Dick Hannah Honda has been Vancouver, Washington’s No. 2 Honda store for years. Recently, General Manager Joe Orr and his team executed a new targeted marketing strategy that lead them to become the No. 1 Honda dealership in their district. As a result of this strategy, used car sales are up 21 percent YOY, and in just five months, new car sales are up 15 percent, and service revenue is up more than $131,000.
Orr refined the dealership’s processes to create a better customer experience and shifted the marketing strategy away from expensive mass marketing and into targeted marketing channels that allow him to exclusively target in-market shoppers.
“Good data leads to a good ROI,” Orr said. “To help us get the most from our marketing, we use a centralized analytics tool that analyzes every ZIP code in our market to identify which ZIP codes have the highest historical conversion rates and lowest cost per sale. From there, we identify the ‘Perfect Prospects’ who live in those areas. These are customers with the highest statistical probability of buying and servicing with our dealership, both now and in the future. Once we have this data, we use digital marketing and geo-targeting technology to deliver very specific offers.”
The targeted marketing channels being used in Dick Hannah’s all-encompassing strategy include ODA, SEO, mobile, social, reputation, niche, publicity in-store merchandising, publicity and retention. “We’ve reorganized all of our marketing and our processes. This led to improved sales numbers and has allowed us to eliminate waste,” said Orr.
Leveraging Tier 2 Ad Dollars Honda was one of the top five automotive brands searched on Google in November of 2014. To capitalize on this opportunity, Dick Hannah Honda’s marketing company executed a strategy that worked with the marketing dollars being spent by his ad association. The marketing company executed digital marketing campaigns designed to grow retention and market share, while Dick Hannah’s ad association executed conquest campaigns to generate opportunities with Honda’s major competitors, such as Toyota and Nissan, from the Tier 2 angle.
“This integrated strategy has allowed us to increase sales while spending far less on traditional media at the dealership level,” said Orr. “We have 85 percent of our marketing budget now allocated to targeted marketing with most of that going to digital, with the remaining 15 percent allocated to traditional.”
The digital dominance appears to be producing great results across the entire association, as 14 of 18 Honda stores achieved more than 100 percent of their Honda objective. Dick Hannah was at the top of the group — achieving 122 percent of their Honda objective in January 2015.
Removing Retention Pitfalls “This year, one of our big initiatives is to take a proactive approach to selling by upgrading more of our customers before they begin to shop,” Orr said. To increase customer retention and generate more same-brand trades, Dick Hannah uses the Vehicle Exchange Program. This program notifies every Honda owner that they are eligible to upgrade to a better Honda for a better payment. Customers are notified via email, mail, phone and when they come in for service. The dealership receives an email every morning that shows eligible consumers who are scheduled to have their vehicles serviced that day.
“This program is designed to be as simple as upgrading a phone,” said David Boice, owner of Team Velocity Marketing, the marketing company that created the program and provides the Perfect Prospect technology for Dick Hannah Honda.
First-generation equity mining tools rely on the dealership’s efforts to generate results. At Dick Hannah, loyalty marketing is automated because there are certain tasks dealerships often don’t do or don’t do well. This automation begins by evaluating every customer who has ever done business with the sales and service departments. Then customized campaigns are created for each customer based on their credit score, their equity position and the finance programs being offered by the dealership’s lenders. Every customer who qualifies based on the dealership’s parameters receives an email and a direct mail piece that directs them to a personalized Website. These Websites allow customers to learn more about the offers they just received and explore the dealership’s inventory in a unique way. Each Website is pre-loaded with all of the customer’s current vehicle information. This allows them to compare the features of their current vehicle against the features of newer vehicles and see real loan and lease options on every new and used vehicle the dealer has in inventory with their equity position already factored in.
“Integrating this type of loyalty marketing into our strategy means working smarter and not harder,” said Orr. In addition to capturing customers before they begin to shop, Orr and his team designed a program that geo-targets customers who are actively shopping on their Website, and serves them a message based on their physical location. “Since we sell to customers in two states, we’ve adapted our Website to communicate specific messages based on where our customers are,” said Orr.
Fixing The Phones
Dick Hannah’s corporate motto is “Believe in Nice.” To deliver on this philosophy and to effectively improve the customer experience, Dick Hannah identified where opportunities were being missed or mishandled. Because phone calls outnumber Internet leads by 6 to 1, this volume across both sales and service can have a meaningful effect on the store’s profitability. According to the “Customer’s Voice” study by Call Revu, which analyzes data from more than 2 million sales and service calls every quarter, 54 percent of inbound sales calls never reach a live person.
“We spend a lot of money on marketing to make the phones ring, so we cannot afford to lose opportunities that have already been gained,” said Orr. To avoid missed opportunities, Dick Hannah uses safeguards to help increase the ROI of their marketing dollars by assuring that up to 100 percent of sales opportunities are answered, accurately tracked and properly logged into their dealership’s CRM systems.
Dick Hannah uses a service that monitors 100 percent of sales and service calls from start to finish and feeds data into a real-time dashboard. This gives them an accurate snapshot of how the dealership’s employees are performing, as well as how the customer is interacting with the dealership. If the call isn’t handled properly, the management team receives real-time alerts that allow them to reconnect with customers before the deal is lost. These alerts are delivered via text message, which have almost a 100 percent open rate, and they include a detailed summary of what happened so that managers can delegate or take action without having to listen to a recording.
Combining “Perfect Prospect” data with targeted digital marketing and real-time call management is allowing Dick Hannah Honda to generate an impressive ROI on their marketing dollars. Their cost per sale using this strategy is as low as $118, with an overall average of just $164, which is approximately 4 times less than the NADA average.
“This is just the beginning. We know that what we’re doing today will be different than what we’re doing two years from now so we must always be receptive to new technology and everything that the targeted marketing landscape has to offer,” said Orr.