Retention & LoyaltyCommentary & Insights

Retention & Loyalty
right to repair act
Are Dealers Ready for “Telematics Right to Repair?”

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"Right to Repair" Significantly Expanded In the November, 2020 election, voters in the Commonwealth of Massachusetts passed a ballot initiative, Question 1 , by an overwhelming margin (75% approved). Question 1 requires that OEM's make diagnostic data collected remotely -- through OEM telematics systems -- available to individual vehicle owners and to independent repair shops. The 2020 initiative expands on a "Right to Repair" initiative passed in 2013. The original initiative required OEM's to make diagnostic and repair data available to individual owners or independent repair shops. In 2013, this meant that OEM's had to provide data access to diagnostic repair tools.  In 2020, this requirement was expanded to include data collected remotely through telematics systems from vehicles that are on the road. The original "Right to Repair" was also first passed in Massachusetts, but in 2014, the Alliance of Auto Manufacturers signed a memorandum of understanding to support implementation in all 50 States and the District of Columbia. This move pre-empted "Right to Repair" initiatives in several other States that were similar to the one in Massachusetts. With the "Telematics Right to Repair" initiative of 2020, however, the Alliance is challenging the expansion of Right to Repair into data collected through telematics systems. The trial began on June 15 and is ongoing. If the Telematics expansion is allowed to proceed, however, dealers should be thinking about the implications to their service business, because this expansion might be much more significant than it at first appears. "Right to Repair" and the Connected Car On the surface, expansion of “Right to Repair” to include telematics may not seem like a big difference. But the difference has the potential to be enormous for service retention, which is why independent repair shops and service chains fought so hard for the Massachusetts initiative. With this change, customers will be enticed to set up an ongoing remote connection to their service provider of choice, putting that provider in the best position to capture and retain that customer.   Once this system is in place, a visit to the local quick lube shop, tire store, or parts store will change. As the customer wraps up an oil change, for example, the attendant will ask the customer to authorize the shop to monitor the vehicle’s diagnostics. This will allow the shop to see when the vehicle is in need of its next service and send out a text or email with a perfectly timed service reminder. Well-run shops will eventually analyze their base of connected customers to determine the optimal time to bring them in – both when the vehicle needs service and when the shop has available capacity. Service shops and chains that do this well will cement a closer relationship with their customers and increase repeat service loyalty.   Alternatively, customers may choose to authorize an intermediate service “broker” to monitor their diagnostics and manage their vehicle’s maintenance. The broker will then be in a position to act as the customer’s trusted advisor, and will route service jobs to the most competitive service provider. Dealers Should Prepare Now The Independent shops and service chains in Massachusetts clearly hope to use this new initiative to gain business from franchised dealers (or prevent current business from being lost to Dealers). In order to maintain and grow the dealers' share of the non-warranty repair and maintenance business, dealers will have to make excellent use of the telematics systems installed by their manufacturers.  Dealers start with a key advantage, which is the opportunity to start a connected service relationship with the customer from the moment the new or used vehicle is delivered. But not all dealers today do a great job activating these systems, and activation for some OEMs is very inconsistent. Dealers must be sure to activate OEM-provided systems and secure customer consent to share service and maintenance data. Dealers then have to do a great job of managing data notifications to quickly schedule customers for any needed service work. Dealers may also want to take advantage of aftermarket systems for their older inventory that lacks OEM-provided telematics. A service like Spireon’s Lojack is a good example of an effective aftermarket system. Dealers will have a very brief head start to fine-tune their use of connected car service notifications, and they will need to take full advantage. If you are a dealer considering connected service and service retention opportunities, please reach out to motormindz to hear more about how to “get” Connected.  
