Category Archives: News

Add a little Magic to the Experience

I find it fascinating that everyone in the automobile business doesn’t use a rewards card to thank their customers for their loyalty. I don’t know the exact numbers who do but in the course of visiting over 200 dealerships per year it is a very low percentage.

Every industry wants to keep their customer engaged and coming back. How many people fly and don’t sign up for the airline rewards card? The same goes for hotels, grocery stores, and gas station. When you think about it, most of us have multiple rewards programs we belong to and get rewarded by.

The psychology of these programs is pretty simple to grasp. I’m going to spend my money with you and in return you will invest in me to get future business. This is a true win, win for both the customer and the business. How many people have stopped using cash all together so they can put their purchases on a credit card that is connected to a rewards program? The entire loyalty equation is changing. People don’t buy from you because their parents did. The prices on most products are already bare bones so they don’t just buy because it cost less. They don’t always come back because we treat them right. Customers know if you don’t appreciate their business, someone else will.

In the cost conscious world of the automotive industry some may look on reward cards as an extravagance. This does not have to be the case. A small percentage back can add up quickly for the customer and over time all of these visits will create numerous RO’s. Think of it this way, a coupon for a 9.95 oil change will cost the service department twenty or thirty dollars or more. Mostly like this will bring us a price buyer who spends money just for the oil change and we never see them again. That same money credited to a rewards card might bring us two or three RO’s and over time a loyal customer who continues to use the dealership for all of their automotive needs.

The difference between a rewards card and coupons or discounts are pretty significant. The latter is a bribe. We are spending money to gain business and hoping it leads to more business. With a loyalty card it is just the opposite, the customer gives us business and then we give them the thank you. The best part about this method is we have thanked the customer but he needs to do more business with us to reap the reward. Let me go over that one more time, when you use a discount or coupon the cost is up front and final. When you use a loyalty card the recognition is up front but the cost is down the road and is developing future customers not one time buyers.

The synonym for reward is award. Isn’t that what it is really about? We all want to receive an award for what we do. We give awards to our top athletes, our top writers, actors, and scholars. The same principle must apply to our customer base. How are you awarding the customer for doing the performance you want?

Reward cards are an intricate part growing your business. It is easy for the customer to understand and very cost effective. It answers two of our most important questions, why buy here, why service here. If we are not reinvesting back into our customers we are wasting a golden opportunity.

The Realistic Expectations

You are thinking that you need a retention program to move your business model to the next
plateau but you are not sure of what to expect? I have been training and installing retention
programs for dealers for close to 10 years and here is what I know.

A Golden Rule in the creation of a Loyalty Program is to never start a retention program unless
you are 100% committed to it. What I mean is that you are going into it with realistic expectations, you are looking at it as a long-term program and that you will work to ensure it
becomes a culture in your business. When you open the doors each day it will be a priority and
the way you conduct your business!

Let’s talk about the realistic expectations. There are immediate short-term gains, but you must
be patient to realize the long-term success of your program. I will break down into 3 categories
what you should be looking for. These categories are Sales, Service and Repeat Buyers.

Sales: Immediately, you will be offering a greater value-add to your customer in the buying
experience which, if properly implemented, should result in higher front-end gross profits,
added sales volume, higher CSI scores, more referrals and additional tools to make it easier to
close more deals. You want to think of the benefits you offer as a “Why buy here instead of
from my competition?” Most importantly, it will set you apart from your competition. They
simply will not be able to compete with you on VALUE. Some common components that make
up the benefits that you could offer each sales customer are Engine Guarantee, oil changes, tire
rotations and car washes. These each have a high perceived value and help to overcome price
objections. You couple these benefits with what you already are providing, such as Gourmet
Coffee and Snacks, Children’s play area, shuttle service, pick-up and delivery service, etc. and
you have just moved to a new plateau in how you value your customer. It is like the verse in the
bible, Luke 6:38,and I am paraphrasing, “Give and you shall receive”.

