October 2008, Auto Dealer Today - WebXclusive
Owning a Special Finance Market
In walks a tiny blonde in a bright orange shirt carrying a bright orange, oversized handbag. The excitement and passion for what she does is evident from the minute she opens her mouth. She proudly states that she is in the customer delight business. Not exactly the opening to a typical department or dealership story, but then again, this dealership isn’t exactly typical. I have just been greeted by Christie Friday, the vice president of marketing for driversselect, a five-store group of dealerships serving the Dallas and surrounding area market.
On this day, Friday didn’t make the first impression, just a lasting one. The first impression was made upon arriving at the Mesquite location early in the morning and finding employees parking Mercedes sedans in the grass in front of the Mitsubishi store next door. Immediately one might wonder how they get away with that practice. Why does an independent dealership have multiple Mercedes in stock? And why would driversselect chose to put an independent store right in the middle of a franchise row?
Next, a walk through the lot finds everything from a Ford Focus to Jeep Cherokees to highline vehicles. All are clean and, for the most part, are not more than three to four years old. The lot is well-maintained, as is the facility. Your attention has been caught the overwhelming use of the color orange.
Why would anyone use so much orange? Orange dealership signs, orange dealer plates, an orange building (outside and in), and orange furnishings. More importantly, what does color have to do with selling 300+ special finance units per month?
It’s not the color by itself that sells cars, but it is the beginning of a brand. It’s about branding, a consistent marketing message and owning your market segment.
Four years ago, Steve Hall, president of driversselect, left the Eastern Group in Virginia and decided to relocate to the Dallas market and open his own dealership. He faced some challenges, the biggest of which might have been trying to enter a well-established market in a firmly-established industry with plenty of competition. To do so, you had better have a plan. Hall started with creating an identity for his dealerships. Everything is about orange and what the color means to the employees.
At driversselect, orange represents the passion their people have for serving others. When asked if wearing orange was a requirement of the job, Friday laughed and said, “No, but after you work here for a while you begin to be drawn to it. It’s a standing joke to see who gets a driversselect tattoo or who bleeds orange first.”
How do you go from a single location selling a few cars a month to five locations selling 300 units per month in four years? You have extreme passion for what you do. “We have an obsession for delivering extraordinary experiences to our customers,” said Friday. “We focus on how the customer feels. We survey those that buy from us and those that don’t because we want to constantly improve our process.”
Friday has the advertising background to execute and manage an amazing, multi-faceted marketing campaign. What she thinks she might lack in automotive knowledge or sports knowledge (key to their marketing) is more than compensated for by Hall, who is passionate about both of those items.
Hall stated, “A lot of what we do is about execution, not trade secrets, so I’m not afraid to share what we do.” They definitely execute on the marketing front. Their marketing campaign is a layered process with plenty of depth. When they entered the market, they invested heavily in radio, specifically in the urban market. Today, radio is still their most successful media, and currently they spend about 37 percent of their ad budget on it. Radio is all about branding. It’s not a call-to-action form of media, according to Hall.
Friday told a tale of a time when they had an orange Hummer that she drove around for promotional purposes. She encountered a toll booth operator who would not take her toll, but instead insisted on singing their radio jingle to her. That is the type of high-end branding dealers strive for.
However, radio advertising and marketing is much more than a jingle on the airways. Friday works closely with the radio stations to make sure the driversselect message is woven into the fabric of the station, but more importantly, into the fabric of the DJs’ lives. They use station DJs in billboards and provides vehicles for some of them to drive. They also promote various community outreach programs and host live remotes for various giveaways. They are deliberate in making sure they are active in family-oriented events.
They want listeners to think of driversselect first when they or anyone they know needs a vehicle. Their strong jingles are burned in the minds of their listeners and it is their cheapest form of advertising. In radio it is important to make sure your audience knows you are always there. “We can’t predict when they will be in the market; we just want to be top of mind when they are in the market,” said Hall. The dealership group feels that it owns the urban radio market and is now branching out into other markets, but they have never left the urban hip-hop stations.
The decision of which new radio market to tackle next was a big one because it meant tailoring every commercial, remote and promotion to the specific audience. Two markets were important to Hall—country blue collar and the Hispanic market. They chose to expand to country first. Friday added, “There are just three country stations in our market while there are 14 Hispanic stations in the Dallas metro market.”
