Browsing articles from "September, 2016"

Efficiency is the Key to Loyalty

By Mike Gorun  //  Uncategorized  //  No Comments

Have you ever tried to call a dealership – whether it’s to inquire about a vehicle or schedule a service appointment – just to get placed on eternal hold or thrown into someone’s voicemail? Many consumers have and, just like you, they don’t like it.

People are busy. When they pick up the phone to schedule a service appointment, or try to get information about a vehicle when they are in-market, if the first impression you give them is hold music, or voicemail boxes, they could easily move on to the next dealership – especially if they are a sales customer.

Most dealers, however, just assume that everything is going smoothly because they don’t hear complaints about the issue. The reason they don’t hear is because the people who WOULD complain don’t bother to call again – and, perhaps, never come in again.

Every dealership has a receptionist. Some have one for sales and one for service. Some even assign call tracking numbers to each department so that they can monitor the outcomes of these calls. Or, at the very least, track the volume of them. The problem is that many dealers will have two or three phone numbers on their website – sales, service and parts. The customer, however, doesn’t know or care about the difference. They just call the first one that they see. So inevitably dealers will have sales calls coming in on the service line and vice versa. Oftentimes there is a single “main” receptionist handling all of the calls and routing them to the proper departments. But they can easily get overwhelmed. What happens to those customers that called for sales, were put on hold and then hung up? Or they called for service to schedule an appointment and the same thing occurred?

Chances are that you’re paying a receptionist minimum wage (or close to it) to answer and route the calls. Between sales, service and parts, I bet that there are times when they are overwhelmed. They transfer the call and assume that the call will be answered. Too often it’s not. In each and every one of those cases, many times the dealership either lost a sale or parts/service revenue.

Today’s consumer is all about efficiency and simplicity. The less time you can take up to achieve their goal when they try to contact you, the more likely they are to appreciate and think highly of you. If you make things easy for them, they will appreciate it and have a positive experience.

If it’s difficult to do business with you, the opposite will occur. Customer loyalty is something that is built over time. It’s great to ensure that the customer has an excellent experience and feels appreciated when they’re physically AT your dealership. But that experience has to extend to any contact or interaction they have WITH you as well.

If you’re using call tracking numbers, monitor those calls religiously. Make sure that any unanswered calls up are called back promptly. Apologize that nobody picked up the phone and assist them. I promise that they’ll be impressed. People understand that you get busy. Perhaps they meant to try to call back later, perhaps not. But if you call them back first, not only will they forgive you, but you’ll impress them too.

That’s how you build a loyal (and profitable) following. Make sure that each customer who TRYS to do business with you is able to. Don’t let a dropped call result in a lost sale or repair order. It can easily happen. But it can also be remedied easily. And that pro-activeness can go a long ways to retaining and building a solid customer foundation that you can count on.


Now Is the Time to Be Selling Pre-Paid Maintenance

By Mike Gorun  //  Uncategorized  //  No Comments

With the major shift into leasing certified pre-owned vehicles by several OEMs and major financial institutions, many dealers have predicted a decline in service contract sales. However, according to an article in Automotive News, they would be wrong to do so.

Due to an influx of low-mileage pre-owned vehicles, captive finance companies and others have started to embrace certified pre-owned leasing programs. Lease customers haven’t always been the best candidates for service contracts – especially high line leases, as many of these vehicles come with free maintenance. However, the length of many leases and, more importantly, the length of loan terms have increased.

This is an indicator that many consumers who opt for extended term loans, or leases, would certainly benefit from service contracts as they will either 1) still be in their lease when the free maintenance expires; or 2) hold onto their vehicle for an extended period of time, far longer than in the past.

According to the article, while new vehicles will still outpace used vehicles in service contract penetration, there’s no need to worry about a decline in service contract sales. In fact, both new and used vehicle service contract penetration has increased among prime borrowers, with the gap between new and used vehicle service contract penetration decreasing from seven percent in 2007, to just 0.5 percent in the second half of 2016.

Many buyers – prime and sub-prime alike – increasingly see the value of a steady monthly vehicle expense without the worry of a hefty service bill. Yet there are many finance managers that don’t present service contracts as aggressively to prime borrowers for used vehicles as they do to sub-prime — they assume the customer won’t be interested. While this may historically be accurate, the CPO leasing movement, along with extended loan terms, have substantially altered the rules of the game.

Consumers have warmed up to service contracts and have come to understand the benefits for convenience and financial stability. And, as new car margins continuously decrease due to manufacturer incentives, competition and increasing pricing transparency via third party sites, dealers increasingly rely on their F&I departments to increase profits through back-end product sales. Yet many F&I managers have been trained – via customer interactions and their common sense – that certain customers don’t need or want a service contract, but that is where the shift has occurred and there is opportunity aplenty!

Perhaps in the past service contracts didn’t make sense for certain buyers. However, these days, increasingly car buyers ARE investing in service contracts — both for purchasing AND leasing.

The key to any successful selling process is consistency. Train your finance managers not to assume anything. Present, show the value of and sell service contracts to every customer, regardless of lease or purchase. According to the statistics, they will thank you for it, and it’s a win-win for the customer and your dealership.


