Browsing articles tagged with " Automotive"
Feb
21

How to Capture More Revenue Without Much Effort

By Mike Gorun  //  Uncategorized  //  No Comments

One of the advantages of Pre-Paid Maintenance Programs (PPM) is that they span the generational gaps. Regardless of which generation consumers happen to be in, none of them like surprise repairs, or other expenses. That’s why dealers focus on payments – and not price – when selling cars.

Consumers want fixed expenses. When it comes to millennials, they tend to be saddled with all sorts of debt including those credit cards they eagerly accepted while in college, and the student loans they end up with in order to launch their careers. Older generations are at, or close to, the point of fixed incomes from retirement plans or social security. Peace of mind that their vehicle is covered, and they are protected against any unexpected repairs, is perhaps more valuable to these consumers than ever before. That’s why many service industries have navigated to fixed price service plans.

Consider cell phones. The big rage nowadays is the “All-inclusive price” plan. Consumers simply choose a carrier and have all the service they need for a fixed amount. I’m sure you’ve seen the advertisements and commercials. Why are these plans so attractive? I would argue that it’s the fact that consumers don’t like surprises or variables in their monthly expenses.

PPM programs are attractive for exactly the same reason. They provide car buyers with peace of mind that their monthly vehicle expenses will remain the same and that their vehicle will be reliable.

However, while these items may be missed (or declined) in the finance office, there is a perfect opportunity that many dealerships miss to pursue them later in the service drive. Just because someone said “No” in your finance department, doesn’t mean that they will say the same thing later. Lots of factors are in play when buying a car – emotions are high, anxieties over payment could be in play, and exhaustion from being at the dealership for several hour could also be part of the problem. Once the sun comes up and all of those factors settle down, a consumer could perhaps have a clearer view of the advantages of a PPM.

Recent research suggests that almost 65 percent of dealers are ignoring the opportunity to offer dealer-branded PPM plans to current customers that visit their service lanes. While many offer OEM branded plans in the F&I department, the service lane is generally overlooked, not only as a selling opportunity, but as a chance to reengage hundreds of customers for a guaranteed period of time. Dealers are in fact losing two thirds of their possible customer service affinity as well as potential missed revenue measured in millions of dollars.

Really? Millions of dollars left on the service drive floor? Yes. It is so simple.

There is no argument that PPMs significantly raise dealer service retention. It is in fact documented that many dealers experience a retention rate of over eighty percent among those customers who purchase a PPM. So, why are so many dealers’ service retention numbers so much lower than that — anywhere from thirty, to, in rare cases, maybe sixty percent? That’s a huge loss in retention and potential profit.

In my thirty-five years in the automotive business dealers have shared many different rationalizations as to why they choose to overlook the potential of PPMs in service. While many of the reasons are beyond sensible business logic, such as “I can’t handle anymore service business,” or “My advisors are too busy to sell anything else,” they all escape the fact that, as a dealer, they likely see more customers in the service department in two months then they sell in new vehicles in an entire year! Yet only about 35 percent of franchise dealers offer service drive PPMs today.

It really is simple, but it takes a good eye on both new and used vehicle buyers in your service drive. Just like any other service lane up-sell, it should be positioned as an additional customer advantage on top of what the dealership is already doing, and should be included on all service product menus. By including it on your service menu it serves as a tool for your advisor to sell other services by utilizing any discount the plan may offer on the service the customer is contemplating purchasing during that visit.

Don’t be afraid to keep discussing the benefits of pre-paid maintenance with your customers – whether you sold them the vehicle or not – as it only serves to benefit both your dealership (by maintaining a customer relationship) and the customer.

Feb
14

Nobody’s Perfect: Trust Your Team

By Mike Gorun  //  Uncategorized  //  No Comments

In the automotive industry, as in all others, no matter whether you’re in a dealership or work as a vendor, you’re most likely part of a team. Sometimes the people on your team (or perhaps, even you) neglect an important detail or fail at something important. When this happens, it can cultivate emotions such as mistrust and anger. That lost commission, upset customer, or incorrectly placed blame, can transform attitudes towards your team – or their attitudes towards you – into something toxic that threatens to endanger the bond that should exist for a team to succeed. But you shouldn’t let it.