“When we enter a new market we want to own it. The Hispanic market is undeniably huge, but we didn’t have the infrastructure in place to be able to serve the Hispanic market properly. You have to have the right people in place and we felt like we didn’t have it at this time, therefore it didn’t make sense to invest that much budget into the market yet,” said Hall.
Television consumes another 30 percent of the driversselect ad budget (excluding production and endorsement cost). Friday admitted that they don’t see as much bang for their buck as they did early on with infomercials but they still believe television is an integral part of their marketing plan, even if it is the most expensive form of advertising they do.
They still invest in billboard messages which tie back to radio and TV messages. A couple of years ago, Friday started getting calls about a new billboard. “I love the new Hummer board,” is what she was told. Baffled because she hadn’t used a Hummer in a billboard she started researching what was generating the buzz. It seems that Hummer had put up an H3 promotional billboard in the Dallas market and had used enough orange that drivers assumed it was driversselect’s ad. That is the power of branding in your market when someone else places an ad and you get the credit.
Traditional print is not in the mix and neither is direct mail. “We always swear we won’t do direct mail again, then we hear someone who has had great success with a piece, then we say, ‘Okay, we will try this one piece.’ Then we swear we are never doing that again!” said Friday. The time lapses between those bouts of never and maybe are pretty extended these days because they have never seen the type of success from direct mail that they see in their other media.
What about online media? “Online has to support offline advertising. Online might be cheaper to acquire sales, but it doesn’t build a name for a dealership,” said Hall. Friday confirmed that a very small portion of their ad budget is invested in online marketing at this time. It’s not that they don’t think it’s important, but they are not in any hurry to change their marketing approach.
In case you haven’t been to the Dallas market or to the driversselect Web site to see it for yourself, there is another portion of their ad budget consumed by some not-so-traditional marketing—celebrity endorsements. Their highest-profile celebrity endorsement, a gentlemen who actually owned a bright orange suit before he started working with driversselect, is none other than Deion Sanders.
You will find Sanders and his message regarding driversselect woven into every media type. In addition, they have agreements with Jerry Stackhouse (Pistons), Josh Howard (Mavericks), Devin Harris (Nets), and they recently signed Adam “Pacman” Jones (Cowboys). The dealership often creates contests based on the performance of the athletes.
Is it easy to work out those types of contest details? “Honestly, I’m a bookworm. I’ve never played sports and I really don’t even follow them. That’s where Steve shines. He has the knowledge to explain to me what we want to accomplish, language we need to use and the connections to get it started. My job is to work it into everything we do,” said Friday.
The message formats vary based on the audience (the backgrounds of urban music listeners are very different than those of country music listeners) but there are several consistencies in the messages:
*Quality cars for people with bad credit
*Quality cars for people with bad credit who can still get a great deal
*driversselect is there for me (This was their original catch phrase.).
*Hot, sexy vehicles for those who have had credit problems
All of this marketing is for naught if it doesn’t get customers to the lot. Every media type and campaign is designed to drive customers to the driversselect Web site to complete a credit application. It works; each month 1,600 to 2,000 credit applications are completed and a centralized business development center (BDC) follows up with each and every one. Each ad source is also given a dedicated call tracking number to further assist in tracking. On average, there are nine individuals in the BDC working hard at setting appointments.
The dealership was willing to allow a review of their BDC ad sourcing and tracking documentation. They track by ad type (billboard, radio, television, Internet and referrals) for leads, appointments set, appointment post (show), cost per lead, cost per set and cost per post (show). Additionally, they track the units sold, the capture ratio (sales to leads) and the cost per unit sold. All of this while meticulously tracking their ad budget and comparing it to the previous month’s activity.
Even with all of this tracking it is still difficult to determine with absolute certainty what drove the customer to the site or ultimately to the dealership. “Customers will tell us, ‘Deion sent me,’ then claim it was on the radio, when in reality it was only on TV or vice versa,” said Friday.
To truly build a brand, however, you have to follow-up the first impression media with an equally outstanding impression on the lot. Remember your first impression when arriving at the lot—late model, wide variety, clean vehicles, all certified and with warranties. The message of driversselect is consistently about the vehicle customers want even with damaged credit, so the first thing they have to do is be able to address a variety of credit issues.
Each week they host free credit seminars. “Many parents don’t educate their children about credit and purchasing. I know I didn’t know much about vehicle purchasing when I came to work here. I’m constantly educating my friends about how your credit determines if you can purchase a Focus or a BMW with the same money,” said Friday.
