Bring Them Back (continued)
SUPERIOR DEALER SOLUTIONSsm
Copyright © 2008 Automotive Dealers Network. All rights reserved.
By Ron Lamb
VP of Sales / Reynolds Systems
email:
RLamb@AutomotiveDealersNetwork.com
Ron is a seasoned veteran of the automotive retailing
market and has been with Reynolds since 1991. He has
held positions such as marketing director, VP of
enterprise solutions, regional sales director and
general manager. Ron holds an MBA from Loyola
College.
    Make it Easy
    As much as some people and businesses try to resist it, using new technology is quickly becoming a necessity for
    any consumer-based business to satisfy their customers. Telephone calls are quickly being replaced by Web site
    interfaces, e-mails, and text messages. If you’re not using these channels to connect with your customers, you’re
    missing a big opportunity to gain new customers and may even be driving your current customers to your
    competitors. One key to strong customer loyalty is to make it easy for your customers to do business with you,
    whether through service reminders, appointment scheduling, or flexible communication methods.

    Service reminders are nothing new, but are still one of the most powerful and beneficial ways to keep your
    customers coming back. Studies have shown that service reminders sent to consumers when maintenance is due
    generate a 24% response rate. In addition, customers who respond will spend on average 23% more in customer
    pay work. In other words, if you’re not currently using any kind of service reminder system, you are missing out on
    a lot of business.

    If your customers want to make a service appointment, do they have to call the dealership or can they make an
    appointment directly on your Web site? If they call, do they have to wait on hold, or worse, talk to a machine
    instead of a live person? If they can make an appointment on your Web site, how quickly do they get a response if
    they get a response at all? Can they find your dealership address, phone number, and hours of operation quickly
    and easily on your site? If it takes too long to find what they’re looking for or they can’t communicate with you in
    their chosen method, they may quickly leave your site and visit your competitor’s instead, resulting in lost
    customers that you never even had a chance to meet.
    Ask your customers if they would consider taking their business to a local competitor of yours, and the answer
    should be something like, “No way!” or “Are you kidding?” Unfortunately that is not the reality for most
    dealerships. Instead, they are constantly fighting to keep their customers coming back to them for regular service
    and for future vehicle purchases. Customer loyalty for dealerships is rarely as strong as you might see with
    rivalries such as Coke vs. Pepsi, Bud vs. Miller, PC vs. Mac, etc*…but it can be.
    When a customer’s vehicle is ready, do you give them the option of being notified via an e-
    mail or text message instead of a phone call? Even if the phone is the preferred method of
    communication, your customers will be impressed when you give them the option, and you
    will be showing all of your customers that you respect their time and have their best interests
    in mind.
    Dealership Image
    Now consider your dealership’s image. It is very important that you don’t confuse your image of your dealership
    with your customers’ image of your dealership. They may in fact be very different things. Be sure to look at your
    dealership from your customers’ perspective. Although your image of your own dealership may be more accurate,
    in reality it means nothing if your customers don’t perceive it the same way.

    Your customers have already bought into your OEM’s image before they even come to your dealership.
    Their expectation is that when they get to your dealership, they will get the true experience of that image. Any
    deviation from it can easily be perceived as a negative to your customers…even if you perceive it as a positive.
    For example, creating an ultra-comfortable customer lounge with cushy chairs and artistic paintings on the walls
    may sound like a good idea, but it could actually turn customers off in a service department that works mostly with,
    say, a rugged truck brand, where your average customer is not looking to be pampered. You need to give those
    customers a more rugged experience, such as pictures on the walls of mud-covered trucks. Your reputation as a
    dealership is largely built on how well you fit the brand image of your manufacturer, not just the level of service
    you give your customers.

    To see how your dealership is doing, do your homework on the overall brand messaging and target markets of
    your OEM. Look at their commercials and their Web site. Then take a close look at how well your dealership and
    Web site fit that image. Do you effectively reinforce the manufacturer’s messaging? Are you focusing your efforts
    on reaching out to the right target market? If you answered ‘no’ to either of these questions, fixing your messaging
    and branding should become a top priority.
    Among customers who say their service visit fell below their expectations, only 4 percent
    intend to return to the dealership for future service. However, this figure increases to 73
    percent among customers who say that their expectations were exceeded during a service
    visit.
-J.D. Power and Associates 2007 Service Usage and Retention StudyTM
    Be Loyal To Your Customers
    Loyalty goes both ways. The simple fact is if you’re not loyal to your customers, they’re unlikely to be loyal to you.
    This means you must look out for their best interests with every visit. If you tell them when to pick up their vehicle,
    make sure the vehicle is going to be ready at that time. If you get backed up and can’t meet that time, let the
    customer know immediately so they can make other plans. Otherwise you will have a very upset customer arriving
    to pick up a vehicle that’s not ready. You might as well just hand that customer directions to your competitor’s lot
    because they probably won’t be coming back to you.


