The days of simple and minimal service marketing have come and gone, and it’s time to adopt a newer, well thought-out plan of attack. What must a dealer do to think outside the box in this economy? As a first step on the path to securing your dealership as a market gainer in a sea of dealerships posting continual losses, you should stop the simple coupon mailer mindset.
Success was a numbers game. Previously, a service department could depend on new vehicle sales to continually feed the customer pool. And if they weren’t capturing enough of those new potential customers, they could look to steady flow of warranty work and internal work to keep service bays full. If they experienced a slight dip in RO traffic, a quick fix was to send out a coupon mailer with an inexpensive oil change.
Success is a service game. Dealers now need to fight their way to the top by examining their processes and innovating new methods and a new mindset to position themselves in the black. These dealers will recognize their service department as the place where their future sales stability lies. These dealers will think past the immediate, and ignore the inflated promises of getting 50 new customers this weekend with a one-hit promotion.
Service Coupon Mailer Mindset vs. a Service Marketing Program Mindset
The dealers who explode with success will be the dealers who stop thinking “How will I increase business this month?” but rather start running a strategic well thought-out service marketing program for the year. A “service program” is built upon the understanding that, like any successful diet and fitness routine, these campaigns and efforts are long-term commitments. Long-term commitments require conscious preplanning, innovative thought, consistent behavior and examination of progress. Not all mailers are “just a coupon mailer.” The foundation of an intelligent service marketing program mindset is grounded by practices built on frequency. Frequency involves several communications, designed to uniquely address different customers based on their service behavior. While the method of using a mailer to reach a customer with an offer is still the most effective way to touch a customer, it is important to understand the difference between a simple service coupon mailer vs. an intelligent service marketing program.
Planning and Frequency
The most obvious difference is that a program plans out further than the next 30 to 60 days. A service marketing program will provide a long-term written plan of not just what service offers will run next month, but rather which offers will run to which customer groupings for the rest of the year, and the plan will provide a method for measuring and adjusting the message as customer behaviors shift.
Reach vs. Frequency: Understanding the Difference
“Reach” is the number of customers that you market to, and “frequency” is the number of times you touch each customer with your message. In a world with an unlimited ad budget and a huge co-op account, you would maximize both reach and frequency. However, since most dealers live in a world stripped of co-op and a shrinking ad budget, we must make a choice between reach and frequency. In real situational terms — do you mail to your entire customer database three to four times a year, or do you mail to a part of your database more often? A successful service marketing program will provide a strategy to maximize your reach and identify target markets based on the needs of your dealership. When faced with the choice between reach and frequency, the golden rule of advertising is: Reach without Frequency = Wasted Money.
The service coupon mailer mindset was determined to mail to as many customers as they could, not worried about details such as the validity of the address, if the recipient still owned the vehicle, how far away they live, if they were just at the dealership recently, etc. A service marketing program mindset knows that, undoubtedly, one of the biggest wastes of marketing dollars is promotional activities that are implemented without adequate frequency — there are no “one hit wonder mailers.” A “program mindset” is grounded by the basic belief that:
- Frequency demonstrates Consistency
- Consistency breeds Familiarity
- Familiarity creates Confidence
- Confidence cultivates Trust
- Trust is why people buy
Dealers are achieving record months in this down economy. Amazingly, we work with and talk with many dealers out there that have achieved record months in service and parts gross sales over the recent months.
Yes, that’s right — service departments with record sales months in May, June and July 2008. How is that possible? Isn’t the economy terrible? Aren’t sales way down? This impressive success has occurred because the message being conveyed in the marketing programs was consistency, confidence and trust. Strategically targeted mailers were sent out as a part of a planned program that:
- Was consistent and planned six months to a year in advance by examining existing customers and their servicing behavior
- Was sent to markets that were segmented so that mailers with relevant messages went to targeted customers
- Were directed by the dealer (not their manufacturer) and achieved through a professional marketing partner
- Always kept a consistent branding image and sold the value of the dealer’s brand (their relationship) — not just the manufacture brand.
- Were campaigns that communicated confidence and care of the customers and created a trusting relationship
Success is a service game. Achieving results will be attributed to the trust that you build with your customers and the consistent way that you communicate with them. Examine your service marketing and proactively take steps to turn it into a strategic program, giving it the same amount of attention and effort as the amount of absorption you expect your service department to carry over these down sales times. Changing the mindset in service marketing will go a long way to building long-term success.
Tags: Direct Mail, Marketing Plan
