Author Archives: paulhealy

Using Customer Retention to DRIVE SALES

drive sales

I visit about 250 dealerships a year and, from time to time, I hear different complaints about things that are not working the way we would like them to. Some are the usual — not enough sales, can’t find techs, heavy turnover in the sales department, etc. Sorry, no answer for these. However, I think I’ve found a way to address the “customer retention is too costly” problem in a unique way.

I was in an Apple store the other day buying a watch for my wife. She is Apple to the core, no pun intended. She has an iPad, iPhone, iTunes and a Mac. To say she is a loyal customer would be an understatement. The person who waited on me was fabulous. She had great product knowledge, sold me the watch, three different bands, plus a charger for my car and a new, upgraded iPhone 7. As I was leaving, I wasn’t thinking about the $1,000 I had just spent, but instead, “Wow, what a great experience!” This got me thinking about our business, how we can create the same type of experience for our customers.

Some stores have accessory departments, and some don’t. If you do, this is a good place to start; if you don’t you may want to think about starting one. Many of us don’t sell enough cars to have a full-time accessory person. Let’s take this person and use them to build the “Apple Experience.”

One of the problems I hear many dealers talk about is they have a hard time hiring employees right out of college. A dealer in North Carolina told me, “I just can’t hire anyone with a college degree. Who wants to spend $160,000 on a four-year degree and then go home and tell their parents they are selling cars?” Here is a golden opportunity to get some of those people. Take the job as an “accessory person” and turn it into the public relations director for the dealership. Hire only recent college grads and use this as your management training department.

So, how do you pay them and what do they do? To start with, accessories can be part of it, but a very small part. They should talk to every customer who purchases anything at the dealership. If you have a branding program or a retention program, they should review it with every customer. Explain the benefits and how everything works. If you have a customer Website, show them how to set it up, and do the same with an app. Explain your rewards card, your lifetime program or whatever else you are using to separate yourself from the competition. This person becomes a liaison between the customers and all the other departments. He or she can train everyone on the customer retention program you have developed, plus track the results and review them monthly with the rest of the management team and make sure we are achieving best-in-class retention numbers.

But, like everything else in our business, we need to figure out a way to pay for it. This, however, becomes the easy part. Not only will new public relations directors pay for themselves, but it could become a new profit center for the dealership. Think about it — only 18 percent of our customers buy a prepaid maintenance program when they purchase a car. The PR director could spend time on the service drive reviewing our maintenance program with every customer who comes in for service.

But why stop there? Develop a menu for the service drive. Everyone knows that the service writers are too busy to sell product on the drive. With a well-developed menu that includes pictures and features benefits, why not offer key fob, wheel and tire, ding and dent and any other protection or products they may not have purchased when they bought their car? The options are endless. I know a dealer in Tampa whose No. 1 salesperson just works the service drive and Internet leads. When they refer the customer back to sales, they can get part of the commission.

Extended service contracts are another source of income for our PR director. Again, many people in our service department might be interested in an extended service contract if someone just took the time to explain it to them. Have printed material that explains to every customer their options for an extended service contract and have the PR director explain each in detail. Going further, you could develop an online program to sell accessories and F&I products and have this department manage it.

Every dealership needs bright young talent to grow their business. This program will not only put focus on developing this talent, but it will put better focus on creating the “Apple Experience” in our business for every customer. Loyalty and retention — the future is now.

– Jack Garrity

Follow up to the Public Relations Specialist article

I have had a few calls from people about last month’s article. The main question was how you would go about setting up this type of program in a store. I will try to outline the steps I would take to develop the Apple Experience in the service drive. What we suggested was a way 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’ drill down on some of these things in a little more depth.

