Dealers share many ongoing challenges like how to effectively reach the right customers with the right message, bring those customers into their showrooms and service bays, and keep them coming back again and again. As consumer shopping habits have shifted in recent years, so too must a dealer’s best practices of how to effectively attract them. Many advertisers today are shifting away from traditional mass media platforms like TV, print and radio, toward more targeted and digital mediums that include targeted direct email and mail and the internet. Dealerships that do not recognize the value and advantage of targeted and digital marketing mediums continue to see diminishing returns with traditional mass marketing that continues to be costly and nearly impossible to measure.
Successful dealers are using targeted and digital mediums that are less expensive, more measurable and give a better return on investment than traditional mass marketing. The key to using these multiple mediums is to integrate these platforms with one clear message to maximize results. However, this also presents a challenge as the average dealer works with multiple vendors to execute an entire marketing strategy which can result in different strategies, messages and designs rather than one cohesive campaign message – often confusing customers, and even employees.
Honda City Chicago in Chicago, Illinois, a member of the Bob Loquercio Automotive Group, has found great success by using an integrated targeted and digital marketing strategy across multiple mediums by using one marketing partner to attract, sell, service and retain more customers for less cost than traditional mass marketing.
“Our total new and used sales are up 127 percent compared to the same 12 months last year,” said Tony Loquercio, VP of Operations. “And our new Honda sales are up even higher at 133 percent for the same period.”
Honda City Chicago’s results are impressive. To achieve their success Honda City made a commitment to a strategy that began with a comprehensive five-year historical analysis of their sales and service transactions to determine customer trends. Those findings were then compared to leading third-party and industry data to establish consumer patterns within the local market. The results enabled Honda City Chicago to identify vehicle owners with the greatest probability of buying or servicing with their dealership, as well as identify same-brand owners who had never visited Honda City Chicago, and off-brand owners with a historical pattern of crossing over to Honda.
“OUR MARKET SHARE IS UP 45 PERCENT OVER THE LAST 2 YEARS SINCE STARTING THIS STRATEGY WHICH IS SIMPLY AMAZING IN AN ESTABLISHED MARKET LIKE CHICAGO.” – Bob Loquercio, CEO/ President
Honda City then implemented a comprehensive targeted and digital marketing strategy using variable direct email and mail campaigns that consistently speak to customers throughout the 60-month life cycle of their vehicle with custom messaging that includes: a thank you and welcome message for recent purchasers, maintenance reminders for newer vehicles not yet in-equity but that may be due for recommended maintenance, and ongoing targeted email and mail sales communications to customers in an equity position. Using high-end creative campaigns, Honda City Chicago promotes its best sales offers with custom service offers that reflect the service status of the customer’s vehicle. For example, active service customers who routinely come in for service receive a $24.95 Oil & Filter Change coupon, while customers who are categorized as lost, or who do not regularly service with Honda City Chicago, receive the same offer but for $14.95 to encourage them to come back.
Honda City Chicago targets conquest service customers within their primary marketing area who own Hondas but did not buy from them. This is unique because most dealers use the manufacturer’s service marketing program which often limits a dealer to only communicate with customers that have purchased directly from their store, but also limits the dealer from contacting numerous conquest opportunities within their market. If a dealer only has 30 percent market share, they are essentially missing out on an additional 70 percent of the area’s service market. Honda City Chicago recognized the opportunity to broaden its service marketing program with conquest and has greatly expanded their reach of potential service customers.
“Service has seen a significant jump since we started this program. ROs have increased 80 percent and our service revenue is up 145 percent,” said Loquercio.
Another component to Honda City Chicago’s strategy is that every outbound targeted email and mail campaign directs customers to an online Campaign Conversion Site, www.HondaChicagoOffers.com that not only displays the featured promotions of the email or mail campaign they have just received, but also shows them every sales and service offer that Honda City Chicago is currently running. If a customer is not in the market for the specific offers they just received they can check Honda City’s campaign conversion site for other available offers.
When customers visit the dealership they see POS merchandising throughout the store that validates the advertising message they recently saw online or received in the mail, further building credibility and helping increase the closing ratio.
An added benefit to this integrated sales and service marketing strategy is a healthier trade pattern. Since switching strategies they’ve brought in more late model trades, 2008- 2010 which helps cut costs by the dealer not having to overpay at auction.
“The real value with their strategy is that it generates revenue for three of their major profit centers. It increases new car volume and service revenue because of the reconditioning required to turn a trade-in into a resale, and it has a big impact on their used car business because it allows them to take in hard-to-find used cars for less than what the competition pays at auction,” said Budd Blackburn, owner of Team Velocity Marketing, the company that Honda City Chicago uses for their sales and service marketing.
“Our market share is up 45 percent over the last 2 years since starting this strategy which is simply amazing in an established market like Chicago,” said Bob Loquercio, CEO/President.
New Car Sales up 133% and Service Revenue up 145%
WHAT THEY DO
1. Conduct comprehensive market research to clearly define their local market.
2. Identify the perfect customers and prospects with the highest statistical probability of buying and/or servicing with their dealership.
3. Speak consistently to their customers throughout the 60-month lifecycle of their vehicle.
4. Drive consumer traffic to their custom campaign site that promotes all their sales and service offers.
RESOURCES THEY USE
1. DMS: ADP Dealer Services www.adpdealerservices.com
2. CRM: iMagic www.icarmagic.com
3. Targeted Marketing Company: Team Velocity Marketing www.teamvelocitymarketing.com
1. Define your ideal local market by finding the perfect customers and prospects with the highest statistical probability of buying and/or servicing with your dealership now and in the future.
2. Create dynamic, cohesive campaigns that consistently speak to your customers throughout the 60-month lifecycle of their vehicle.
3. Consistently target in-market same-brand prospects, and consumers who drive off-brands with a historical trend of crossing over to the brands you sell.
4. Drive consumer traffic to a custom campaign conversion site that promotes all your sales and service offers to help increase your internet sales and service leads.
“Service has seen a significant jump since we started this program. ROs have increased 80 percent and our service revenue is up 145 percent” – Tony Loquercio, VP of Operations at Honda City Chicago