Many dealers face the challenge of effectively reaching the right customers with the right message. Furthermore, a greater challenge is bringing those customers into their showrooms and service bays again and again. Consumer shopping habits have shifted in recent years, away from traditional mass media platforms like TV, print and radio, toward more targeted and digital mediums that include direct email and mail, internet, and mobile. In fact, traditional advertising spend in mediums like radio, TV and newspaper have declined by 16, 15 and 30 percent, respectively, in the last year. Conversely, spend on targeted marketing, which has the ability to reach “in-market” consumers, has conversely increased by 23 percent. Dealerships that do not understand targeted and digital marketing continue to see diminishing returns with traditional mass marketing that continues to be costly and nearly impossible to measure.
Today, the most 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 their success is implementing a targeted marketing strategy to maximize their results.
Russel Toyota, a member of Russel Automotive Group, did just that. Using a targeted marketing strategy has enabled them to attract, sell, service and retain more customers for a lower cost than traditional mass marketing.
“We’re up 14 percent in sales, compared to this time last year, within our top-selling zip codes in part because we took steps to more clearly define our audience within our primary market,” says Lori Connolly, Marketing Director of the Russel Automotive Group.
Russel Toyota 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 Russel Toyota 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 Russel Toyota, and off-brand owners with a historical pattern of crossing over to Toyota.
Once Russel Toyota had more clearly defined their market, they implemented a comprehensive targeted marketing strategy using variable direct mail campaigns that consistently speak to customers throughout the 60-month life cycle of their vehicle with custom messaging that includes: maintenance reminders for newer vehicles not yet in-equity but that may be due for recommended maintenance and ongoing targeted sales communications to customers in an equity position. Using high-end creative campaigns, Russel Toyota promotes its best 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 $26.95 Synthetic Blend Oil Change” coupon, but customers who are categorized as lost, or who do not regularly service with Russel Toyota, receive the same offer but for $19.95 to encourage them to come back.
Russel Toyota provides customers with minor and major service reminders and contacts them when the customer is in an equity position and can sell their vehicle or upgrade into a new car for the same payment with compelling offers delivered through direct mail.
“The whole point of the program is to keep customers loyal and frequent,” says Connolly, “This strategy has helped to consistently increase the amount of ROs that we complete year over year.”
Russel Toyota also targets conquest service customers within their primary marketing area who own Toyota’s 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 limits the dealer from contacting numerous conquest opportunities within their market. Therefore if a dealer only has 30 percent market share, essentially they’re missing out on an additional 70 percent of the area’s service market. Russel Toyota recognized the opportunity to broaden its service marketing program with conquest and has greatly expanded their reach of potential service customers.
“The best customer any dealer can find is one they already have,” said Budd Blackburn, owner of TeamVelocityMarketing.com the company that Russel Toyota uses for their sales and service marketing.
“Customers who have an active service relationship with a dealership are seven times more likely to purchase with that dealership. Targeting active service customers is smart, but you have to have solid processes and a dedicated team in place to be successful.”
An added benefit to this integrated sales and service marketing strategy is a healthier trade pattern. Since implementing their integrated strategy, Russel Toyota brings in more late model trades, 2012-2008, which is ultimately a big savings for the dealership and practically eliminates having to overpay at auction against the competition.
“We are finally taking full advantage of the opportunities in our service lanes. We’ve almost doubled our amount of late model trades compared to this time last year. For October alone, we’re up 22 percent.” said Connolly. “We’re now focusing on active service customers who are literally right in front of us – no more missed opportunities.”
To measure the effectiveness of all their marketing strategies and ensure quality customer care, Russel Toyota uses a call-monitoring system to track their advertising, employees, and how their customers are treated by listening to every call that comes into their dealership. They receive daily, weekly and monthly reports that enable them to see which ad campaigns generate the best response and pre-empt any potential customer concerns before they escalate, improving their overall CSI and creating lifelong satisfied customers – something that Russel is proud of.