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 600.00 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 that is 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 200.00 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 I-pad. When the customer comes in for service we pull them up and we have a list of what they purchased in F&I and when they bought their car. 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 like key fob coverage, wheel and tire coverage or ding and dent. The public relations manager can then 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 sells. We could also wrap it with an equity mining tool and he 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 target marketing campaign. Sell bed liners to truck customers, 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 his fingertips he 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 relation/ 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 of the other departments in the store. If you have a rewards program, a customer website, a customer app, weekly coupons, 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 data-base and develop your store into the customer’s dealership for life.

– Jack Garrity

January E-Blast Templates Are Here!

January Templates

January e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. View templates here

NADA100 Convention in New Orleans

Join Dealership for Life at NADA100 (Booth #6115) in New Orleans January 26 – 29, 2017 and see how your dealership can benefit from our full range of dealer branded retention and marketing products. Since introduced in 2004 we have become the leader in administering lifetime powertrain, lifetime engine, and rewards programs for dealers all over the US and Canada. Our process is designed around many of the best practices used in the loyalty business today. Some of which include, individual customer web sites, retention generated custom email campaigns, interactive customer mobile app, full DMS integration and monthly in-store sales/service training that is unmatched in the industry.

What are you doing to retain your customers? Are you rewarding your customers? Stop by booth #6115 and talk to the industry leaders.

“Our business has grown 320% in the last ten years due in large part to the loyalty and marketing programs designed by Dealership for Life. Their efforts and results have had a significant impact on every department in the dealership.” Chip Doetsch – President of Apple Ford Lincoln

“Now that we have been on the program for ten years, it works as advertised. Eight out of ten customers come back to our service department compared to three or four for the average dealer.” Ken Shreve – President of Hamilton Hyundai

“With over 30 years of experience in the automotive customer service and repair industry, Rick’s dealerships achieved sales to service customer retention at over 90%, making it ranked #11 in the nation” Rick Manring – VP of Fixed Operations

Stop by booth #6115 and talk to Chip, Ken, Rick and the rest of the industry leaders.

New Year E-Blast Templates Are Here

New Year e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. View templates here

December E-Blast Templates Are Here!

December Templates

December e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. View templates here

November E-Blast Templates are Here!

templates

November e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. View templates here

Have you noticed how Customer Retention is the new Buzzword?

blog

WOW! Have you noticed how Customer Retention is the new buzzword? For many years it was CSI and Manufacturer’s pushed it via incentives. Dealers quickly complied and after a while realized that improved CSI scores were good for the Manufacturer (why they are willing to pay incentives), great for the customer due to improved processes, cleaner facilities and more amenities, but not a game changer for the Dealer. The truth is CSI really has not done much to grow the dealer’s business. Since all Manufacturers have a CSI program, the bar of expectation has been raised and all Dealers have arrived at the same plateau of Customer Service.

Lets talk Customer Retention. A program to retain the customer after the sale makes so much more sense on many levels. However, many Dealers are in denial about this important aspect of their business as most think they are doing a good job of keeping their customers coming back. They believe all you have to do provide a good experience and they will return. They are led to this belief by past experience of retaining approximately 35% of their sales customers. Now the Manufacturer is getting in the game of retention and has set goals of approximately 50%. The truth is if you are not retaining a minimum of 75% of your customers your retention program is not working efficiently.

I am always amazed by how many Dealers believe a good CRM is all they need. They believe giving the customer a free oil change will work. I often hear “We treat them right and they always come back”. The truth is I have not found a single Dealer that does not have a goal of providing great service. This is what I call a 1970’s mentality. Customer Retention is not doing some things right, it is doing everything right in every department. Start by asking yourself what you are doing for the Customer in each department and is it working. Do you have a process? You must establish a culture of Customer Retention that encompasses your entire business.

Once you have a program do you measure it? All dealers can tell you daily where they are in Sales, Service, Parts, and Finance. These results are measured monthly and compared against previous months and years. But do you measure your retention? Most will answer yes to this question and base it on what the Manufacturer tells them it is. The problem with using this method is you are only measuring approximately 50% of your business. Isn’t your Pre-Owned Buyer even more important than New? Gross profit is typically higher and the need for service and maintenance is certainly much greater. What else should you measure? How about email and mobile phone capture rates? These are absolutely essential to be successful in todays’ business environment. Without the proper tools in place to track these metrics you are flying blind.