Service: If you are like most Dealers you probably fall somewhere in the range of 30 to 40%
retention currently (as measured only by NEW vehicle sales and reported by your OEM based
on 2 service visits within the first year after purchase). A properly designed, value-add,
retention program will double your current percentage of sales customers that are using your
service department. Rewarding your customer each time he services with you gives you a great
opportunity to up-sale at the next visit through “found money”. It is a more honest way of
conducting business in that the customer begins to feel that you have a vested interest in taking
care of them by keeping them safe and operational. Each visit is an opportunity to prepare for
the next visit and set realistic expectations on what services will be needed. You can expect
your absorption rate to move closer to the gold standard of 100%, an increase in the number of
repair orders daily and more customer dollars spent per RO. In every case where we have
conducted an audit of who spends more, we find that the customer that is a member of your
retention program spends anywhere from $12 to $226 more per visit than a non-member
customer. An increase in repair orders results in more labor hours and more parts being sold.

Repeat Buyers: A customer that bought from you and serviced with you during their ownership
cycle will return to you for their next vehicle approximately 86% of the time vs. a customer you sold and who never serviced with you returns to repurchase less than 25% of the time. It is a
reality that it is much easier to resale a vehicle that you originally sold new and serviced. You
want this trade-in as it is much more valuable than an auction vehicle! The typical time this
type vehicle stays on your lot is approximately 2 weeks. By installing a well thought out
retention program you are guaranteeing that you will increase your % of resales and receive a
highly valuable trade-in as a part of the deal. You have created a “Pre-Owned Vehicle Factory”.

-Roy Olive

Keep Customers Engaged and Motivated for the Long Term

 

Retention is great for every business, and no one has better retention than the National Football League. Teams like the New York Giants have a 10-year waiting list for season tickets. We can probably never achieve that level of retention in the automobile business, but we can do much better than we have been.

Automotive business has been strong for a long time. Can’t we forget about retaining customers when so many people are just wanting to buy a car? Th e best way to grow our industry is not to sell more cars, but to retain more customers. Anyone who has been in this business for any length of time knows how cyclical it can be. Sales will go up and down, but a good service department never has to deal with down cycles.

We can talk all day long about all the things dealers think they are doing to build retention. Most programs, however, are just like throwing darts against the wall. If you don’t have a way to track it, a comprehensive program that works for every department and a plan for long-term success, you are probably wasting your money.

Customers want to be engaged. Easier said than done. We need to give them reasons to come back. How do we get them excited about doing business with us long term? Let’s lay out a program that will keep your customer engaged and motivated year after year.

First, we need to provide customers with reasons not only to buy here but to service here. A valid lifetime engine program can accomplish this and, in many cases, can be reinsured to offset potential liability. Next, couple this with an oil change program sold in F&I. Unlike prepaid maintenance, an inexpensive oil change program can double retention for three to five years.

Next, look at the digital side. Dealer Websites are generally good, and so are dealer mobile apps. From a retention standpoint, though, a personalized Website for each customer and a customer-centric mobile app are more successful in engaging the customer. This allows you to customize your message to each person in your database. Blanket CRM reminders work, but a better method is to create customized graphics with service specials, birthday greetings, service reminders, announcements of community events and all other direct communication you want to have with each customer.

How do you thank a customer for doing business with you? A nice note from the dealership? A call? A picture of them in the showroom? Th e airline and hotel industry have shown us for years what works. Copy this type of program and you can’t go wrong. Everyone wants to be rewarded. A customer likes it when they think, “I spent some money with you, but you are reinvesting some of it back to me as a thank you.” What keeps a customer more engaged: $100 off a set of tires or a box of cookies?

