Perhaps no other product can do more for a dealership than a dealer management system (DMS). A DMS allows you to effectively manage every aspect of your store using real-time data. Newer systems that offer outstanding data collection, integration, and reporting are continually hitting the market, allowing greater efficiency in every area of your business.
Now that you have all this customer data at your fingertips, it is time to put it to use to generate revenue for your dealership. One way to leverage this treasure trove is by remarketing products such as vehicle service contracts (VSC) to existing customers. The revenue from such a program is literally found money.
Find money with VSC remarketing.
Vehicle service contracts are a perfect product for a remarketing effort. They are widely accepted and understood by consumers who view them as prepaid maintenance at a fixed cost. With the complexity of todays vehicles, unexpected four-digit repair bills are not unusual. A VSC provides much-needed peace of mind regarding those costly repairs, allowing customers to simply pay a small deductible (or nothing at all with a zero-deductible policy) while the dealer and warranty provider handle the rest.
VSCs offer value to dealers in multiple ways. First, the contract itself is a high-margin sale that generates nice revenue. More importantly, VSCs drive more business to your service lane, creating an additional and (hopefully) repeating source of revenue. The convenience of a VSC also enhances the ownership experience, which can translate to higher customer satisfaction and loyalty in the form of repeat vehicle sales.
Dealers are not the only ones to recognize the opportunity of vehicle service contracts. If you are not marketing them to your existing customers, you can bet that manufacturers and warranty companies will, but since they cannot match your enviable combination of detailed customer data and solid, first-person relationships, you must create a remarketing program that leverages those advantages.
Develop a remarketing program.
As with all successful sales, timing is a key component of a VSC remarketing program. Customers who purchased a car from your store with some factory warranty remaining should be contacted just before that coverage expires, typically when the vehicle reaches 33,000 to 44,000 miles. For customers with vehicles outside of factory coverage, be sure to reach them once they have had a chance to evaluate their long-term commitment to that vehicle. Ninety days after purchase is a good benchmark for these customers.
Creating these customer buckets will require religious use of your DMS to track vehicle purchase dates, factory warranty coverage, and anticipated current mileage. Your dealership should also track service-lane visitors without an existing VSC, regardless of when they purchased their vehicle. This is another target population you can include in your second-chance campaign.
Initial contact should be made by mail within the appropriate window. The piece itself should be simple and professional, with your dealership name and customer history prominently mentioned. About a week after the expected delivery date of your letters, conduct a round of follow-up calls to customers when you expect them to be home. This solid one-two punch of a targeted letter followed up quickly with a phone call can greatly improve the response rate of your follow-up campaign.
Dont try it alone.
If you are wondering how you are going to do all of this, you are not alone. A third-party partner who can use that data to create marketing pieces and conduct professional, timely follow-up in a transparent manner by acting as dealer representatives can help generate revenue without requiring your sales staff to lift a finger. This revenue is truly found money- rather than pay for the service, dealers are paid for providing data to a remarketing partner.
Do not just collect customer data- put it to use to help create new revenue streams for your dealership.