storage boxes
The Saga of the Hdx 27 Gallon Containers and Your Dealership

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You Can Always Do Better... So, I sold my RV, (please hold your applause) and needed to buy HDX 27 gallon storage containers to keep “my stuff,” which had previously lived in the RV basement. I did what I always do, which is go to Home Depot to buy my favorite black and yellow containers. Upon entering a post-COVID-ish Home Depot, I noticed how few people were actually in the store. It was quite empty, actually. I proceeded to the usual place where my favorite storage containers were kept. (Yes, I have favorite containers – HDX 27 gallons with spiffy, stackable tops.) Lo and behold they were absent. I found a not-so-friendly man, in the requisite orange apron, and asked him where my favorite containers were. He gestured to the “end cap” and said, “they’re over there.” (Glad he didn’t strain himself with that one!) I walked over and (of course) they were not there. I came back and he was still standing in the same place. I explained (again) that those were the lowly 17 gallon containers and I needed the superior 27-gallon ones, please. He pointed to the floor where I was standing and said “Have you looked there?” (As if I had missed them the first time I brought him over to that aisle to explain I couldn’t find them?) I pointed out that those were the 17-gallon storage containers, not the 27 gallons that I have come to know and love. (You see in my garage I have approximately 40 of these beloved containers and they are stacked nicely and neatly and in a proper OCD fashion along the wall.)  He then proceeded to the computer where he looked up the SKU number so that he could find out if the containers were on the tippy-top shelves where I had looked for them before I asked him to locate them.  He announced the SKU number out loud, so we could both look together, to determine if we could physically see the location of my beloved containers. Now, to put this in perspective, a 27-gallon container is about the size of a grown Labrador retriever. They are hard to miss, but I continued looking and played along.  He left and then drove back to the aisle with the forklift-thingie which acts like a one-person elevator. (Meanwhile about 20 minutes have elapsed and I’m still looking for my containers.) He closed the aisle by stretching out two gates on either end of the each side, so no one could walk under the forklift-thingie. I think he was actually walking in slow motion.   Then, up he went. (Insert annoying noise here.) After 10 minutes aloft, he sadly announced he could not find the containers. (Immediately after he gave me the SKU, I had told him I did not see any boxes showing that SKU number, based on the old method of “looking up” from the floor where I was standing. He proceeded to look there anyway.)    After he came back down to terra firma on the forklift-elevator-thingie, (don’t forget to insert the annoying noise), I asked if he had looked at the quantity in stock when he initially looked at the computer. He responded “no.” So, he ambled back over to the computer. If this is agonizing to read, imagine how it was to be there.  Now, I’ve been in the Home Depot for almost 45 minutes. Mr. Orange Apron looked back at the computer and announced (quietly) “We have one hundred eight (108) of them. I’m really sorry, I don’t know where they are.” And they have 108 of them they cannot find. ARE YOU KIDDING ME? 108!  108 Labrador Retrievers you cannot find? Just to be sure, I walked up and down a few of the aisles to see what I could see. It was painful and fruitless. I left in a huff. (Usually, I don’t get worked up over these issues. This saga was particularly painful and dreadful.) I trudged next door (literally) to Lowes. They had 27-gallon containers made from another manufacturer. I was desperate, so I bought four (4)…from another manufacturer. They are shaped differently than the forty (40) in my garage but I was desperate.    Now, Home Depot’s ruined my OCD-themed garage because I have about forty (40) of my beloved 27-gallon container and four (4) of the runner-up, “The Commander” – the brand name – of another. (Isn’t that ironic as they are not “commanding anything in my garage?”) Every time I walk into my garage, I cringe. OK, while this was a long and now-amusing story, (not so much at the time), why am I telling you this, and how does this relate to running a dealership? Home Depot could have done better. So can your dealership. You can always do better than this. If I had seen a manager, I would have discussed it with him. I was so irritated, I didn’t go looking for a manager. It likely would have taken another 30 or more minutes. And when I left, I thought I should post a review online.  Or at least, I should post on Twitter where I would likely get a response.   I didn’t.  I just wanted to move on with my life.  After all, I’m dyin’ over here. I carried on.  I was irritated about aggravation over $60 worth of containers. Imagine how hot a customer gets when they are spending tens of thousands of dollars. How can you capture this feedback and mitigate the problem before the customer explodes online?  You could prominently post signage in your dealership asking for feedback. You could post a cell phone number for someone who could fix the problem. You could make sure the floor manager knows when there is an upset customer in the building so your managers can be prepared to act. Do you know the nature of the issues your customers face? Are you certain? How can you stop the problems before they happen? More training? New policies? You have to capture this feedback to attempt to prevent the problems before they start. (Risk mitigation!)  And what about aggravated employees? Ever considered an employee poll or human resources consultant? How can you capture their attention? (Remember, problems at a dealership are like rotten fish. They don’t smell better as time moves on…) And as for me, I’ll be standing in my garage staring at the odd-sized containers. (See attached photo.) If you are reading this #HomeDepot, please send me four (4) HDX 27-gallon containers quickly (and for free), and both me and my OCD, will feel much better. PM me on LinkedIn and I will give you my address!
