A hot topic of much discussion today is the decrease in the sales process. There are many opinions on whether shortening the time it takes consumers to buy a vehicle is the answer to providing a better customer experience. There’s no doubt that it can be arduous and exhausting for a consumer to buy a car – from finding the right one, to filling out paperwork, negotiating price, spending time in finance and then, ultimately, sitting through a lengthy presentation as the salesperson explains all of the vehicle’s features during the delivery process.
A recent story in Automotive News details how one dealership chose to take a different tactic. Instead of making a buyer endure a lengthy but necessary tutorial on a new car at the time of sale, Jaguar Land Rover of Fort Myers delivers the lesson later, at the owner’s home or business. And when it’s time for repairs or maintenance, an owner can get a loaner car delivered to him or her and avoid the hassle of driving to the dealership for service. As a result, the dealership’s CSI scores have “skyrocketed,” according to General Manager Brian Del Negro.
For the most part, customers already do their car shopping in phases, if you think about it. They start by researching or reading vehicle reviews and, according to some studies, will spend upwards of 10 hours or more online doing so. They key here is that it is highly unlikely they are doing this research all in one sitting. Then, after taking their time preparing themselves and narrowing down vehicles, they visit 1-2 dealerships. Then, in almost every case, they are pressured to make an instant buying decision (i.e. “What would it take for you to take this vehicle home today?) This, of course, is certainly understandable from the dealership’s side — it doesn’t want to risk losing the sale to a competitor. But, what if the customer simply isn’t ready to buy right then?
Whether the customer experience proves to be a great one for the consumer certainly hinges on numerous things. For some it could be the lack of pressure. Others may want an expedited buying process. While some may want to take their time. While Jaguar Land Rover of Fort Myers offers the encore delivery service, it’s certainly not mandatory for those customers who are fine with going through the delivery process on the spot. That being said, it certainly helps differentiate them from their competitors and allows customers options that they don’t get at other dealerships. One intriguing dealership-centric benefit of encore delivery is that it allows the dealership a second opportunity to build on that relationship, rather than just have the customer feel really important during the sales process, then forgotten about the next day.
These services certainly add expenses to the bottom line of the dealership. But, ultimately, are paying off with increased service business and higher CSI scores. The relationship building phase also gets extended, which allows the customer to feel more important and appreciated. And, that is the beginning of customer loyalty and, ultimately, a brand advocate.
Mimicking customer behavior is one of the oldest sales techniques in the business. So is finding common interests and building rapport. However, with three generations of car buyers in and out of dealerships daily – Boomers, Gen X and Gen Y – it’s harder than ever for salespeople to accomplish this convincingly, let alone understand what type of experience each demographic is looking for. A recent article in Wards Auto, describes a dealer that provides generational training to his employees in an effort to assist them in better handling customers. The dealership first tries to match up salespeople with customers to optimize the experience – such as a Hispanic salesperson to assist a Hispanic customer. And, when that’s not possible, the training enables the employees to better understand what type of experience each generation is most likely seeking, and to then provide that. The dealer explained that every customer is different and that salespeople shouldn’t feel as if they need to provide the same experience to everyone, as not everyone wants the same thing. In his opinion, Boomers are more inclined to want to negotiate, while Millennials want something thrown in. Older customers aren’t necessarily seeking a fast buying experience, (as has been the hot topic of late) but Millennials are much more time conscious.
What does all of this have to do with customer loyalty?
In today’s automotive marketplace, OEMs and dealers are increasingly shifting the retail battlefield to customer experience. While that may be an excellent strategy, how do you create the perfect customer experience, and deliver it consistently, if all of your customers want different experiences? If your dealership decided that a one-hour sales process is the optimal customer experience, how will that Boomer, who wants to take his or her time shopping and negotiating, feel about the experience? They will probably rushed through the process, which will either run them off, or leave them dissatisfied. On the other hand, if a Millennial is forced to sit in your dealership for 6 hours, they’ll probably feel very unhappy too.
The customer’s perception of their buying experience affects a lot of things: the likelihood that they will recommend your dealership; the type of review they share, either online or with their family and friends; and whether or not they choose to continue to patronize your dealership. As consumers are holding onto their vehicles for much longer these days, customer retention heightens in importance and these points become ever more relevant.
If you recognize that there isn’t necessarily a single “best” customer experience, but, that the customer experience must be tailored for every customer, you may find it easier to retain customers of all demographics. By training salespeople on the types of experiences different generations would like. And, by giving them the flexibility to provide that experience on an individual basis, you will have happier customers across all generations.