Most Customers have already shopped you online before entering your business. Communication with this medium in today’s digital world is a must for your success. Smart phones are now the acceptable norm so you should plan on a mobile application to represent your business and communicate information to your customer. There are many tools you must employ to have a successful Retention Program. A Benefits and Rewards Program, customer specific Web Sites, Membership cards, standard email communications program, Social Media are but just a few of the components you need. Whatever program you design should take into consideration all of your customers whether they are paying cash, financing, leasing, servicing or purchasing parts.

Hand-in-hand with your retention program should be Dealer Branding. This should be your program to enhance your business, not the manufacturer. As with any program, training is essential and must me an ongoing endeavor. Also, reviewing reports that tell you how well your program is working and sharing these results with every manager.

As you can readily see, putting a Customer Retention Program together is not just “treating the customer right and providing good service”. You must have a comprehensive plan that when implemented changes your mindset towards how you conduct your business on a daily basis. I do not mean to imply that it is easy. It is not! But, it is worth the effort and will pay off in the long term by returning your customer back to your business for all their automotive needs.

October E-Blast Templates are Here!

October e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. View templates here

Expectations!

expectations blog

An expectation is something we think about but maybe we unconsciously take for granted in establishing our dealership’s culture, or the way we conduct business on a daily basis. Do we really take the time to fully understand exactly what this word means? We should, because it is an important key to our success as an automotive retail dealer!

Consider that at birth even a baby has expectations…they expect to be fed, have their diapers changed and to be held and spoken to. Once starting school the same individual has the expectation of a decent education, a roof over their head and food on the table. As we become adults we learn to have expectations about life and everyday tasks. When you go to an airport you expect to get on a plane, leave on time and arrive safely at your destination. Eating out you expect your waiter to be knowledgeable, considerate and provide you with exceptional service. You expect all businesses to treat you with respect and appreciate your business. If at any time your expectations (real or imagined) are not met. You find alternatives. Most often this means you go to another business that meets your expectations.

In the Automobile Retail business it is the same. Our customers have expectations. Ones we are all familiar with are that they can find the vehicle that suits their needs, get a competitive price, a fair appraisal on their trade, be treated with respect and appreciated. We know that when any of these expectations are not met you most often miss the opportunity of doing business with this customer. If you are a dealer you know all this and you strive everyday to meet these expectations. In other words, you are very similar to all other dealers in your market. Your very existence depends on your employees stepping up every day and doing what is expected to perform in your business culture.

The question is how do you set yourself apart from all the other dealers? We think about this daily and are always searching for the “next best thing”. The only way to be really different is to exceed expectations! Accomplishing this task is an ongoing quest for most dealers. If the dealer down the street puts in a car wash, you have to have one. If they install a playground for kids, you have to also install one. This is a constant tit-for-tat that has existed since Henry Ford started building vehicles. The only way to be really different is to exceed their expectations. The solution is very simple and it’s right under your nose. You have the means to truly stand out among the competition if you look around at the opportunities you have to earn your customer’s business and create more opportunities to increase your existing profit centers.

A simple solution to truly exceed your customer’s expectations and wow them with how different you are is to supply them with a package of benefits that you will provide as a part of obtaining their business that makes their ownership experience a safe, economical, and rewarding one. These benefits can be as basic as complimentary car washes, oil changes, tire rotations and inspections. Coupled with an ongoing rewards program that gives your customers a reason to return to you for all their automotive needs is a winning formula and will exceed their expectations. When you do these things you have moved the customer experience at your business to another level. A level that truly makes you different and gives your sales customers more reasons to return to your dealership and allow you to provide everything they need during their period of ownership.

Roy Olive – Corporate Training Director