They Called it Facebook for a Reason

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A phone rings in the middle of the night, startling a grumpy middle-aged college dean back into consciousness. The computer servers at Harvard are crashing. A sophomore student named Mark Zuckerberg has hacked together a little program called Facemash that allows students campus-wide to vote on which undergraduate's pictures are hotter. Harvard's limited computing infrastructure can't handle the load. That's how the scene goes in the movie, and it's not too far removed from the truth. Facemash got shut down in a matter of days, but Zuckerberg went on to create TheFacebook, which soon became just Facebook; and the rest is history.  Facebook wasn't the first social network, but it soon became the ultimate social network . At the most basic level, Zuckerberg simply took the actual Face Books from Harvard and translated them from paper and ink to pixels. Harvard printed directories of students, including pictures and bios, so students from far-flung locations and backgrounds could identify each other and, more importantly, identify with each other.  They printed the books to help lonely, socially awkward students make friends faster. Facebook began as a program to share pictures and help people make friends. Once interactivity got added to the mix, the world was never the same. You will notice, however, that the computers at Harvard didn't come crashing down because people were arguing over political conspiracies to help/hurt the president by exaggerating/downplaying the effect of a worldwide pandemic/nasty little flu bug. The servers didn't fail because students were sharing memes or pictures of what they had for dinner.  They certainly didn't grind to a halt because some enterprising young students had a brand spanking new 2020 Nissan Rogues, for the incredibly low price of $349 a month with easy down payments and financing for everyone regardless of their credit history. The servers crashed because the students were sharing and interacting with pictures. Facebook became a cultural phenomenon because people engaged with each other through pictures . I now spend most of my waking hours helping salespeople sell more cars and make more money using social selling tools like Facebook, and the hardest part of that job is convincing them that they don't have to try so hard. Mike Correra from DealerBuilt is an automotive social media pioneer. He was selling cars on LinkedIn and Facebook when most salespeople were still scoffing at the idea. Mike says the true key to success for salespeople on social media is to simply be more sociable. If you're using social media primarily to sell to strangers, you need to grab a dictionary and look up the word social . Facebook, and the entire concept of social media is about making friends, and engaging with friends. In short, it's about being friendly. Treating your friends' timelines like billboard space for cars you're trying to sell isn't friendly. Of course, you have to try to sell cars; no one's saying you shouldn't, but if that's the only thing you're doing on social media, you're doing it wrong. Your friends will unfriend you, they'll ignore what you post, and eventually, Facebook's algorithms will get the hint and stop showing your cheesy ads to your friends altogether. So let's do this, for the next seven days, instead of trying to get as many cars as we can on Facebook, let's try to get as many faces as we can on Facebook. That's why they called it Facebook after all. Get your smiling face on there. Get your family and friends on Facebook. Get your happy customers on Facebook.  The old rule of thumb is every time you introduce a customer to another human being in the service department, you double the odds of that customer turning into a repeat customer . Guess what. You can introduce people to your service department (and the parts department, and the title office) to your customers on Facebook every day. Find a local business person or community volunteer that's doing something interesting in the community and put their face on your Facebook profile. Help support the people who support you. Dave Clayton at Tidelands Ford on Pawleys Island, SC sells 40 to 50 cars a month by making friends for life with customers and engaging with everyone on a personal level... online and in real life. He routinely finds people and events worth celebrating in his local community and uses his social media presence to lift them up and honor them; from the local ice cream shop to local artisans. His Facebook wall is a steady stream of happy faces. See how many faces you can post on Facebook this week. Make sure you tag them so their friends can see the great things going on in their lives. And make sure that every human being you know, on Facebook and in real life, knows what you do for a living so that when they are in the market for a new or used car, they know they've got a friend in the car business. Everyone's a buyer. Everyone.
