Let’s start this article with a little phrase that can make a big difference to your business when applied: Part Time Effort = Part Time Results, Full Time Effort = Full Time Results
We are going to discuss changing the industry paradigm on how to equity mine your dealership’s customer database and your service lane. Over the past eight years or so, there has been a lot of equity mining technology hit the auto industry. I have seen many dealerships latch on to one of these tools then start bombing their database with email, direct mail, and distributing leads to the sales staff willy-nilly. Often there’s a short-term rise in sales from this effort, then usually the results fall off, the activity falls off, the database is overworked, loyal service customers are driven away from doing business at the dealership, and the dealership ends up paying a high price for a short-term spike. In other words, a good idea is implemented wrong, the wrong process is used, the wrong approach is used, the wrong message is used…
There is, however, a huge opportunity to create incremental sales, shorten the customer trading cycle, and to establish a significant profit center for a dealership when equity mining the database and equity mining the service lane is married to the right process and right tools. I recommend dealerships shift away from traditional thinking when it comes to equity mining and commit to doing it different, doing it better, having full-time focus, creating a department that drives the process, and establishing a real profit center for the dealership. I encourage dealerships to establish a full-time department/team and have that team focus on and execute the seven primary contact points for equity mining the dealership database and equity mining for service lane sales. Successful dealerships executing my recommended process will convert from 2% to 4% of their total customer pay and warranty Repair Orders into new vehicle sales, and they will convert 3%-5% of the eligible database equity mining contacts into sales monthly. For a dealership doing 2000 RO’s per month, that’s 40 sales from the service lane, and another 30 to 40 from database equity mining- 70 to 80 sales per month. Plus, the gross profit is higher and the process provides a great source for high quality pre-owned vehicles.
In battle, the ancient Greeks established a well-deserved reputation for bravery, discipline, and determination. They were successful because they were well trained, well led, and most of all, well-motivated. The Greeks understood how to instill commitment and prepare their soldiers for victory.
To infuse their army with commitment the moment they landed on the enemy’s shore, the Greek commanders would give the order to burn the boats. Imagine the tremendous psychological impact on the soldiers as they watched their boats being set to the torch. There was no turning back. Once their boats were burned, they realized the only way they were going home was through victory. The ancient Greeks understood the power of commitment.
In your dealership, you are not asked to commit to battle, but make no mistake-commitment is required. The moment you become committed to establishing a new profit center for your dealership through database equity mining and service lane sales, great things will happen. I challenge you to stop the insanity of trying to get your sales team to focus part-time on these vitally important opportunities. It’s time to burn your boat and commit to doing things right. Designate a full-time staff that will make their living from handling equity opportunities in the Service Lane and from equity mining the database. Give them the right process, establish protection policy for the existing sales staff, establish protection policy for the Service Advisors, and give them proper training and tools. These people shouldn’t take “up’s”, they shouldn’t work Internet leads; their sole focus should be the equity mining profit center (refer back to the saying we started this article with). Just taking the first step of designating full time dedicated specialists for your equity mining efforts will make a big difference.
I have so many examples of how it has made a difference for many dealerships, but to be brief I’ll share only a recent one. About a year ago I met with a dealership that was using the standard industry process of distributing leads out to the sales staff and begging salespeople to work the service drive and database. They were selling about 15 cars per month from the effort, which they thought was good. I do an Opportunity Analysis for any dealership that wants it, and after doing the Opportunity Analysis for this store, we identified that the dealership had an opportunity to generate 56 sales monthly from service lane equity mining, and 52 sales per month from database equity mining, for a total opportunity of 108 sales monthly. Of course, the dealer thought that was high (it was not), so we cut it in half to 54. We installed an Equity Mining Process and Department in the dealership. In their first full month using the process, they sold 63 vehicles and continued and upward trend monthly. In their sixth month they sold 74, and last month they sold 97. This dealership will soon be selling over 100 per month using the process and hitting all 7 Primary Contact Points for equity mining their database and selling in their service lane.
If you combine dedicated specialists with a great process and good tools, you will be on the road to radical long-term positive change for your business.
Here’s 10 tips to help you get started:
- Have an Equity Mining Opportunity Analysis done for your dealership.
- Appoint or hire dedicated full-time Equity Sales Specialist(s) to work the service lane opportunities and handle the database equity mining appointments.
- Have a Call Center, BDC, or Equity Telephone Specialist make equity mining calls to eligible customers in your database.
- Establish a RO Protection Policy for Service
- Establish a Protection Policy for Existing Salespeople
- Brand the Program and display Point of Sale Merchandising materials
- Establish a Program on your dealership’s website
- Have a Program Banner in your Home Page banner rotation.
- Have a Program Message on your On-Hold Message Loop
- Develop a Program Video for your social websites and dealership website.
If you have questions regarding how to set up the department, what process to implement, the seven primary contact points, etc… or if you would like to have a free Opportunity Analysis done for your dealership, please feel free to send an email.
Get started now-burn your boat, and never look back.
Join me for my session The Loyalty Management Profit Center at the 22nd Digital Dealer Conference & Expo this April 11-13th in Tampa, where I’ll share how you can drive significant sales through your service lane sales process and database mining process, and create a whole new profit center for your dealership.
Author: Darren VanCleave
Darren VanCleave heads Strategic Initiatives for The Academy. Darren formerly headed the Auto Quote Division of AutoLoop. Prior to AutoLoop, he served as COO of the Tier 10 Marketing, President of RTG, Executive Vice President of the Joe Verde Group, and Executive Vice President Sales and Marketing for HAC Group/Ford Motor Company. He possesses over 25 years of success in the automobile industry. Darren began selling cars at the age of 17 while working his way through college. He quickly became ranked as one of the top five salespeople nationally for three different brands. By the age of 25 he became a GM/Partner in a Chrysler Dealership and helped the dealership move from last to first in the Southwestern United States. After selling the dealership, he joined the Ford Red Carpet team and helped dealerships like Galpin Ford become #1 with their customer loyalty/retention process.