Targeted Marketing results in 39% Increase in New Car Sales and retains more customers for less cost

Did you know that 90% of consumers who can skip TV ad, will? Today’s consumers have shifted their attention away from traditional mass media, making it imperative for dealers to utilize targeted marketing services that capture consumers where they are. This shift to targeted marketing gave Melanie Spare-Oswalt of Sayville Ford an incomparable advantage that fast-tracked her Dealership into a leading position.

Melanie Spare-Oswalt joined Sayville Ford, the main street dealership that her Grandfather, Neil J. Spare started in 1957. Later, the dealership moved to and expanded into Long Island’s Ford Giant. Melanie’s adoption into dealership world happened in 2008, right as the automotive industry crisis began. The automotive industry crisis of 2008 was part of a global financial downturn. Within that downturn, the price of fuel increased amongst other industry- related setbacks.

The setbacks put Spare-Oswalt in a fight to grow her business. In addition to the industry downturn, Sayville was due for a store upgrade. The upgrade would be part of a manufacturer initiative to make all stores standard in design and showroom appearance. “When the automotive crisis occurred, It was bad. We had to cut people and cut expenses,” said Spare- Oswalt. “We cut out newspaper, and limited our radio advertisements as well.”

Notably, the situation that Melanie found herself in does not differ from that of many other dealerships even when the market is not on a downward spiral. Not to mention, manufacturers are applying pressure to assure brand standardization. In an effort to cut budget, expensive and traditional mass media is usually the first to go. The excuse for that is easy–no dollar amount is worth diminishing returns. What dealerships fail to recognize is the value of targeted marketing. Unlike other forms of marketing, this strategy captures in-market customers, and limits wasting dollars on those who are not in-market.

To that point, 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 has increased by 23 percent.

Amidst the hassle, Melanie found that it was possible to both cut her budget and grow her business. To this day, her strategy remains the same, even after the trim-down of Sayville Ford.

Sayville’s Swinging Pendulum

Technology has changed the way consumers research, shop, buy and service their vehicles. The majority of automotive advertising is spent on traditional mass marketing, yet only 1% of consumers exposed to TV radio and print will buy a car this month. Attracting the 1% of “in-market” consumers begins by research. Sayville Ford started by pulling a five-year historical analysis of Sayville’s sales and service transactions. These customers are active with Sayville, and have the greatest probability of buying or servicing with their dealership. Those findings were then compared to industry data to establish consumer patterns and trends within the local market. The result of the industry data enabled Sayville Ford to identify local vehicle owners. This includes same-brand owners who had never visited Sayville Ford, and off-brand owners with a historical pattern of crossing over to Ford. Melanie refers to these as, “conquest” customers.

A pathway to the Future

Once Sayville Ford clearly defined their market, they implemented a comprehensive targeted and digital marketing strategy using direct email and mail campaigns that consistently speak to customers throughout the life cycle of their vehicle. These custom messages include a thank you and welcome message for recent purchasers, maintenance reminders for newer, not yet in-equity vehicles but that may be due for maintenance, and ongoing targeted email and mail sales communications to customers in an equity position. Using high-quality creative campaigns, Sayville Ford promotes its best sales and service offers that reflect the status of the customer’s vehicle. For example, active service customers who routinely come in for service receive a $29.95 “Full Service Lube, Oil & Filter Change” coupon, but customers who are categorized as lost, or who do not regularly service with Sayville Ford, receive the same offer but for $24.95 to encourage them to come back.

Every outbound targeted email and mail campaign directs customers to an online campaign conversion site (www.SayvilleFordOffers.com). As a major component to Sayville’s strategy, this site not only displays the featured promotions of the email or mail campaign they have just received, it also shows them every sales and service offer that Sayville Ford is currently running. If a customer is not in the market for the specific offers they just received, they can visit the site to find what they’re looking for. This offer site boosted Sayville’s internet traffic as high as 330% percent.

When customers visit the dealership they see point- of-sale 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.

Within this overarching strategy lives a unique program that specifically targets vehicle sales within Sayville’s service lanes. This Vehicle Exchange Program (VEP) focuses on proactively selling to service customers who are in an equity position and remains one of Sayville’s core messages to customers.

“We looked at our marketing, we realized sales and service were doing different things. Service had their campaigns and sales had something different and it was not a uniform look. The Vehicle Exchange Program is one consistent message from service and sales,” said Spare-Oswalt.

As soon as customers bring their vehicles in for service, a VEP Specialist greets the customer and explains that the customer is eligible to upgrade to a new vehicle for the same or lower monthly payment. Rather than wait and hope that customers will buy from them when they’re ready, Sayville Ford is taking the initiative to sell customers in the service bay before they enter the market and shop elsewhere.

“The best customer that any dealer can find is one they already have because customers who have an active service relationship with a dealership are seven times more likely to purchase with that dealership,” says Budd Blackburn, owner of Team Velocity Marketing, the company that Sayville uses for their sales and service marketing.

“When we began this plan our goal was to increase sales, market share and service penetration. We’re up 39 percent in new car sales and 22 percent in service growth and our active customer base has grown by 11 percent,” said Spare-Oswalt.

Right now, Sayville Ford is undergoing the manufacturer-initiated construction effort that will promote a more customer friendly environment. “We’re excited about the change. Our marketing company has also been really helpful with the project, and has helped us run pre-construction sales. It’s great because once we decide to run a sale, all of your marketing changes, it’s a really great process and clearly communicates to our customers,” said Spare-Oswalt.

Sayville has come up drastically in their marketplace. They are ranked 100th nationally for September 2013 sales, number 5 regionally and number 1 on Long Island.

“We’re really proud about these rankings. This year, we’re shooting for the President’s award,” said Spare-Oswalt. This working smarter technique means a higher return in all profit centers Sayville. With their most recent effort to implement a targeted marketing strategy that promotes all their profit centers by attracting, selling, servicing and retaining more customers for less cost, Sayville Ford is looking to spend the 2014 year growing in similar fashion.