Today’s car business is undoubtedly one of the most competitive retail markets with thousands of dealers vying for the attention of ready in-market buyers. Many dealers share similar ongoing challenges of 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 continue to shift, so too must a dealer’s Best Practices to reach them. Today’s traditional mass media platforms like TV, print and radio, no longer have the reach or impact that more personal and digital mediums have, like targeted direct email and mail, internet, mobile and social. Dealerships that do not understand targeted and digital marketing continue to see diminishing returns with traditional mass marketing that remains costly, not to mention extremely difficult 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. Although, combining multiple ad mediums can present its own challenge; as the average dealer works with multiple vendors to execute their marketing strategy which can result in different messages and designs that too often are not integrated with one another. The key is to integrate all targeted and digital advertising into one cohesive campaign to maximize results.
University Toyota, in Morgantown WV, has found a practical and effective solution using an integrated targeted and digital marketing strategy across multiple mediums. University now works with one marketing partner to attract, sell, service and retain more customers for less cost than traditional mass marketing.
“We have wholeheartedly embraced this concept and implemented it. Our sales are up 65 percent in just 2 months and our service business is up almost 32 percent. We only do business that is honest, in a straight forward manner – it’s that way or no way at all. No smoke and mirrors, no tricks. This strategy has allowed us to use our database effectively by integrating it with a strong combination of targeted and digital outreach,” said Andy Clayton, Dealer Principal.
University 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 University Toyota to identify vehicle owners with the highest statistical probability of buying or servicing with their dealership, identify same-brand vehicles owners who had never visited their store, and off-brand vehicle owners with a historical pattern of crossing over to Toyota.
Once University Toyota had more clearly defined their market, they 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, University 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 $36.95 “Full Service Oil Change” coupon, but customers who are categorized as lost, or who do not regularly service with University, receive the same offer but for $24.95 to encourage them to come in.
University 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. So, 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. University Toyota recognized the opportunity to broaden its service marketing program with conquest and has greatly expanded their reach of potential service customers.
Every outbound targeted email and mail campaign from University directs customers to an online Campaign Site 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 University Toyota is currently running. If a customer is not in the market for the specific offers they just received they can check University Toyota’s campaign site, www.UniversityToyota.com or other available offers with just a few clicks.
Today, a strong digital platform is essential to any successful marketing strategy and University’s platform includes Targeted Search Marketing (TSM), Online Display Advertising (ODA), as well as social components like Facebook. TSM is an online pull-strategy that gets a dealer’s message in front of consumers who are raising their hands saying “I want to buy a car from you”. TSM helps drive the most qualified consumers to a dealer’s site. According to Google, paid Search traffic is 84 percent incremental to Organic Search traffic, meaning SEO alone will only cover 16 percent of all searches for a dealer. Additionally, University’s ODA helps drive consumers down the online funnel, providing conversion rate lifts for their TSM campaigns and helps keep them top-of-mind for consumers who are in-market to buy a vehicle. Facebook advertising enables University Toyota to build and foster relationships with current and potential customers on an on-going basis. Creating conversations with potential customers before they even walk into the showroom, and nurturing relationships with existing customers to ensure they do business with University again and again.
“This integrated strategy has given us the courage to fully immerse ourselves in digital advertising. We knew we were missing out, hunting and pecking around the periphery, but this strategy gives us the complete package. I have to admit the price was a bit intimidating initially, but it was a bold move that has worked out very well to date,” said Clayton.
Another important component of University’s strategy, often overlooked by dealers, is in-store merchandising or Point of Sale (POS). POS provides added value when customers visit the dealership and see merchandising throughout the store that mirrors the exact promotional offers they have just received by email or mail. POS helps validate the dealership’s advertising message, builds credibility with the customer and increases the dealer’s closing ratio.
One of the most noteworthy changes to their previous marketing strategy is University’s new sales-in-service program, the “Vehicle Exchange Program (VEP)”, where a dedicated team of Specialists proactively sell to service customers who are in an equity position. When customers bring their vehicles in for service, a trained 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, University takes the initiative to sell customers in the service bay before they enter the market and shop the competition. This sales-in-service program is integrated across University’s web site, campaign conversion site, showroom and service lanes, as well as their direct mail.
“I’ve been doing this since 1981, and I haven’t seen a program that has had the effectiveness of this strategy in such a short amount of time,” said Paul Knotts, General Manager for University Toyota.
“The best customer any dealer can find is one they already have,” said Budd Blackburn, owner of Team Velocity Marketing, the company that University 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. University has done a stellar job at turning their service lane from one profit center into two.”
Additionally, University takes steps to improve their online presence and reputation by using a unique business-rating application that has an in-store capture component to proactively obtain ratings from customers while they’re still in the dealership. Once customers make the decision to purchase a vehicle, a University representative asks them to complete a brief online survey while they wait for their transaction to be processed. If the customer gives the dealer anything less than a 5-star rating, the dealership is immediately alerted and provided the opportunity to rectify any issues or concerns before the rating is posted live on the internet. This helps improve the overall customer experience and helps University Toyota maintain a stellar online reputation.
Up 65% in Sales and 31% in Service, University Toyota is Hot, Hot, Hot Heading into Summer
The Bottom Line
What They Do
1. Define their ideal local market by finding the perfect customers and prospects with the highest statistical probability of buying and/or servicing with their dealership now and in the future.
2. Create dynamic, cohesive campaigns that consistently speak to their 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 they sell.
4. Execute a bold digital platform that incorporates TSM, ODA and Social to help drive consumer traffic, build brand recognition and improve ROI.
5. Proactively take steps to improve their online presence and reputation by using a unique business-rating application.
Resources They Use
1. DMS: Reynolds and Reynolds www.reyrey.com
2. Targeted Marketing Company: Team Velocity Marketing www.teamvelocitymarketing.com
3. Online Reputation Management: BusinessRater www.businessrater.com
Recommended Actions
1. Define your perfect market by identifying 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 brand(s) you sell.
4. Implement a strong digital platform using TSM, ODA and Social to help drive consumer traffic to your web site and dealership, build brand recognition and improve your ROI.
5. Improve your online reputation by using a unique business-rating application.