Loyalty programs surround us. We live in a world filled with keychains on which multiple little plastic mini loyalty cards dangle. There aren’t many places where we spend our money that don’t offer a rewards program or, at the very least, track our purchases via a quasi-rewards program that only allows us to purchase items at the “loyalty” price, versus the normal price (think grocery stores). While adding a loyalty program into your offerings is certainly something you should consider, keep in mind that not all customers are created equal. Blanket offers to everyone enrolled in your loyalty program could actually cost your dealership some business. Let me explain.
Almost every business has their own version of a “best customer.” These customers typically continuously visit the business and generate most of the revenue. They may not be the most frequent visitors, but bring the most profit with their visits. In all marketing, segmentation is key. It is certainly not the best move to spam your entire DMS with the same offer. That would be a waste of time.
Is that customer that only visits your dealership to take advantage of an oil change coupon worth the same reward as the customer who regularly services and accepts service upsells?
Identifying who your best customers are in terms of profitability can reap benefits in two ways.
1. It allows any rewards and/or specials to be precisely targeted to those customers who deserve it most and who bring the most promise in terms of upset opportunities. It’s fairly common to throw out a $20 oil change coupon in the hopes that some additional service business is earned when that coupon is redeemed. That being the case, what percentage of those redemptions are accompanied by service upsells? By blanketing your customers with discounts and coupons, you simply attract those customers who only patronize you if they have a coupon and, in most cases, decline any service recommendations you may present to them.
2. Identifying that group of your “best” customers will allow you to find patterns, characteristics and behaviors that exist within the group. Once you know what qualities your “best” customers have, you can start identifying customers who have similar qualities or behaviors that aren’t quite at that “best” status yet. Then, you can tailor your marketing or rewards to that second tier of customers in an attempt to elevate them into that “best” customer category.
Rewards programs are dynamic. Members should be segmented and marketed to in a personal way designed to maximize the outcome. Any marketing should either encourage existing behaviors or nurture customers into adopting the attributes of your “best” customers. Don’t use a set-it-and-forget-it blanket reward for members. If you do, you’ll find that your reward program could actually cost you money as all those loss-leader oil changes come into service with no upsells.
Identify your most profitable group of customers. Then leverage your loyalty program to instill in that second tier of customers the qualities from your most profitable customers. In this way, the base of customers that are generating the most income for you will grow and help to create a more solid foundation for your dealership’s future.
When done properly, Google Ads are an effective piece in any multi-channel marketing strategy. The ability to target traffic to specific behavior and keyword searches is invaluable. Well, Google is now following in the footsteps of Facebook and Twitter and on September 27 announced the roll-out of a new Google Ad feature named Customer Match. This new feature allows Google advertisers to upload first-party email databases and serve ads via Google search, YouTube and/or Gmail to the business’s specific customers. Facebook and Twitter advertising platforms have had this feature for some time and it has been a very effective tool for businesses to market to existing customers.
Dealers that have used these features in any digital marketing efforts on Facebook and/or Twitter should understand how powerful this type of targeted marketing can be. Imagine using targeted Google Ads to market offers and specials purely to members of your loyalty program. While not everyone uses Facebook or Twitter, nearly everyone uses Google in some form or another – whether that’s as a search engine, email service or to simply watch video content.
Dealers could also use this new feature to target service customers, shoppers that visit but do not purchase, and just about any combination of a segmented audience. If you can create a segmented email database, you can now precisely target marketing to that specific list of people using Google. When you factor relevance into the equation, this new feature opens up a world of possibilities for dealers to use in their marketing.
It’s been proven that consumers who receive relevant offers and information respond at a much higher rate than to mass campaigns of any kind – whether that’s via email, direct mail, or digital marketing. The ability to precisely target these segmented groups with offers via Google is a highly effective tool for dealers to add to their arsenal.
This new Google feature could also decrease the costs of the ads themselves. Instead of getting into a bidding war over keyword searches, targeting specific individuals that are already connected to the business itself, should certainly produce better results for less money. Since it’s your data, nobody else can use it to target your customers. Therefore, you eliminate any competition with others for those specific customers. Sure, those customers will still be targeted through keyword searches and behavioral targeting. However, the edge that Customer Match provides dealers is the ability to send hyper-relevant messages to their customers, rather than just generic ones to the masses.
If you’re a dealer that utilizes Google Ads, consider immediately integrating this into your marketing ad spend. If it performs as well as Facebook’s Custom Audiences and you should find that it’s one of the most valuable advertising paths available.