Retention is often overlooked on the service drive. Why not take the same oil change program you developed for F&I and sell it to everyone who uses your service department? Approximately 80 percent of customers who buy a car do not buy prepaid maintenance. Here is a great second chance to capture them again — and when you do, they will be loyal for up to three to five years. Finally, use your database to keep customers. More and more people want to shop from the comfort of their own home. Develop an online store to keep your customer always thinking of you for their automotive needs. Offer the oil change program and service contracts. Allow them to shop for tires, batteries and anything else they might need, but often buy elsewhere.

This is the path to successful retention. A program like this will create a retention rate of 75 to 85 percent. It is cost effective and, in most cases, highly profitable. More important, you can track it, see what is working, where it is breaking down and tweak it each month to get the best results. Most dealerships have a lot on their plate and the meat and potatoes of the business consumes most of the day. Retention is easy to overlook, but in some cases you are picking up dimes as you walk over dollars.

– Jack Garrity

A Dealer’s Approach to Retention

We’re a talkative bunch at our Dealership and the thing we really enjoy are conversations we have

with our customers.  Sports, weather, and yes – even automobiles.  Over the years’ we’ve paid attention and even learned a thing or two from these conversations!  Vehicle owners tell us that keeping up with regular scheduled maintenance is the one thing that most find costly and inconvenient. They do understand how important this is to ensure safe and dependable transportation, but still find it hard not to feel this way. These conversations are what lead to the inspiration for our Lifetime program.  We decided we could help our customers feel a little better about taking good care of their cars.

Our Lifetime program was designed to make the “expense and inconvenience” of regular vehicle maintenance as friendly and convenient as possible and save our customers some money!  If we do our part and take care of them by saving time and money maintaining their car, we liked our chances that they will tell everyone about us. We looked at things this way …. it is the best advertising dollars we can spend. And we invest in the people who matter most – our Customers!  And so, our Lifetime service program was born……

With a New/Used vehicle purchase our customer is automatically enrolled in our exclusive program that provides these benefits at NO CHARGE!  It’s the way we do business.

Lifetime Oil Changes

Buying your next New/Used vehicle from us ensures that all your oil changes will be “on the house”!

Put another way…. Free!

Lifetime Tire Rotations

Replacing tires can be expensive, so we help extend their life by providing a complimentary tire rotation when you are in for an oil change.  We don’t want you to spend money on new tires any sooner than you have to……we’re sure you could use that money for other things!

Lifetime Car Washes

The oil changes will keep your vehicles’ engine clean inside, but we’re going to go one step further! We’ll help you keep the outside of your vehicle clean as well!  Just bring your vehicle by the dealership anytime we’re open and we will run it through our automated car wash.  Yep, you guessed it, we’re not going to charge you a thing — all your car washes are “on the house”!

Lifetime Engine Guarantee

When you see a vehicle on our lot, our Factory/ASE certified technicians have checked it over and we have confirmed it is mechanically sound and meets our requirements to be offered for sale — to an employee family member or a stranger.  One is as important as the other in our view. We know that we must stand behind what we sell ……. that’s just good business. It is how we have built our reputation. As part of our program we are now going to take this a step further than the typical dealership.  As the old saying goes….

” We are going to put our money where our mouth is!”

 

New/Used vehicles purchased from us are provided a Lifetime Engine Guarantee.  To enhance the value of the complimentary oil changes, periodically perform minimum levels of preventative maintenance on your vehicles’ fuel and cooling systems and we’ll stand behind the engine for as long as you own your car!

 

We are not here to sell you services you don’t need at prices that are not competitive.  That is not how we do business.  We are here to help you maintain your investment and manage your transportation costs by providing legitimate services at competitive pricing. Earlier we mentioned how expensive tires can be, well, so are vehicle engines!  Service industry data consistently shows that the primary cause of vehicle engine failures is the lack of regular preventative maintenance on one or all of an engines’ oil, fuel, and cooling systems.

