Retention & LoyaltyCommentary & Insights

Retention & Loyalty
Changing the Narrative to Sustainable Profit

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Sustainable profit - Profit which everyone benefits from, growth driven by things you become. Unsustainable profit - Where one group benefits at the expense of another, growth driven by things you do. I can vividly remember discussing a car deal with a sales manager and him telling me, “Get all the profit you can, it’s not like they are going to be back to buy another one.” To me, coming from a Ford store in Michigan where most buyers were A-plan and exceptional customer experience is what made loyal customers, this statement hit hard, I could not believe my ears. Years later, after starting my own agency, I considered also starting Unsustainable Business Models Anonymous, I jest. You see, it is not the business model, because no dealership sets out to provide a poor experience for their customers, they just do not have a plan in place not to. The biggest difference in sustainable and unsustainable profit is how we get there. Sustainable profit is growth driven by what we become; unsustainable profit is driven by things we do. One key factor is the view of profit and loss. A sustainable view begins with an action that takes care of everyone from within and grows by influencing others to join. Unsustainable profit represents a pessimistic and single-minded view of life, where the primary goal is survival. Objectification places people in an out-group vs in-group dynamic, where competition exists, hence scarcity. Sustainable businesses have a solid foundation to prove it, they invest in assets that work for them in present and future conditions, allowing them to achieve new objectives. Today’s customers are looking for more than just a functional vehicle. Vehicles and the ownership experience must satisfy other critical needs as well; both physical and emotional. From the moment a customer enters your dealership, you have an opportunity to make an investment in their lives and in return get more than just profit. Sustainable profit is more than just numbers on a sheet. Sustainability is being honest and open with your customers so they can see you as human beings, not just as participants in a transaction. As such, sustainable profit is best realized in the long term by building trust and relationships along the entire lifecycle of a customer. This process begins at that first meeting when that customer enters your dealership and continues until long after the sale. So, where do you start to build a model of sustainable profit? Where can dealerships make investments everyone, including customers, can benefit from? Where results are realized in both the short term and long term. On the sales side, leading with pricing based sale or themed sale is an example of something you do vs something you become. These types of events, while profitable, when not conducted properly are band-aid solutions. For sales, focusing on finding ways to serve your customers in a way which positively impacts their lives, an example, working with a diverse credit group. Investing time and effort in customers with less than perfect credit will grow loyal relationships. You would be amazed at how deeply reliable transportation can impact a person’s life. Benefits of working with a diverse credit group include deepened relationships with your customers, wider market reach, and increased customer satisfaction as reach to meet customer needs. This is an opportunity to increase your sales and serve a greater customer base.  An even greater opportunity lies in Fixed Ops, sorry Sales I still love you! If you want to focus on the long-term sales, Service Advisors are the individuals with the most customer contact, largest impact on CSI, greatest opportunity for gross, and a major factor in whether a customer will return to make a vehicle purchase. Service Advisors are the first, and sometimes only, dealership’s representatives customers have contact with during their time at your location. They are the first impression of a dealership and can create trust through information gathering and interactions that lead to a successful purchase, or distrust that leads to an unsatisfied customer. We have all heard the adage, "Sell the sizzle, not the sausage." I am here to tell you that in most dealerships we have drifted from that process. Customers want value and they want options, so we must pay attention to both needs while interacting with our service customers.  What is a stellar Service Advisor without a solid Technician? Wait, those are in ridiculously high demand you say? Ahhh, yes, so you have an opportunity for an advantage if you are bold. This is going to come down to pay, culture, and resources, not necessarily in that order. When you find a technician with experience, strong training and customer service skills, honesty, and a love for what they do - you have a unicorn. These unicorn technicians are those that go beyond the call of duty, they can be a rock for a team. Not only do they keep your core services running, but a great one is also a living, breathing documentation library on your systems - documenting loose ends and potential pit falls. Find the best techs, unicorns if you can, and do what you can to get and keep them - you will never regret this move. In short, growth driven by serving customers, rather than the customer as your competition. Bring your customers along on your journey, help them grow with you.
The Not-So-Hidden Gold Mine That Could Increase Dealership Revenue Instantly

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A customer for life goes a long way in automotive. It’s not just the vehicle purchase, it’s everything that comes with it: maintenance, service, add-ons, renewals, and, of course, referrals.   But it’s hard to scale personalized campaigns to past customers and to leads that ghosted. The messaging is different, the approach is sensitive, and the timing has to be perfect. There are also several factors that come into play like the last website visit, VDP views, and lease/finance renewal.  While no human can physically scale this kind of personalization, this is just another application of machine learning that could turn your CRM into a money-making machine. Think about it: if your CRM has 10,000 non-active leads, and you can reawaken even as little as 10%, you're looking at 1,000 new customers for life. It’s really pure gold waiting to be discovered.  It’s all about the audiences  The first step in making sure you’re investing in the right technology to turn more of your CRM into revenue opportunities is the audience game. You want to make sure your dealership isn’t bucketing opportunities into irrelevant audiences, like lease renewal for someone who has more than a year remaining, or service for someone who just came in. The demanded-- and expected-- hyper-personalization starts with the right segmentation, so you need to be optimizing audiences like people who recently visited VDPs, cash renewals, and cold “non-buyers” (leads that converted over 8 months ago and did not buy a car from you).  Make it dynamic  Once you have the right machines in place to identify and segment appropriate audiences, you need to make sure your email templates and SMS marketing have dynamic templates and merge tags. No one wants to receive an email without their first name or pre-filled forms. If you’re sending the email, you should know who they are!  But it goes even further than this- as you send traffic from an email blast to a specific landing page, your dealership can have dynamic videos and forms already embedded on the landing page to maintain that 1:1 conversation with your prospect. Once someone clicks on a hyperlink from your email, you will know how to identify them and greet them when they land on your website, keeping the transition and user experience extremely smooth. You can also personalize things like vehicles of interest or relevant services with dynamic templates.  Don’t forget connectivity  Even if your dealership invests in the best technology for mining your CRM, real-time machine learning can’t possibly function at its best without connected data. Make sure your dealership’s website data and ad activity is connected and communicating with the CRM so you have a full picture of the prospect’s digital footprint. While CRM information is critical, it has to be coupled with shopper activity in order to make the most of every opportunity and turn more (dead) leads into sales. When data is connected it also provides you with the most updated version of your customer’s story, bringing you one step closer to conversion.   There are a lot of pieces to pull together when thinking about personalized lead nurture at a scale that can convert more of your database into business. And while no human can possibly do this, your dealership should consider AI-powered technologies that can learn your audiences, segment, and target shoppers with just the right message on and off the site. Your data and your customer base could be the gold mine you’ve been looking for, so don’t miss out. 
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