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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March 23rd, 2010 | Written By: Eric Johansen
As the marketplace adapts to alternative-fuel vehicles, service managers must adapt to a new breed of customers. In the same manner as dealerships selling mid-range and luxury vehicles meet the expectations of their customers by making nicer amenities “standard,” now they must also address the ever-increasing percentage of hybrid owners in the mix.
Hybrid sales are past their initial surge spawned by consumers labeled “early adaptors.” These are the gadget gurus who always want to be the first to own the next trendy item. According to industry experts, the second wave of owners, which included luxury brand owners, has also come and gone. Today’s consumer is most likely a person who is buying a hybrid for fuel-economy and environmental concerns and assumes that the initial “bugs” have been worked out.
Although hybrid sales have leveled off due to the slowing economy, they continue to represent between two to three percent of total sales in the United States. On its website, hybridcars.com reveals a recent forecast by J.D. Power and Associates which predicts the sales of hybrid and diesel-powered cars will more than triple by 2015: “The new study predicts that hybrids will account for seven percent of the car market in 2015—up from 2.2 percent in 2007— and diesel vehicles will carve out a 10-percent market share as compared to last year’s 3.2 percent.”
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Posted in: Customer Acquisition, Green Marketing, Marketing Plan
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October 6th, 2009 | Written By: Regina Green
What makes an effective offer? What will motivate consumers to change their buying habits and bring their vehicle to your service department? The time-honored rules of effective coupon offers dictate that a discount must:
- Represent a significant perceived value for the consumer
- Be easy to use
- Offer a discount on the dealership’s primary services
That’s why offering 2% off probably won’t bring customers in your service bays and an offer with a laundry list of exceptions in fine print, such as “only valid on Tuesdays and Wednesdays,” will go straight from your customer’s hands into the wastebasket. However, we recently noticed a trend that on the surface seems to defy rule number 3, or at least suggest that rule number 1 trumps rule number 3.
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Posted in: Best Practices, Customer Acquisition, Customer Retention
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August 2nd, 2009 | Written By: Chuck Patton
The weather gets hotter and the air fills with the sounds of Little Leagues across the nation. Coaches try to give their players advice that will last them the rest of their lives. “Keep your eye on the ball” is one such pointer. In the automotive market today, we are in the ninth inning with two outs and the count is three balls and two strikes. It is time to keep your eye on the ball, or in this case, on your units in operation (UIO).
The diminishing UIO is a particularly interesting indicator because it tends to first affect the service department. If your service department is hurting, then it’s like using a cracked bat when you come up to the plate. We all know the secret is out—the backend is profitable. But service departments are panicking now because their core base of customers (those who have vehicles within warranty that are younger than three years) has been dwindling for about 18 months or so, depending on which market they are located.
Do the math with these national trend numbers:
- Number of vehicles in your database – 10,000
- Number that leave per year – 2,000 or about 20%
- New units sold every year – 1,300
- New service customers every year – 700
- 30% decrease in sales over 12 months – 390 units
- Lost service sales potential sustained over 18 months – OUCH
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Posted in: Branding, Customer Acquisition, Marketing Plan
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