,000 customers, you only have 200 e-mail addresses. What do you do with the other 800 customers?
• Of the 200 customers who have valid e-mail addresses, 184 will receive the message (the others will bounce back).
• Of those 184, 12 will unsubscribe. That will leave 172 people.
• Of the 172, 12 will click through the message.
• Of the remaining, most who click through do not do so on a monthly basis.

Conclusion

It is clear from the results that marketing only to those customers who respond with an e-mail click is dangerous to your marketing strategy. The dealership may have saved money, but it was simply because they did not mail to the majority of their database. E-mail is an excellent addition to heighten results with other marketing initiatives, to extend a dealership’s brand and to target customers who prefer e-mail promotions. We would advise curbing expectations of using only e-mail (in place of other forms of marketing) with a given customer without knowing whether or not that customer responded with a repair order. There is a lot at stake if you consider direct mail is associated with $40,000-$60,000 for every 1,000 communications sent.

A more effective strategy might begin by asking your customers to find out which ones would prefer e-mail over direct mail. Follow up a service order with a short survey on customer satisfaction, and include a question asking if they would rather be sent e-mails exclusively.

According to a recent study by the Automotive Aftermarket Industry Association (AAIA), 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.

One of our dealers, a large import dealer located in the southern United States, decided to address the issue of being cost competitive, without sacrificing profitability. The first part of his challenge was to utilize a cost-efficient means of keeping his name in front of customers and enticing them back into the dealership, despite perceived higher cost.

The second part of the challenge was to retain new customers. Being cost-competitive is great, but really showing the value of the dealership is the key to turning one-time customers into regular customers. What value proposition could the dealer create that would justify perceived higher cost?

Solution

The dealer asked us to create a mailer offering a $19.95 oil change. The shop is the number one store (of that particular manufacture) in that region in paid-customer work. On subsequent mailers, the dealer continued to offer the $19.95 oil changes. To sweeten the deal, he chose the rock-bottom price of $9.95 to put on a lost customer postcard, which was mailed at the same time as a regular mailer that featured the $19.95 oil change. Customers are considered to be lost when they have not visited the dealership in 24 to 36 months.

To overcome the second part of our challenge, the difficulty in retaining customers, the dealer turned his focus to branding his dealership as having great value and strong personal interaction.  This dealer has eight technicians, most of whom are master technicians. Each technician performs an oil change and a multi-point inspection. If he sees a problem, he assumes the role of a consultant and shows the customer. He will either take the part up front or pull the car around. Allowing the customer the courtesy of a visual inspection and presentation of damaged parts/systems fosters credibility. If the technician can tie the work to performance or safety concerns, he will further increase the likelihood of an upsell.

Side benefit: The customer can gain exposure to the entire dealership and perhaps that customer will buy a car from the dealership in the future. The relationship begins at your service department and the goodwill continues.

Results

The dealer brings in over 10 million dollars in revenue per year. His one-time customer visits are high (which is true of each dealer in his region), but his number of customers who visit five or more times per year is still higher than his competitors’ in the region. In one case, his average of customers who visit five or more times is almost eight times as much as another dealer. In fact, his customer count, number of visits and revenue are all highest in his region.

To increase customer frequency through a cost-effective direct marketing program for a medium-size import dealer in the Midwest. On average, just over 18% of a dealership’s customer base comes in three or more times a year. The dealership needed to increase customer frequency in order to increase profits and retain clients more effectively.

Approach

We suggested the dealership begin running our service reminder program, which signals customers to come in by: reminding them of upcoming mileage and time-interval scheduled maintenance and/or reminding them of declined recommended maintenance from a previous service visit. The approach was unique to what they had been doing because the letters were personalized to customers’ specific vehicle needs, contained dealership pictures and represented the dealer’s brand and logos. The dealership included this program along with their other direct mail initiatives in order to build their brand using the familiarity of the staff and facilities to drive in customers.

The reminder program components:

• Welcome/thank you letters: These letters are a way to build customer loyalty by showing appreciation for a customer’s business and to encourage them to return.
• Reminder letters: These letters remind customers when it is time for their vehicle to be serviced. The goal is to increase the frequency of customer visits, therefore increasing sales from current customers. Coupon specials and an amenities section within the letters are customizable.
• Recommended letters: By targeting the current customer base with customer-specific recommendations, these letters generate high RO response rates and revenue. Forty percent of customers walk away from recommended services, so these letters are an effective way to keep the dealership’s name in front of them.

Results

Service mailer response rates for this dealership during the first quarter of 2009 are consistently between 11–14%, while reminder letter responses are at least double those figures, at 21-50%. For the same period, the reminder letters returned at least $45 for every $1 spent.