 

We want to do our part to help you avoid this potential expense…… and it starts by providing you with complimentary oil changes. If you see value in our Lifetime Engine Guarantee, you can take it from there and stay on top of the fuel and cooling system maintenance.  Your choice either way. Regardless of what you decide, the oil changes are always complimentary.  Our Service Team can explain all details and benefits as well as answer any questions you may have regarding these services.  They will always keep you informed as your vehicle approaches the recommended mileage intervals of these services.

It’s that easy to have lifetime peace of mind when you buy and service with us.

 

Multi-point Vehicle Inspection

And finally, every time your vehicle is in for a complimentary oil change and tire rotation, we will also perform a multi-point vehicle inspection so we can keep you up to date on the overall condition of your car.  Update you on things like brake pad measurements, fluid levels & condition, tire tread depths, condition of hoses & belts, etc.  We don’t want you to be blindsided with an unexpected service bill or find yourself stranded along the side of the road because no one was paying attention.  We want to be your dealership for life so we understand we are in this together.  The fact of the matter is simple – vehicles require regular maintenance to keep them running efficiently, dependably, and safely.  The sooner we both understand the overall condition of your vehicle each time it is in our shop, the better we can help you develop a plan to keep you on the road and help you manage your transportation dollars.  This regular Multi-Point Vehicle Inspection allows us to do this.  For us it’s never been about finding service work to sell you, but rather about performing the services and repairs you truly need and priced competitively to keep your ownership experience as affordable and hassle free as possible.

 

That’s our story……it’s why we do what we do.  Thanks for allowing us an opportunity to share it with you.

Freebie Love

Freebie Love

I read an article recently in USA TODAY under the heading “ Expect some freebie love when buying a new car “ The article mentioned the things Dealers use to reward customers with, such as a free tank of gas, a second set of keys, floor mats, etc. The article pointed out special perks,  such as service vouchers, window tinting, manicures, fresh coffee and cookies.  It even listed some extravagant incentives,  such as big screen TV’s and AK 47’s!

This got me thinking about a couple of things: first, how far we have come as an industry in trying to create happy customers after we have sold someone a car.  I have seen it go from  service-drive waiting rooms,  nice furniture in the service lounge,  donuts to bagels and lunch counters,  big screen TV’s,  to wireless internet, all in an effort to build a pleasing environment for a previous sales customer; Secondly,  just how many of these rewards/perks are so poorly thought out.  What is the purpose? Are we just spending money to make someone happy or is there a strategy behind these efforts/expenses?

Most of the rewards/perks mentioned in the USA TODAY article are like throwing darts, you don’t know what the target is.  A reward is something someone earns for doing something YOU want them to do. A bribe is something we give to someone in advance, and then hope that the desired behavior follows.  A good example of this is when we are raising children. If you say, here is an ice cream so be quiet,  that is a bribe. On the other hand if you said, be quiet until we get home and I’ll give you an ice cream, that is a reward. The items mentioned in the USA TODAY article were all bribes.  Everything mentioned is nice but purposeless. If we are rewarding them just for buying a car, great but if our objective is to create a customer for life, it’s going to take a much better plan than a free tank of gas.

Airlines and hotels do rewards best. “Fly on our plane, spend money with us and we’ll give you points for future travel”. The same works with hotel rewards. They say, do the behaviors we want, book a room, spend money, and we will reward you with points you can use later. Rewards work much better than perks to create a long-term relationship with a customer who has purchased a car.

When setting up a rewards program the first thing you should decide is, what’s important? If it is the old theory of “just sell the car, there are 10,000 people moving into this state every month”, then just stick with perks. On the other hand, if you want to grow your business with a deep customer base that will support you in good times or bad, you may want to look at a program of rewards that will thank the customer every time they perform services with you.

Free floor mats are nice but for the same expense we could give them a rewards card that can keep them coming back to the dealership for years. We give customers plenty of reasons to buy here, price, payments, terms, but very few reasons to service here. Why not design a program to keep the customer in your service drive for the life of their purchase. JD Powers says that if you keep a customer in your service drive twice a year for the entire time they own their vehicle, they will repurchase 86% of the time at your store. Take a minute and let that sink in. What a great way to incrementally grow your business.

