Author Archives: paulhealy

How to Build a Public Relations Position to Grow Customer Retention

“How would you create a ‘wow’ buying experience for the customer after they purchased their car? How would you set up a brand new profit center by developing a public relations manager?”

I have had a few calls from people about last month’s article about using the “Apple Experience” in your dealership’s service drive to retain customers. The main question that kept coming up was how to set up this type of program. This month, I will try to outline the steps I would take to develop this experience in a dealership.

One of the things I suggested was to get more Millennial and newly graduated college students into our business. How would you create a “wow” buying experience for the customer after they purchased their car? How would you set up a brand new profit center by developing a public relations manager? How would you get better penetration on F&I products? And, finally, how would you pay for it all? Let’s drill down on some of these things in a little more depth.

The first step is to advertise for recent college graduates. Let them know this is a manager-training program. You may want to hire more than one as the program grows. I would start their salary at $600 per week, plus commission. In order to offset this cost, I would have the company I buy my F&I products from contribute part of this expense. I’m sure they will have no problem with this because this person will be selling their products full time and the penetration should go through the roof. If you have an agent or customer retention company or, really, any other company doing business in your store, they can contribute as well. All of these people will benefit in the long run and what’s wrong with someone paying the dealer to do business in their store? Think about it: If that cost is split three ways, you are hiring a college grad in a management position for $200 per week. If it is split with more vendors, it will be even less. As this person gains more experience, they can be worked into other departments, and now your management program is up and running.

The second step is setting up the program. Everything we want sold should be laid out on an iPad. When the customer comes in for service, we pull them up, we have the date they bought their car and what they purchased in F&I at the time. We will know when they go out of warranty, or when their service contract expires. Did they purchase a prepaid maintenance package or other products, such as key fob coverage, wheel and tire coverage or ding and dent? The public relations manager can review the benefits of each product with the customer, even showing a short video on the value add for any of these products. If the customer doesn’t have time for a review, we can email a feature benefit presentation to them so they can look at it at their convenience. Think of a business development center for your F&I products. The public relations manager will make a commission off of each product he or she sells. We could also wrap it with an equity-mining tool and he or she could be commissioned on car sales, as well.

The third step would be the sale of accessories. Everyone wants to sell more aftermarket products. Tires, batteries and wiper blades could be advertised in a targeted marketing campaign. Sell bed liners to truck customers, and wheels, rain guards and window tint to customers on the anniversary of their purchase. The PR manager could get all the op code declines and develop a coupon campaign that could go out nightly. With all the information from the DMS at their fingertips, they can easily spot when a customer is ready for an upgrade. All of this marketing could be done on-line with just a little help from a graphics department.

Even the question of who manages and trains the public relations/manager trainee can be answered using one of your vendors. Any vendor who is currently in your DMS could easily work with your F&I provider to develop this program. They could hire, train and supervise and then, when you decide to promote them to another department, they could do it again. It really is a low-risk, high-rewards proposition for any dealership.

The last step is truly the public relations part of the program. This person will be the liaison between the service department and all the other departments in the store. If you have a rewards program, a customer Website, a customer app, weekly coupons, and a lifetime engine or powertrain component, all of this can be reviewed and sorted out either in person or through email communication. This person’s success will be based on their ability to develop a good relationship with the entire database and develop your store into the customer’s dealership for life.

Jack Garrity

Loyalty Versus Retention

Every business wants a loyal customer. Who doesn’t want a customer who is unswerving in their dedication to your business? Who doesn’t want to do business with someone who is as faithful to you as a customer that they would never think of purchasing something from anyone else? If only our customers were like our dogs, loyal to the end regardless of the circumstances. Well, we are never going to find customers as faithful as our dogs, but you get the point. Creating devoted customers does not happen overnight, nor does it always last a lifetime, but staunch allies can grow our business faster than any other factor we have. Their steadfast devotion to us is not only good for our business but they become advocates in the community that extends our message far better than any advertising campaign.

The question then becomes, how do you create loyalty? Here is where the quandary comes in. Before you can have any degree of loyalty, you need to design something that will keep the person engaged until they become a strong supporter of your business. What type of retention tools are you developing to create a steadfast customer whose loyalty will be contagious in your community? These tools are where retention comes into play.

In the automotive business, you see many different programs popping up designed to create retention. Unfortunately, not all of these are designed to create loyalty. Loyalty comes from a great customer experience. This customer experience needs to occur over and over again. Let me give you a few examples. One dealer gives away the first two oil changes free and one has lifetime oil changes. Which retention program creates more loyalty? One dealer gives a free tire rotation when you purchase a vehicle, and another gives you a rewards card that earns point toward free service for the life of the car.

Starting to get the picture?

Customers become loyal when they think you have gone the extra mile. The days of saying, “We’ll treat them right and they’ll come back” are pretty much over. Everyonetreats their customers right in this market.

Retention programs are not the answer to the problem but the tool for solving the problem. Picking the correct method of retention can go a long way toward developing a strong loyal following. The branding message that develops your loyal customer will, in time, create that raving customer.