Summary

Based on the results, it can be concluded that reminder letters can be a vital component of a comprehensive marketing strategy. The reminder program yielded a larger increase in response and return on investment than service mailers alone. As the dealership continues the program throughout the year, it has the opportunity to convert infrequent customers into repeat customers by upselling, providing top-notch service and building trust. The next step would be to measure retention over the next 12-month period and compare the numbers one year from now to get a more in-depth view of the impact.

As consumers become more technologically savvy, many new avenues of contact become available. One of the possibilities is using e-mails in conjunction with traditional mailers. E-mail coupons are common for tangible consumer products, but how effective are they when accompanied with a traditional direct mail piece?

Approach

One of our medium-sized dealers sent out about 4,500 mailers each month. To reach his tech-savvy customers, he decided to accompany his mailer with an e-mail campaign. We had e-mail addresses for about 15% of his database, so we sent an e-mail to those customers about three weeks after his mailers were sent. The e-mail was an electronic version of his direct mail piece, featuring the same design and offers.

Results

In March and April of 2009, e-mails were sent out to approximately 15% of the total mailing list. There was an increase in the repair order dollars’ average of 29% for the two months the e-mail promotion was used. After factoring in the nominal cost of the e-mail, it was revealed that the average return on investment increased $2.80 for the promotions that had e-mails. If the customer acted on the e-mail coupon or just the reminder the e-mail provided, the customer did visit the dealership, which boosted the ROI. The case study determined that the use of e-mail with direct mail is a more profitable tactic than just using mailers alone.

A service manager wanted to create a compelling e-mail message to accomplish two goals. He wanted to bring in more customers to celebrate his dealership’s grand opening and increase traffic during a slower time of the week. The idea behind an e-mail blast is to have it follow a mailer, to remind customers that a promotion is running. Typically, a dealership will see its highest number of repair orders during the beginning of a month as a result of a direct mail promotion. In the first 12 days of January, the dealership lost an average of 7.3 customer-paid repair orders each day. In addition, there is a trend of declined coupon usage in winter months. For this month, the dealership’s repair order drop-off was particularly severe.

Approach

An e-mail blast was sent on the 13th of the month, highlighting a grand opening special. An e-mail blast is a quick turnaround marketing initiative that can fit the needs of a time-sensitive (or urgent) situation. It was a one-day-only offer of a free oil and filter change and 27-point inspection (limited to the first 200 appointments) from 10:00 AM to 3:00 PM. It was targeted toward one manufacture, and customers could call or schedule an appointment online. The offer was strong and the sense of urgency was high, due to the limited number of available appointments.

Results

After the e-mail was sent, the 200 appointments were filled in 45 minutes. Of the 4,337 e-mails sent, 28% were opened. For the rest of the month, repair orders only dropped an average of 2 each day, compared to the previous average of 7.3. The dealer’s average repair order for this month was $215.79. By slowing down the repair order drop-off, the dealer created business where they previously had seen fewer customers. The dealer was not losing customers at the same rate as at the beginning of the month, therefore he retained $1,146.37 of revenue each day, yielding an additional $16,049.23 for the month.

In this time of ever-increasing postal rates, it can be a challenge to follow all the details of executing a successful direct mail campaign. As a market-savvy consumer, you know that getting your name out there is all about the frequency. So you plan ahead, set your budget, and keep the mail pieces rolling, but how can you be sure that the mailers reach the intended targets?

Here’s the other challenge: According to the United States Postal Service, over 40 million Americans change their address annually, which creates formidable obstacles in maintaining a high-quality mailing list.

Approach

To maximize the effectiveness your dealership’s promotions, you should have all of your mailing lists checked against the National Change of Address (NCOA) list every time. The NCOA standard requires a list to be checked every 90 days, and although having the list checked every time is time-consuming and more expensive, the benefits far outweigh the added cost. There are also several other processes that need to be followed in order to avoid sending messages to customers who are highly improbable to respond. Not all marketing partners cleanse information the same way. Some partners avoid meticulous efforts because they only lower the volume mailed and therefore lower the invoice that can be sent.

Results

It makes sense that updating change-of-address information to your mailing lists significantly reduces undeliverable mail pieces. That means more money stays in your budget. Running mail lists through NCOA can save almost 10% of your direct mail budget by eliminating mail to incorrect addresses.

Here are some actual examples showing the savings for three of our customers from January through May 2009. Although the dealers vary in size, their NCOA percentages are similar. “NCOA Moves” means the number of old addresses that were switched to updated addresses. “NCOA PCT” reflects the percentage of addresses we changed. Again, the investment-to-return ratio is almost 8 to 1 and over a year’s time. That adds up.