Grow Your Base Through Conquest

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Humans are born to compete. As far back as ancient times, when we competed over every available resource as a matter of life and death, the idea that survival and prosperity are born from struggle seems to be woven into our DNA. The same concept applies in the business world, and certainly in the automotive retailing industry. The fact is a finite number of potential customers exist, meaning your dealership is in constant competition to earn those buying dollars. This all might sound a bit brutal and off-putting to those without a competitive nature. But, time and time again, systems that allow for healthy and fair competition have produced the best results for both the consumer and the business with the best idea, or the business willing to work the hardest. So, you’re in a constant struggle to grow your base. That means two things: conquesting new customers and retaining existing ones. It sounds simple, perhaps, but there is a natural tension between those two concepts we shouldn’t overlook. The need to capture new business can come at the expense of your existing customers defecting to your opposition. Plus, conquesting in and of itself is quite tricky for most marketing methods to pull off. How do you become a conqueror without hemorrhaging pre-existing revenue sources? It comes down to a strategy that balances capturing new customers while retaining existing ones. Understand Your Battlefield Having a nuanced understanding of your entire potential customer base is critical. Start by surveying your current territory for areas of opportunity and weakness. I recommend targeting your marketing by zip code rather than radius. Depending on your market, your customers may not be coming from the nearest zip codes, but from miles away. Within each zip code, you’ll have three smaller targets and strategies: Retention: Area you have already won but have to work to keep. Conquest: Area controlled by a competitor that you need to win. Battleground: Area occupied by multiple competitors but dominated by no one. With a deeper analysis of your market, you can determine the best customers to target, how to win each area, and where you’re in danger of losing ground to the opposition. Let’s focus for a moment on the types of marketing best-suited to conquesting. You can use digital advertising, email and direct mail, newsletters, and social media to promote sales and service specials, dealership differentiators, OEM campaigns, and more. As you successfully convert customers to sales or service, you adjust your strategy to target other segments. Acquiring new customers also means you need to shift your communications to keep your dealership top of mind when they need a new vehicle, emergency service, or regular maintenance. Each customer is unique, and it’s incumbent on you to demonstrate through targeted messaging why they should buy from you over the competition. That means catering to what matters to each individual. Whether it’s lower prices, quicker processes in sales or service, aftersales benefits, incentives, or other factors, customers look for the dealerships offering convenience, a perceived fair price, and an overall better experience. 1 Automotive Brand Retention and Defection Report – Naked Lime Marketing
Why Brand Loyalty Must Be a Priority for Dealers in 2018

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Automotive retail is on track to have a positive 2018, with the first half of the year’s sales exceeding analyst expectations, and a recently reported strong June. Yet dealerships continue to face challenges, from increasing competition and rising expenses to a tricky consumer relationship model. What’s the solution? A reprioritization of brand loyalty and focus on increasing brand love. This means understanding the consumer’s journey, fueling a multichannel and mobile-rich experience, and seamlessly supporting repair and warranty communications between driver and OEM, all while building trust between the shopper and your dealership. In an industry with numerous point-to-point relationships, from OEM to dealer, dealer to consumer, consumer back to OEM customer service, and so on, brand loyalty may seem inaccessible. But smart dealers know that brand love is an essential distinction in today’s market. Dealers have to go beyond sales and leasing. Understanding and respecting the shopper’s journey A recent Oath report found the buyer experience means 52% more to brand love in the auto industry than anywhere else. Also, 85% of shoppers are more likely to buy from a dealership that offers at least one major purchase step online. This means when consumers are