Keep in mind that choosing your retention method is not a one-size-fits-all decision. A good CRM program is not necessarily a good retention tool — unless it combines a series of messages throughout your business. A factory rewards card isn’t branding you as someone different in the market place; every dealer has the same program. You don’t necessarily want loyalty to the brand — you want loyalty to your business. What is your message? How do you communicate that message to your customer? A combination of retention tools designed to deliver a unique message that your customer sees value in is always the best step.

That fact that loyalty is not created overnight can be perplexing to the average business. We all want instant gratification and, when we spend money, we want to see it go immediately to the bottom line. That’s why the rush to just grab the first thing that comes down the line is so enticing. That is also why it usually doesn’t work, and we wind up throwing good money after bad. Think of the things you are most loyal to — your school, your church, your favorite sports team, etc. Did it happen overnight? They all provided you with a great experience, a great memory and, over time, a dedication that is hard to shake.

So, where should we focus our retention efforts? In my experience, when trying to develop loyalty and retain your customers, it’s best to focus first on the service drive.

I see a lot of stores offering lifetime powertrain and they are calling it a retention program. Yes, there might be some form of retention in having the customer call to get an authorization number for service, but overall most of these programs will let the customer go anywhere for their oil changes and maintenance. The problem with this is retention begins and ends in the service lane. Lifetime powertrain as a stand-alone retention tool is not enough. It mostly helps us sell more cars — that’s not a bad thing, but to have people talking about our business like they do Amazon Prime it’s going to take a lot more than this to move your numbers to the next level.

To start the process of developing loyal customers for your business, you need to lay out a comprehensive plan that is ongoing and develops a branding message that separates you from your competition. It might not be one retention tool but several. Lay out the plan in advance and make sure you have total buy in from your management team. Look at each department and see what type of retention tool you are using to create loyalty. It is very important to have a way to measure your results, but the best measurement is say to yourself, “If I was the customer, is this program so special that I can’t imagine ever wanting to shop any place else for my automotive needs?”

Jack Garrity

INSANITY

Insanity: Doing the same things and expecting different results.
 
Over the years there has been a slow evolution of how we do business in the Automobile Industry.  Essentially, not much changes and if it does it is so slow that it is imperceptible.  The good news that comes from this phenomenon is that we know what works and what doesn’t.  In some cases, we keep doing the same things just because our competition does it and we go along thinking that we will suffer if we don’t follow along.
 
I will use a common practice to demonstrate what I am talking about and that is direct mail.  We hire a direct mail company with the intent of driving business to our doors.  They acquire ‘lists’ that are generally geographical or demographical and prepare an offer (incentive) and they use the United States Postal Service to reach out to these potential customers.  What happens next is that the mail hits the mailbox and the potential customers might respond to the offer.  The truth is that Consumers are opposed to this type of marketing and for the majority, they simply discard the offer as “junk mail.”  The small percentage of customers that do respond amounts to less than 3%.  So, let’s break this down.  A Direct Mail company will charge a fee per consumer including mail costs.  A typical mailing could easily include 20,000 pieces. The offer is generally a below cost service that the dealer will lose money on, with the hope of being able to up-sell the customer when they respond.  Industry results tell us that you might get a 1.5% response, so you can readily see that this is not cost-effective.  Add to this the loss you are taking on whatever incentive you have put together and you end up with a net cost that just doesn’t make sense (INSANITY). These customers are not advocates of your brand.  History tells us that only about 10% of those responding will buy the up-sell.  Here is the sad part of this form of marketing, you just spent all your advertising dollars to get a customer to come in for the loss leader incentive, and they typically do not return for a second visit unless you send them another mailing!
 
Now let’s contrast that with a simple rewards program that gives your customers an incentive to return to you to cash in rewards that they earned on their last visit.  A simple rewards program that awards points for dollars spent that can then be redeemed upon the next visit is both cost-effective and results in multiple visits to your store.  The big difference is that you have a program that keeps your customers involved by rebating a small percentage of what they have already spent with you, and they keep coming back!  These programs generally cost you nothing, as the return-on-investment greatly overrides any expense.  The beauty of this concept is that your customer will respond to the up-sell at a higher percentage because they have “found money” they can apply to these services. Additionally, they keep returning because they know you appreciate their business and you keep rewarding them.
 
There are additional benefits to your business with this marketing approach in that you can award points for events that you now spend dollars for.  Examples are referral programs, compensation for a mistake, motivating your customer to like you on social media, respond to an offer to purchase whatever you are selling.
 
A rewards program does not have to be complex or hard to administer.  If you partner with an established rewards company, they will make the process so simple that your staff will not be encumbered by having to add to their workload.
 
Rewards programs have been around for a while and customers are familiar with them and generally respond positively to the incentives at a much higher percentage.  The one notable point in this comparison is that one marketing concept creates a one-time event at a high cost and the latter creates a lifetime of loyalty creating additional profits.  In putting together your marketing budget you must always consider return-on-investment and, as you can readily see, one is astronomically expensive while the other is cost-effective.
 
Take the time to explore this more effective marketing and profit generating program by contacting a professional company that can make it all very simple.
 
Stop the INSANITY!

– Jack Garrity