One Dealership’s Killer Community Support Program

By Mike Gorun  //  Uncategorized  //  No Comments

13879205_10208843224451041_8142426210181189279_nTom Hawkins, Dealer Principal of Hawkins Chevrolet in Fairmont, MN, a cornerstone of his local community, was searching for a way to provide even more support to his local area. He reached out and identified an area that had both a need and a raving group of supporters — animal lovers. Being a big animal lover himself, he contacted his local animal shelter, Martin County Humane Society of Minnesota, and made arrangements for his dealership to sponsor two animals per month, covering their adoption fees.

The animal shelter agreed to promote the sponsorships on social media via branded posts and chooses which animals to sponsor so as to increase the likelihood that the hardest to sponsor animals are promoted for adoption.

The sponsorship costs just $250 per month ($125/animal) in adoption fees, yet each and every sponsored pet posted to the animal shelter’s Facebook page brings accolades from the shelter’s fans – all of whom live in Hawkins Chevrolet’s selling area. It has produced a storm of goodwill with posts thanking the dealership for caring about the animals and sharing these branded “pleas for help” with all of their local friends and family.



In addition, many of the animal lovers also visit Hawkins Chevrolet’s Facebook page and thank them for helping the animals avoid being euthanized.

However, in the end, for Tom at least, it’s about giving back.

Customer acquisition, loyalty and retention are three things that every dealership is concerned with. Acquisition? No problem. Spend enough money and you’ll get some customers. Retention and loyalty, however, are a different beast. People want to do business with companies that share their values. In this case, Tom has been able to be involved in his community while also capturing the minds – and more importantly – the hearts of many of the animal lovers within it.

Social media has a huge reach: the average person on Facebook has 338 friends. In the example above, that post about Kai (who was adopted) was shared 22 times. Exponentially, the reach of that single post could be in the tens of thousands when you consider how many people “could” have seen it.

Have they sold any cars from their 3-month old initiative? Who knows — and I sincerely doubt Tom cares. If he cared he would add “Animal Shelter” as a source in his CRM. You want to know what really matters to Tom? The impact and difference he, as a business owner, can have on the people in his community and his customers.

Oh, and you know the person who ended up actually adopting Kai (the dog in the Facebook post above)? He was so impressed with the support of the animal shelter that he wrote a letter to the editor of the local paper.



Perhaps you don’t believe in social media. Perhaps Facebook isn’t something you even bother to care about. If that’s the case, I guarantee that the article, published as a “Letter to the Editor” in the community’s local paper, IS something you care about. Why? Because you probably write some hefty checks to your local paper to market your dealership and vehicles.

This truly is a win-win situation. Tom did not do this for the accolades, he did it as an animal lover and to support his local community. The small investment has been a huge help for the local community and has paid huge dividends in terms of the dealership’s reputation.

In the end, what’s $250/month to help your community, generate positive word-of-mouth, directly impact a couple of people (and animals) a month and, perhaps influence the decision as to where someone should buy their next vehicle.

It’s certainly a lot less than the $640 per customer spent on average by most dealerships today. And that typical customer acquisition cost comes with none of the side benefits, but at over twice the price. You decide which makes better sense. Kudos to Tom and Hawkins Chevrolet for making a difference.


For Maximum Revenue You Must Get Emotional

By Mike Gorun  //  Uncategorized  //  No Comments

Many businesses, including the automotive industry, have a strong focus on creating a better customer experience through technology. In fact, technology has transformed the customer experience across all industries. Consumers can buy a multitude of products online and have them delivered, in some cases, in an hour. Technology has even advanced to the point that consumers can buy a used vehicle completely online, taking delivery via a vending machine.

However, sometimes technology ceases to enhance and improve the customer experience and starts to degrade it.

Technology has certainly transformed how we do business but, in the end, do consumers really want a complete purchase interaction with absolutely no human involvement? No. What they REALLY want is an easier, more efficient and transparent buying process. Technology has assisted in providing that, but we can’t forget that people buy from people.

It is important to always remember that we are in a “people” business. Let’s look at it from a consumer car buyer perspective. Thousands – perhaps millions – of pages of information are now available online for consumers to access free of charge. Studies indicate that the average consumer visits 24 touch points prior to coming into the dealership, with dealership visits averaging under 2 percent of those visits. As a result, many assume that customers know more than the salespeople do when they show up at the dealership… and they may be right.

However, the problem is the customer still doesn’t know EVERYTHING. No website can illustrate to a customer how a car FEELS, SMELLS or DRIVES. In addition, even the most knowledgeable customer visiting your showroom very likely still has questions to ask and expects answers.

A recent study by the Harvard Business review reported that, “emotionally connected customers are more than twice as valuable as highly satisfied customers. These emotionally connected customers buy more of your products and services, visit you more often, exhibit less price sensitivity, pay more attention to your communications, follow your advice, and recommend you more – everything you hope their experience with you will cause them to do.” The study outlined how using an emotional-connection-based strategy within an organization can increase these types of customers, reduce attrition and increase customer advocacy. All of these things are exactly what car dealerships need to differentiate themselves from their competition.

I’m not being original when I say that the battle for consumers in the car industry will be in differentiation. Just don’t forget that it’s all about the people – your employees, leadership and customers.

The technology is there to help make the process more efficient, NOT to replace people. Consumers will never have an emotional connection with a vending machine. So, as alluring as that type of buying experience may SOUND, being a great place for people to visit; with great people to interact with; that take good care of your customers; and ensure a superior customer experience; will always win the battle.

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