    Use Salespeople to Drive Service
    As part of the sales process, many dealerships now require the salesperson to walk the customer into the service
    drive and personally introduce them to the service manager. This is a very important step in earning that customer’
    s service business. If your customers don’t already have a connection with your service department before their
    first oil change, your service department is just another service center to them, and you may have had your last
    transaction with that customer.

    To make it less forced, try walking the customer to the service drive to take delivery of their vehicle after the PDI.
    This sets up a great opportunity for the introduction with the service manager and advisors. You could even arm
    the service manager with free oil change coupons for each customer to ensure that you get them to come back
    for their first service, giving you the opportunity to impress them and keep them coming back.

    If your salespeople are resistant to adding this step to the sales process, incentives are easy to implement. If you
    have the ability in your system, run a report that shows the percentage of customers who return for service,
    sorted by salesperson. That report will enable you to offer incentives to your salespeople, based on their
    individual retention levels.

    Remember that customers who return for service are far more likely to buy future vehicles from you. This
    means that every customer your salespeople can bring to the service department could turn into a lifetime of
    service revenue and multiple future vehicle sales.
    “Don’t assume that the lack of complaints is equal to a satisfied customer base.”
–        Glen Urban, Professor at MIT Sloan  School of Management
    Conclusion
    In recent years, we have seen a major shift in the relationships between retailers and consumers. Consumers are
    more powerful, informed, and demanding than ever. Your dealership now has a critical window of opportunity to
    strengthen your position in this changing marketplace. By aggressively adopting total CRM strategies, you can
    position yourself as an indispensable resource serving the lifelong needs of car buyers. With a little work, the
    right tools, and some creativity, you can earn the unbreakable and undying loyalty of your customers.

    Your mission now is to take a close look at the real customer experience that your dealership provides, and find
    those golden opportunities to wow your customers from the second they arrive. Where do you start? Get out in
    the service drive and talk to your customers at each step in the process. Get their opinions on how you’re doing
    and what you could improve. Call customers that recently purchased a vehicle to get their thoughts. Once you
    understand your customers’ point-of-view, you can shape your plan of action that will keep them coming back to
    you every time.
    Welcome, welcome, welcome!
    If you’re looking for something quick, easy, and inexpensive to keep your customers coming back to your
    dealership, the customer greeting should definitely be at the top of the list. It is possibly the single most
    memorable part of the dealership experience. The greeting sets the tone for the entire visit, and even a great
    overall dealership experience can be ruined in the customer’s mind from a bad greeting.

    Take a look at your current processes. When your customers walk in the door, how do your people greet
    them? Do sales ups get attacked by your sales staff? Do your service customers have to look around or wait in
    line to talk to a service advisor? Each and every customer that comes to your dealership must be made
    comfortable the instant they walk on your lot or in your door. Just a few moments of waiting or feeling bothered
    can send a customer packing.

    In the sales department, the unfortunate reputation of automotive dealerships is that a high-pressure salesperson
    will attack every customer as soon as they set foot on the lot. Many of your customers will automatically think of
    the salesperson as the enemy, no matter what they do or how warm their smile is. You have to make the customer
    feel welcome and acknowledged, not pressured, as well as let them know that the salesperson is there to help
    them to buy a car…not to sell them a car.  There are several innovative ways to get the most value out of every
    customer greeting.  

    For sales ups, try this: Give each of your salespeople a supply of small writing pads and pens with your
    dealership information (and ideally that salesperson’s name and contact information) on them. When a prospect
    arrives on the lot, the salesperson can greet them with a smile and give them a pad and pen so they can take
    notes about the vehicles as they look through the lot. This does four very powerful things for you:

    •    It creates a more comfortable, helpful, and happy introduction between customers and salespeople.
    •    It makes it easier for your customers to record their questions, making them more likely to stay on the lot
    until those questions are answered.
    •    It gives them a connection with the vehicles they take notes on, so those specific vehicles are still top of
    mind, even if they leave your lot.
    •    If they do happen to leave your lot and visit your competitors, they may continue to take notes using
    your pad and pen, so your dealership name will still be in front of them instead of being forgotten. With any
    luck, those customers will come back to you when it’s time to make their final purchase.

    For your service customers, it’s all about time. If you respect your customers’ time, they’ll be happy to give you
    their repeat business. Never let your advisors forget that your service customers are often on pretty tight
    schedules, so greeting them as soon as they arrive is absolutely critical to keeping them satisfied and calm. Every
    time an employee walks by and doesn’t acknowledge them, they may feel like they are not welcome in the
    dealership, their time isn’t respected, and their business isn’t appreciated.

    In addition to an immediate greeting, the service advisor can save time in the write-up process and impress
    the customer if they greet them by name. As the customer is pulling up, the advisor can enter the license plate
    number into your system to get the customer’s name. They can then welcome that customer back to the
    dealership if they are in the system, or prepare to enter new customer information if they are not. This kind of
    proper greeting is a great way to reinforce each customer’s relationship with your dealership.

