How Paragon Honda and Acura Became #1
How Paragon got the Triple Crown for selling more Hondas, Acuras, and Certified Pre-Owned vehicles than any other dealer in the world
It is extremely difficult to increase market share ranking among the top 20 Honda and Acura dealers in the country. Paragon, however, has managed to move up in market share for both brands, from #17 to #1 in Honda New and Used and #36 to #1 for Acura New and Used, and became the #1 Certified Pre-Owned Dealer of the Year in 2010 by selling over 4,000 Certified Pre-Owned. Paragon continues to break records, selling 338 in CPO last month—an all-time Honda CPO record. How did they do it?
Paragon was spending a lot of money on mass marketing and was attracting a lot of customers, but not always the right customers. By casting a broad net with mass advertising they were attracting customers that were not profitable and had a low probability of returning for service and repeat sales. These customers cost more to attract, but generated less revenue, so in the end Paragon was spending too much money per sale, trying to reach the 15 plus million people across the New York City area. An unhealthy gross and a slim chance of customers returning for service or buying another car from them, meant ultimately the lifetime value of these customers was negative.
“We used to pride ourselves on selling customers from across the entire city and state, but after analyzing our numbers we learned those customers are usually not profitable and not loyal, because it’s difficult to retain them for service and repeat sales,” says Brian Benstock, VP and general manager of Paragon Honda and Acura.
Another problem that Paragon faced was working with multiple vendors that had different messages and often competing strategies that were not integrated and confused not only the customers, but also the employees.
Paragon’s goal was to create one strategy, work with one company, and develop an integrated marketing platform across multiple mediums that included research, targeted marketing, traditional, digital, public relations, social, niche marketing, and merchandising, so the message that the customer receives is the same whether it’s seen on television, heard on the radio, viewed online, or on the showroom floor.
While there is no one answer to how Paragon has achieved great success, there is one key approach—they aggressively seize opportunities to implement integrated marketing strategies to attract in-market consumers to buy and service their vehicles with their dealership and they deliver a world-class customer experience that not only ensures customer satisfaction, but also customer loyalty.
In 2009 Paragon seized a big opportunity with the Cash for Clunkers program. When most dealerships were trying to figure out what to do, Paragon quickly seized the opportunity by creating a comprehensive strategy that included a dedicated clunker website, targeted marketing to people who qualified for the program and a publicity strategy that landed Benstock on Fox, CNN, ABC, NBC, and on the home page of MSN.com two days in a row for selling the first clunker customer in the country. Paragon became #1 selling Honda dealer in country for Cash for Clunkers.
More recently, Paragon Honda aggressively capitalized on the ninth generation release of the Honda Civic. The launch of the 2012 Civic is the biggest new vehicle launch in American Honda history and is projected to pull a record number of consumers into the market. The manufacturer is spending a substantial amount of money to drive Civic customers into the market, and the most successful dealerships, like Paragon, are leveraging this launch to attract those consumers into their showroom.
Paragon has implemented an aggressive strategy to attract as many Civic customers into their showroom as possible. Their Honda Civic campaign, like all their marketing strategies, is a comprehensive integrated campaign across multiple tiers including targeted mail, search engine marketing, digital, social media, publicity, and merchandising.
First, Paragon performed in-depth market research to identify perfect prospects for the Honda Civic campaign: current Civic owners and consumers driving models that have a high statistical probability of crossing over into a civic, like the Toyota Corolla.
Next, Paragon sought to contact these consumers to notify them about the Honda Civic Upgrade Program via direct mail, email, and text. The campaign message offered buyers additional trade value for their current vehicle and the same or lower monthly payment to upgrade to a brand new 2012 Honda Civic. The campaign drove customers to a campaign website that provided an upgrade calculator that compared their current car to the new Civic, and displayed all the upgrades and improvements of the new Civic compared to their current vehicle, as well as, how much money they would save in gas with the new Civic monthly, annually, and over a five year period. A typical consumer can trade-up from a 2007 to a 2012 with over a hundred new vehicle feature enhancements while saving thousands of dollars in gas—a fact based value proposition that is hard to resist and as a result Paragon got more than its fair share of customers with this hard-hitting campaign.
Paragon also implemented a social media component that was centered around a viral video, the 2012 Honda Civic “Heritage” Video, the centerpiece of the Tell Your Story campaign that is aimed to create a visual experience that best represents the theme: “One Car. A Million Stories.” The video provides Paragon with a custom viral video to inspire traffic and consumer engagement, both on and offline.
The video brings a human element that promotes a generational feel, and connects the Civic with its far-reaching fan-base. “Capturing the Civic’s evolution in correlation with the various people featured in the video was key in attaining the correct tone,” says Sean Wolfington, owner of www.Tier10Marketing.com, the agency that Paragon uses for all its marketing campaigns. Over 50,000 people have viewed the video.
Consumer engagement is paramount to any social strategy, and to further the social media element of their campaign, Paragon launched the Tell Your Story contest that has been implemented to drive user interaction. To enter, contestants visit www.facebook.com/NewCivicand enter their Civic-story as a comment on the “wall.” The story with the greatest number of “likes” wins an iPod Touch at the end of every month during the promotion. This interactive incentive incorporates a viral component to the contest. Organic campaign promotion and positive word-of-mouth branding are just two by-products to benefit Paragon Honda.
While Paragon has executed the basics better than their competitors by targeting and marketing consumers with integrated campaigns that are consistent and credible they have also blazed trails and innovated in ways other dealerships have not, including an aggressive Latino marketing strategy, over half the customers in Queens are Latino, and a concerted effort to sell cars to customers in their service department that has resulted in an additional 75-100 vehicles sold every month out of their service lanes.
Paragon has also delved into the future with digital signage that reveals what the dealership of the future will look like with video walls showcasing new products, plasma presentations that emphasize the unique advantages of doing business with Paragon in both sales and service, and even broadcasting a closed-circuit television station that customers watch while waiting for their vehicles to be serviced. These televised broadcasts feature positive programming and videos about Paragon’s vehicles, like their Certified Pre-Owned Program, as well as, educational videos on how to better maintain your vehicle, as opposed to what many dealerships offer: traditional television featuring Jerry Springer, interrupted by ads from their local competitors. Paragon’s digital signage is also complimented by Apple computers on every desk and iPads for all sales staff to engage and help educate the customer on the value of doing business with Paragon and the products and services they offer.
Paragon is successful, because of their unique and aggressive style to capture the moment and seize opportunity. They perform diligent research of in-market consumers, they reach out to consumers with integrated campaigns, and they innovate where other dealerships do not, like through Latin marketing or selling cars out of their service lanes, as well as, leveraging technology throughout all of their departments to create a better customer experience and increase their profitability. Paragon has one strategy and one message integrated throughout multiple tiers. They identify opportunities in the market place where the demand has increased and they are better than their competitors in bringing that new demand to their dealership like they did with Cash for Clunkers and the 2012 Honda Civic—and they will continue to do so.
John Zeiglar is a performance consultant from Performance Company. For more information, please email Jzeiglar0@gmail.com.