There are many ways to design a program to give a customer a reason to service their vehicle at our store. Some of the best proven practices include, lifetime engine, lifetime powertrain, oil change programs, rewards cards and customized prepaid maintenance packages. Many of which can be reinsured.  These options are not perks, bribes or hit/miss. All of these have proven to keep the customer coming back year, after year. They are trackable, effective, and profitable.

So before you spend 400.00 in marketing every month to get someone to walk in the door, think about designing a program with a long-range purpose behind it. Freebie love should last longer than a one night stand.  Design your vows and have a long-term marriage with all of your customers.

– Jack Garrity

Why you should visit NADA Booth #6115

NADA100 Booth #6115

Dealership for Life has been helping hundreds of dealerships across the country retain more customers every month with our customized marketing and retention programs that BRAND each dealership specifically!

What are you doing to retain your customers? Is your Service Department busy?

Stop by NADA Booth #6115 and see how your dealership can benefit from our full range of dealer branded retention and marketing products. Since introduced in 2004 DFL has 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.

Dealership for Life is the most comprehensive marketing and loyalty program in the country. With territory exclusivity, DFL will provide the competitive edge over other dealers.

Enrolling over 30,000 new members for DFL Dealers each month and retaining an average of 80%. Over 2 Million since 2004!

“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

“Loyalty always starts with a great experience. Give them a reason to buy and a reason to stay. When your staff is offering great customer service and following the processes in place, customers would have no reason to defer their business to anyone else!” Jack Garrity – DFL Partner

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

Stop by NADA100 Booth #6115 and talk to Chip, Ken, Jack, Rick, and the rest of the industry leaders.

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

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.

2016 Women In Automotive Conference

DFL_WIA_facebook_Event-Cover

Join Dealership for Life at the Women In Automotive Conference on June 26th – 28th and see how your dealership can benefit from the custom programs DFL developed to brand your business, administrate your marketing and retention, train your staff and produce added sales and service profits that set new standards in the industry.

Dealership for Life includes Administration, Full sales and service DMS integration, customer tracking, follow-up, personalized app plus online claims. DFL specializes in reinsured Lifetime Powertrain or Engine and reinsured Prepaid Maintenance, plus state of the art rewards programs. All our programs are customized with exclusivity for your dealership.

DFL administration includes in-house representation on a monthly basis with training that includes sales and techniques, service drive training, F&I training, and complete monitoring of your marketing and retention needs.

At Dealership for Life we pride ourselves on the exceptional ability of our graphics team, who will go above and beyond for any request our dealerships have. Our marketing designs are second to none and the return on your investment with our program will be substantial. We brand your dealership to keep you standing out from your competitors with custom graphics, e-mail campaigns, web design, social media advertising, print material and much more. All graphics are included with our administration at no additional charge to all DFL dealers.

EVERYTHING You Need in ONE Administrator. Give your customers reasons to return to your dealership!

“In our service operation we see about 162% of the average number of customers per 100 vehicles that other Ford Dealers would see in our market.  Average dealer sees 100 customers, we see 162!” –Chip Doetsch – President of Apple Ford Lincoln, Columbia, MD

“Now that we have been on the program for 7 years, it works as advertised.  Eight out of ten customers come back to our service department compared to 3 or 4 for the average dealer.” —– Ken Shreve – President of Hamilton Hyundai, Chambersburg, PA

Women In Automotive offers:

-Carefully crafted agenda to educate and inspire women in all
areas of the automotive industry.

-Informational and empowering breakout sessions to educate
and share.

-The opportunity to learn about other women’s journeys in the
automotive industry.

-Booths highlighting educational opportunities and women’s
networks within Automotive.

-Keynote address

-Cocktail and networking receptions and meals in the exhibit
hall.