    Show your customers that they’re important to you by making every customer feel like the only customer.
    During busy times when you have customers waiting in line in the service department, whether at the advisor’s
    desk or cashier’s desk, be sure to designate someone to answer incoming phone calls. If the phone call is for an
    advisor or cashier that is currently helping customers, tell the person on the phone that they are with a customer
    and take a message. If an employee answers the phone instead of taking care of the people that are in front of
    them, the customers in line will immediately feel disrespected and will think their business is less important than
    the person on the phone. You can bet that those customers won’t be in a hurry to come back to your dealership.

    If you’re thinking, “I don’t get any complaints about these issues,” don’t assume you don’t have any of these
    problems. If a customer is slightly upset, you will probably hear about it, but the customers that are really angry
    won’t say a word. They’ll just stop coming back.
    In his book Customers for Life, Cadillac dealer Carl Sewell calculated that he realized some $332,000 in sales
    for each customer he kept happy and coming back over the course of his or her driving life.
    Competing With the Independents
    Independent quick oil change businesses are growing and expanding everywhere these days, and, as much as it
    hurts to say it, they’re profitable. But you don’t have to take it lying down. Those are your profits they’re making,
    and it’s time for you to take them back!

    As a certified dealership of your manufacturer, you are the experts when it comes to servicing your
    vehicles. Your customers know and believe that, but many of them go to the quick oil change shops anyway. Why
    would they do that? Two reasons: convenience and price. Or to be more accurate, convenience and the
    perception of price.

    Most of the independent quick oil change businesses offer walk-in oil changes 7 days a week with little to no wait.
    Picture a person that works from 8:00 AM to 5:00 PM Monday through Friday. When they need to get a quick oil
    change on their vehicle, how convenient is your dealership for them?  If you close at or near 5:00 PM on
    weekdays and only have limited Saturday hours, you could offer free oil changes and you still wouldn’t get that
    customer to come to you for an oil change. Try expanding your hours to match or exceed the flexibility of the
    independent shops around you.

    Pricing is another area where it is tough to compete with independent shops. But it’s not because they’re cheaper.
    It is because they’re perceived to be cheaper. You know that $19.99 oil change advertised at the independent
    quick service shop up the street? How many of their customers do you think actually pay only $19.99? There are
    virtually always upcharges that raise the final price for them (i.e. synthetic oil, shop supplies, miscellaneous
    charges, etc.), and their oil change may not include all of the services you offer (i.e. shuttle service, inspections,
    car wash, etc.). That special low advertised price is just a way to get customers in the door.

    If you offer a similar price, advertise it. If your oil change includes more services than the independent shop, make
    sure your customers know it. If potential customers think they can  get the same exact service at another shop for
    a lower price, with more convenient hours, where’s their motivation to come to you instead?



    Get Creative
    In addition to providing great service, it is always a good idea to get creative. Find a way to stand out from your
    competitors. For your service customers, try giving them extra services that they don’t get anywhere else. This
    can be something as simple as vacuuming the interior of the vehicle, washing the exterior, shining the tires,
    leaving them a printed vehicle report card, etc. You can even give each customer a customized air freshener
    created with your logo on it. There is no limit to what you can do to stand out from your competition with a little
    ingenuity.
    A CSI score gain of just 10 points for satisfaction with the service advisor or in-dealership experience is
    estimated to add anywhere from $40 to more than $300 per customer annually, averaged over a one to three-
    year period.
–  J.D. Power and Associates 2006 Customer Satisfaction Service Index (CSI) Study
*Coke is a registered trademark of The Coca-Cola Company; Pepsi is a registered trademark of PepsiCo. “Bud” is a registered trademark of Anheuser-Busch
Company; Miller is a registered trademark of the Miller Brewing Company; “Mac” is a registered trademark of Apple Inc.
Using the Right Tools
In recent years, the world of customer retention has been revolutionized by technology in the form of CRM
solutions. In fact, some of the more comprehensive CRM solutions, including software, consulting, and training
services, have been found to produce a 50% increase in customer retention.

One of the most astounding and beneficial recent advancements in CRM tools is the ability to identify customers
with positive equity in their current vehicles. Contacting these customers and working with them to understand the
benefits of a trade-in, even if they are in the middle of a lease or loan, can not only give you the chance to sell
them a new vehicle before they’re even thinking about shopping your competitors, but it will also help you
increase your supply of viable pre-owned vehicles.

When shopping for CRM tools for your dealership, here are a few things to keep in mind:

    •    Make sure you use tools that are fully integrated with the rest of your system so there is no wasted effort
    in double-entry or correcting mismatched information in multiple databases.
    •    All CRM tools are only as good as the information you put in the system. This means that your customer-
    facing staff must learn to effectively collect, enter, and use customer information in the system.
    •    Be ready to commit to your new CRM strategy with ongoing training for your entire staff. If you don’t
    commit to using your CRM tools, you may not get much value from your investment. But if you utilize these
tools properly to facilitate connections with your customers, you can blow your competitors out of the water!