Addressing environmental issues and making “green” benefit a dealership.

Approach

Kerry Collision (affiliated with Kerry Toyota) in Covington, KY, is one of the first collision centers in the region to embrace the green initiative. Tom Dolan, service manager of Kerry Toyota, says getting internal support for the green process was easy. “Lots of people really wanted to get onboard to make this happen. Being green is where it’s all going to go. The environmental issues are coming to the forefront.”

Marc Carmado, manager of Kerry Collision, is working with Tom Dolan of the Kerry Toyota dealership to promote his green initiative. The We Auto Go Green™ logo is on each Traffic Builders-produced mailer for Kerry Toyota, along with Kerry Collision’s own “Gone Green” logo. These visuals help to remind their customers about Kerry Collision’s contributions to the green initiative.

Carmado says the highlight of their green initiative was waterborne paint. In September 2008, Kerry Collision switched from using solvent-borne paint to waterborne paint. Waterborne paint, in which water is the major ingredient (98%), emits less organic solvent into the atmosphere. For Carmado’s team, who usually paints 125-130 cars per month, that’s a lot less toxicity in the air. “We’ve reduced our pollutants to almost nil,” says Carmado. “It was a decision that I made for the shop. I think we have a three to four–year jump on upcoming national emissions changes.”

Carmado says cleaner air and a healthier work environment are just a few of the benefits of waterborne paint. Waterborne paints are nonflammable, and according to www.autobodypro.com, some paint companies promote the waterborne paint as having the ability to blend that meets or exceeds that of solvent-borne basecoats.

Making the decision to switch to waterborne paint turned out to be easier than executing it. Minor adjustments were needed to convert to waterborne coatings; even storing paint that will freeze is a change. “It’s a different set-up, a new way to learn to spray it. We had to retrain our guys and there was more waste at first, but it was worth it,” says Carmado. “This was a team effort and everyone was on board.”

Kerry Collision also recycles all of its leftover plastic, metal and light bulbs. A local vendor takes Kerry’s recyclables and sells them. Carmado is glad to donate those items that will benefit someone else. “It’s just another way to give back to the community.”

Results

“We are getting a lot of positive comments, especially from the younger car owners,” says Carmado. “They can see, from the green walls in our shop to the marketing efforts, that we are dedicated to the green cause. This is just something I can do to help the environment, and I’m proud of what we’ve done.”

It is an all-too-familiar scenario in almost any business setting: do more with less. A parts and service manager was asked by his general manager to reduce the advertising budget by 25%. The challenge was to analyze the advertising in a given time frame to determine the consequence of reduce the budget.

Approach

This can be examined both from a general marketing perspective, as well as a results-oriented perspective. It’s a given that by having the dealership’s message in front of his customers on a frequent basis is more likely to ensure success than a one-time mailing because frequency is a basic marketing and advertising principle that would be violated if this dealer decided to reduce his monthly participation. Since reducing frequency could not be recommended, the dealership explored reducing the mailing list size by 25% (per promotional period) to reduce the costs.

Results

In this case, the dealership could save $1,383 per promotional period on front-end costs by reducing the mailing list by 25%. However, using a standard forecasting model, it was found that by reducing the marketing cost by 25% could mean a potential reduction of up to $60,000 in total repair order customer pay dollars per month. In this case, on average, $142,383 of this dealership’s RO dollars are generated from customers who receive mailers. Reducing the marketing budget during a recession, even for a month, was not a safe way to cut costs.

Simply put, would it be worth it to “save” $1,000 if you are potentially sacrificing $60,000?

The challenge was to grow business from areas previously designated as “poor” retention markets, which in this case meant bringing customers in from previously untapped zip codes.

Approach

Based on Urban Science’s manufacturing reports, it was identified that 10 zip codes in the dealership’s region had not yielded customers. A mailing list was created to show how segmented targeting would be effective. Customers received a 45-day direct mail piece with a winter-driving focus.

Results

The postcard was mailed to 7,500 dealership repair order names and prospect names from the 10 targeted zip codes. The targeted customers resulted in a 9.37% response rate with 704 responses. ROI for the mailer was $40.23 per dollar invested.

An analysis confirmed that segmented marketing lists can work successfully. The accuracy of the 10 targeted zip codes was also confirmed. During that 45- day period, ROs from the targeted mailing areas made up 8 out of 10 of the top responding zip codes for that month.

In this case, because they cut back on marketing to all regular customers in order to target the untapped 10 zip codes, they saw that some of their regular customers did not come in. This supports the idea that direct mail is an important trigger, even to loyal customers.