February 2012, Auto Dealer Today - WebXclusive
I began my career in the car business as a service advisor in a Fiat dealership. I had no experience, no training and no job description, so I basically had to learn for myself. As you can imagine, I did not learn very much other than my technicians were very unhappy with my performance when it came to interviewing a customer and writing the repair order. I either needed some training or I needed to change my career path. I signed up for a two-day Fiat-sponsored service advisor seminar.
The seminar began with the facilitator standing before us uttering the following words, “It is the responsibility of your Fiat salespeople to sell a customer their first new Fiat, and it is the responsibility of your service advisors to keep those customers coming back.” That was 40 years ago, and today we still have far too many dealers who just don’t get that concept. Nothing has changed as far as how service advisors should treat customers, effectively communicate with customers and train customers on proper preventive maintenance. As dealers and general managers, you must provide advisors with marketing support to keep customers coming back and attract new ones.
Let’s look at what makes up an effective fixed operations marketing plan. A plan can be broken down into what activities are performed daily, monthly and quarterly.
Call Program - You must make calls for all no-shows from the previous days, all lost sales (customer-declined repairs), appointment reminders (usually those due in three days), maintenance reminders based on time and/or mileage, factory recalls, lost souls, and CSI. Additionally, you can call to offer extended service plans and/or prepaid maintenance plans. These calls can be made by appointment coordinators, call centers or an outside vendor.
Email Program - Your call program and email program will complement one another and thereby increase the frequency of contacts with customers. Emails should be sent to everyone in your call program.
Maintenance Mailers: In addition to calling and emailing customers, you can also use direct mail campaigns to remind them of needed services based on time and/or mileage. This tends to be more costly than email, but it still works and will further complement email and call programs.
Retention Mailers: A good example of a retention mailer would be the postcard specials many of you get in the mail each month from Bed Bath & Beyond. They are always the same size and colors, and they always have an offer that benefits everyone who visits the store. Example: Save 10 percent on any purchase of $25 or more. It does not matter what you buy, you will still get the savings. These types of mailers should maintain a consistent look and must go out once a month to keep your name in front of customers and give them a reason to visit your dealership.
Target Mailers: Every dealer has a database of lost souls. These are your past customers who are having their vehicles serviced somewhere else or not at all. There are varying opinions as to when to consider a customer lost. If you have not seen a customer in six months or longer, they are most likely going somewhere else for service. Again, they should be in your call program as well as your email program for maximum exposure. This campaign requires a reason for them to return. Usually you must offer a special premium of some kind, such as 50 percent off an oil change, a free oil change, save 15 percent, etc. You must make this offer attractive to get them back. Research shows that when these customers do return, the value of their repair order is much greater than your average customer-pay RO. When using an outside vendor, they can very effectively measure the success or failure of these campaigns and provide an accurate ROI.
OEM Campaigns: These have been around for a long time and serve a purpose. They are oftentimes based on seasonal offers. Some OEMs are now marketing service and parts specials, especially on TV. That’s a big benefit for the dealer as well. Make sure you pay close attention to the offers from your OEM regarding co-op advertising funds, marketing assistance, factory rebates, etc.
By now, some of you are wondering how much all of this costs or whether you can really afford it. Here’s how I see it: What’s the value of a customer-pay repair order? An average dealer selling 1.5 hours per RO (HPRO) will produce a total gross profit, parts and labor, of about $140 per RO. A dealer averaging 500 retail customers a month who implements all of the programs outlined above will realize about a 20-percent increase in traffic, which in this example would be 100 additional customers. If the dealership continues to sell at the current average of 1.5 HPRO (although it will likely be much higher on lost souls), the dealership will generate an additional $14,000 in gross profit. Do the math for your store.
What’s the investment needed to reach the 20-percent increase? In a 500-RO store, it equates to about $10 per customer-pay RO for a total of $5,000 per month in marketing costs. So the question is would you pay $5,000 a month if the return was $14,000 a month? This investment will vary based upon the size of the operation and will obviously reach a cap of some amount, but the formula is quite accurate.
Vol. 8, Issue 12