looking for a new or used car, it’s all about the omnichannel journey. It’s also why the best auto and dealer brands build individual cross-channel relationships; connecting the dots between the online and offline shopping experience. Dealerships can’t only rely on in-store visits to drive sales. In an era of instant gratification online, dealerships must enhance the traditional two-hour dealer experience. From complimentary courtesy shuttles for service customers to stocking waiting rooms with beverages and snacks, simple upgrades can help make the dealer the ultimate extension of the national OEM, and cement that consumer loyalty. Although most shoppers have an idea of the car they want ahead of time, they can certainly be influenced about what to buy and who to buy from. The time to influence and convert them is on mobile, where they spend the majority of their shopping time making decisions. There are always opportune moments to connect, also known as purchase triggers — like when the shopper is preparing to send a child to college, retiring, or becoming a first-time home buyer. But a smart mobile, omnichannel strategy also helps influence purchases outside of the purchase trigger and anticipated life-events cycle. Creating rich, tailored mobile experiences Mobile in particular is an important channel for dealers. Few people buy cars online, but mobile is the leading venue for research and decision-making. On average, shoppers switch between on- and offline channels four times on their path to purchase. Therefore, dealers need to create mobile experiences that exceed expectations by being responsive, easy to navigate, personalized, and fast. Dealer marketers must ditch the usual banner ad boxes, and use new formats like augmented reality (AR), virtual reality (VR), and 360-degree and live videos. For example, with an AR ad format, shoppers can visualize various makes and models to help influence their decision before coming to the dealership. Lexus has done a great job of connecting on mobile , specifically with mobile sports fans. For the past three years, Lexus has partnered with Yahoo Sports’ Tourney Pick’em for its “0-60 Bracket Challenge.” This past March’s custom-branded game tied to 2018 March Madness, promoting the 2018 Lexus RC F. According to a recent Oath study, approximately 60% of consumers had at least one mobile interaction with their favorite brand within the last year. Creating immersive mobile moments make those interactions really count, and go a long way toward building brand love. Increasing authenticity and consumer trust Buying a car is an emotional decision, so just as dealership employees convey trust, so should the placement of ads and content online. According to Oath, after seeing ads next to questionable content, 74% of respondents felt much less favorable toward the brand. Dealers must also connect with shoppers authentically. Millennials worship innovation, and it’s no surprise their loyalty is most influenced by setting trends. We also know music transforms time spent driving into an experience and memory for them. To capitalize on this, since 2016 Toyota has partnered to livestream the summer’s hottest musical festivals like Stagecoach and Firefly in an effort to reach a younger audience authentically, connecting the dots between great music and memorable driving experiences. In 2017, Toyota achieved 83 million-plus views across the live concerts, and a 23% lift in consideration to buy a Toyota vehicle (among viewers ages 18–24 in market for a car), proving that a premium, authentic experience works. Today’s shopper has more options that ever. In fact, during their last car purchase, Oath found that 65% of shoppers switched to a different car brand. The impetus? It’s as simple as consumers wanting to try something new. The solution? Dealership loyalty. Loyalty and dealer affinity will be the key drivers of growth in years to come as dealers face a changing retail model, car sharing, and other market challenges. Building brand love isn’t exclusive to manufacturers. Automotive marketers have more opportunity than ever to create powerful brand experiences for consumers. With new technologies like AR, creativity is being redefined, and it’s no longer just about getting consumers through the purchase funnel — it’s about creating highly shareable content, building an emotional connection, and creating lifelong loyalty. Rick Fellen is a digital marketing executive with over two decades of experience in the industry. As VP and industry lead of automotive at Oath , Rick is responsible for leading a national field sales advertising team focused on the top auto brands in the U.S., such as GM, Toyota, Ford, and Volkswagen AG.