Because they wanted their customers to understand these types of facts, they created a brochure (which is now copyrighted) as an educational tool. They can easily explain the value of the customer’s credit score in relationship to what they are able to purchase. They use this to help the customer understand what they need to do to improve their credit score and get into the vehicle they want.
Hall has a non-traditional training and selling approach in his stores. “We don’t have set steps to the sale. Instead we teach six behaviors that are critical to our success.” Those are:
Hall is not overly concerned with the “how” of each behavior. “Each credit consultant has a different personality as does each customer. So, why should I dictate how they show their appreciation? The important part is, does the customer know we appreciate them? If the customer knows that, we are doing our job.”
Hall also believes that one of the most important things you can do is to make sure that the customer feels you like them. (As opposed to the philosophy of the customer having to like you.) “Forcing every customer and every sales person down the same funnel doesn’t make sense to us,” he said.
It’s all about how you manage the customer expectations. Is the customer someone you respect and value? If you look at them as an easy transaction, the whole experience is less than desirable. The customer experience shouldn’t change based on credit. The appreciation and service should be identical regardless of the customer.
If a person who previously had a 700 credit score now has damaged credit, they may want to look at specific cars first, before working through a credit application. The credit consultants will let them. The empowerment of the customer drives their experience. The more they feel they have the power, the better the experience.
“We will test drive customers in what they want,” said Hall. The entire sales process at driversselect can take from one to three hours, but customers are in control of most of the process. Time is spent finding the car the customer wants, and much more time is spent getting to know the customer. The credit consultants want to know everything possible about the customer’s credit situation—how they got in trouble, why they got in trouble and what they have done about it.
While the dealership works on arranging financing, the customer can watch a flat-screen TV, listen to music or surf the Internet in a private office decorated in a manner keeping with their ongoing orange-colored branding. Once financing is approved, the credit consultant will present finance terms.
The terms may not fit the customer’s expectations. If not, the consultant explains what the customer needs to do to obtain the vehicle they want at the terms they want; for example, bring their mortgage current, pay down credit cards, get a co-signer, or get a credit card to establish a credit file.
The dealership does a considerable amount of credit education. They often show customers changes they can make over the next three to six months to improve their credit, so they can get the vehicle they really want. It’s the customers choice to do it; driversselect employees don’t repair credit. They just tell customers how to improve it.
The dealership will sacrifice a sale today, provide the customer with education, and keep them in the market instead of forcing them into something they don’t want. They won’t let vehicle quality deteriorate to activate a customer. Even if a car is never sold, the dealership wants the customer to tell their friends, “They couldn’t get me financed, but they let me drive a really nice car.” If customers drive what they want and see a way to get it, they are more motivated to work towards that goal.
Even though their typical customer has the ability to pay for a good car and their average amount financed is $20,300 (their highline sales inflate this a bit), the dealership is not exempt from the challenges in the industry today. They recently closed their Arlington store and have moved their employees to other stores and purchased a Chrysler, Dodge, Jeep store in Clifton. They are cutting expenses, tightening up and redeploying their best people to new positions to improve their operations.
Their biggest challenge, according to Friday, is to stand out enough to be the first choice among buyers without using gimmicky sales pitches. “We don’t do bankruptcy sales or hail sales. We just want customers to know that we have hot, sexy cars regardless of their credit.”
Is further expansion on their minds? “We would love to take our brand to other markets,” said Hall. “But we will only grow as fast as we can find the right people. We have no push to grow beyond that. If we have the right talent, we will grow.”
Sounds like a man with a plan and the right vice president of marketing to execute it.
Side Bar: Each year, driversselect hosts two customer appreciation parties. In June, to celebrate their fourth anniversary, they held a mafia-themed party. The theme was chosen to illustrate that everyone is part of the driversselect family. Employees, vendors, customers and finance companies are all invited to these parties. Usually something orange is a requirement for attendance but this one was exempt, at least in the dress aspect. Everything was still branded in driversselect orange from their orange chocolate fountains to the topiary dressed in an orange bikini. In addition, the giant screen outside had the driversselect commercials running throughout the event. (pics)
“If you are the same today as you were yesterday, you are not doing your job, because you should always be getting better.” That’s what Steve Hall, president of driversselect told Christie Friday shortly after he hired her as the vice president of marketing and advertising .
Special Finance Insider Vol. 2, Issue 5