How Bundling Retention Incentives Benefits Dealers and Consumers

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Does customer retention have a place in a market shaped by ridesharing, subscriber services, pod cars, autonomous vehicles, Carvana and DriveTime, and ride-hail services such as Uber and Lyft? And as the retail auto landscape continues to morph into sales and distribution models that would have been science fiction just a few years ago, is the pursuit of customer retention more or less important? The goal is to achieve a winning outcome for all parties. We’re currently witnessing several dramatic transitions of what was a very stable, predictable automotive retail model, which means many ideas and methods are becoming obsolete, or facing urgent pressure to change. So if the dealer’s connection to buyers is diffused or in any way less direct, how do they retain a share of customers’ future transportation dollar? By bundling retention incentives, dealers can put more valuable services in customers’ hands, often at no additional cost to either party. This strategy helps dealers sell more cars, and customers who buy them experience greater ownership value and convenience. If you’re a franchise dealer looking for an edge, something different — something uniquely convenient for your customers — then consider how bundled retention services might benefit you. And if you’re an independent dealer, you’ll benefit from bundling as well. Companies bundle related products and services to make the overall package more valuable to the consumer than the individual parts. Bundling has been popular in F&I for some time as a means of presenting and selling aftermarket products. Management practice publication Ivy Business Journal calls bundling “the new super solution that gives companies an edge,” saying companies that practice bundling differentiate themselves from competitors — or even eliminate their competitors altogether. Bundling examples Aftermarket protection company Vero recently partnered with financial services provider Allied Solutions to bundle vehicle protection and appearance products with a vehicle service contract structured to appeal to independent dealers and their customers. Vero chief executive officer Joe Annoreno notes that today’s market pressure on used car operators is considerable. Competition for quality inventory at the right price ranges is brisk, but dealers utilizing bundled products set themselves apart and help keep customers connected to them. For instance, bundled appearance packages with prepaid maintenance plans require that the care and upkeep of the covered appearance aspects of the vehicle be done at the selling dealership. The advent of PPM plans Car buyers value free or prepaid maintenance programs. OEMs began offering them more than a decade ago. Their purpose was to encourage repeat service visits and brand loyalty. Consumers could redeem plan services at any of the OEM’s franchises. T his was healthy for OEM relations and revenue, but not necessarily for the dealerships. Third-party innovators picked up on this opportunity, offering prepaid maintenance programs with a twist. Their dealer-branded prepaid maintenance plans could be used only at the issuing dealership. Dealers sold or preloaded these PPM plans, which typically included oil and filter changes, wiper services, and tire rotation — common consumable maintenance items. These plans stimulated more frequent service visits, which built the habit of servicing at the selling dealership. Bundling pushes convenience Increasingly, bundled benefits are being used as marketing tools, which leaves buyers impressed. For instance, vehicle subscription companies that source customer inventory from dealers bundle prepaid maintenance packages into their solutions. The programs link the maintenance of these vehicles back to the providing dealership, from which the dealership gains service revenue. Subscribers appreciate the convenience and budget benefits, resulting in goodwill and retention that links back to the subscription service. For example, one PPM teams up with GetWrench.com mobile vehicle maintenance services to give dealers an extra competitive advantage in their markets. The added prepaid maintenance benefit is a no-charge upgrade for dealers and their customers. Dealers can either preload or sell these plans. Customers appreciate the plan’s savings and convenience, so they remember the dealership’s special touch. Customers schedule with GetWrench.com using its app, website, or phone, and expert mobile technicians arrive at their home or place of business fully equipped to deliver excellent results, further strengthening positive impressions about their dealer. Bundling fluid services Fixed ops packages that provide fluid services are another example of bundling designed to drive retention and revenue for dealers. There’s a great deal of opportunity from this type of plan for dealers and customers. The AAA notes the following facts to support this: 56% of Americans skip or delay recommended vehicle maintenance or repair. 80% of brake and transmission fluid maintenance needs are missed by motorists. More than $80 billion in unrealized revenue drove out of automotive service departments last year because dealers did not check customer vehicles’ brake, power steering, and differential fluids. Age, heat, humidity, moisture, and other conditions cause these fluids to lose their vital performance additives. Fluid services, when bundled with prepaid maintenance plans, encourage customers to get the work done regularly, which helps dealers capture that additional business. Dealers report that 70% of customers using PPM plans want to add this fluid service when it’s available. Customer upsell when this additional benefit is presented is, on average, more than $130 per repair order, compared to about $70 per RO with a PPM that doesn’t include this extra. These examples show how bundling retention incentives is a win for both customers, who enjoy greater convenience and peace of mind with their vehicle, and dealers, who experience significant boosts in sales and customer loyalty. Ryan Williams is president of Fidelis PPM , and is a 20-plus year veteran of the auto industry, having served in multiple dealerships as sales manager, F&I manager, and GM. You can reach him at ryan@getfidelis.com .