One day in 1987, Maica Folch, a famous trapeze artist, was rehearsing for a big show the next day. While being hoisted 80 feet in the air, all of a sudden, the harness she was wearing malfunctioned and she began to plummet to the ground, certain she would die. Because the safety contraption attached was like a giant rubber band, Maica, who stayed calm and collected despite the imminent threat of death, ended up bouncing off the ground, receiving only bruises. She managed to steady herself by grabbing a rope during her ascent. One would think that a trapeze artist who routinely puts herself at risk would be angry. She did almost die – and the crew and safety harness designers failed to ensure her safety. What was her response? “When something goes wrong, there is no one to blame. I love what I do, I love doing it with you, and it’s because I trust you. We don’t live in a perfect world.”

The fact is that, as Maica Folch said, we don’t live in a perfect world. It is hard to expect total perfection, 100% of the time from ourselves and our teammates. Mistakes get made. The key is how those mistakes are handled – and the reactions to those mistakes that determines whether a team is really a team – or just looks like one. Of course, you don’t want someone on your team who constantly fails to pull their weight, and never really acts as a member of the team. However, if they are a trusted team member that constantly makes their numbers, has your back and just makes the odd mistake, surely they are worthy of your support?

Feb
7

Loyalty: It’s Not ALL About Millennials

By Mike Gorun  //  Uncategorized  //  No Comments

A recent McKinsey podcast shared that when it comes to loyalty programs, a large part of the population is being ignored: elderly customers.

The podcast featured Jaana Remes, partner of the McKinsey Global Institute, and coauthor of the report “Urban World: The global customers to watch.”  According to Remes, the elderly population will grow by more than one-third in the next 15 years, totaling about 222 million people, and account for approximately 51 percent of urban consumption growth, which is equivalent to more than $4 trillion.

That’s a pretty large base of consumers with some hefty spending power that many fail to market to.

According to the McKinsey podcast, the elderly consumer (60+ years) has some attributes that Millennials don’t have and that are very attractive to retailers.

  1. They were raised in a time of loyalty. This is the demographic that would shop someplace because of a great customer experience, they like doing business there and have developed a relationship with the company. Millennials, on the other hand, have more fragile loyalty ties to businesses and will defect much more quickly.
  1. The elderly generation has much more financial stability and, in many cases, has the credit and disposable income to make large purchases very easily should they desire to. Millennials are more likely to make less money, be saddled with student loans and have less disposable income.

All generations have buying power but simply make decisions in different ways.

Jan
31

Should Your Goal Be Less Effort?

By Mike Gorun  //  Uncategorized  //  No Comments

In the world of customer experience, retention and loyalty, a lot of focus is placed on customer satisfaction. The general thought process is that the better the customer experience on a consistent basis, the more likely a customer is to continue to do business and remain loyal.

However, according to an article on Business2Community, the authors of “The Effortless Experience” reveal in their book that customer satisfaction does not necessarily translate to customer loyalty. In fact, they found the same level of interest in returning for repeat business in both customers whose expectations were exceeded, and customers whose expectations were simply met.

If exceeding customer expectations makes no impact on a customer in terms of loyalty, then why do we try? Well, the authors don’t state that businesses should NOT provide a great customer experience and fail to go above and beyond when the opportunity arises. Rather, they suggest that this does not necessarily impact whether a customer remains loyal.

Customer loyalty is a fickle thing and all it can take sometimes is a really good loss-leader coupon from a competitor to conquest a loyal customer away from your dealership.

In their book the authors suggest that it’s not the degree of customer experience that influences loyalty the most, but just how easy the business makes the experience for the customer. Consider businesses such as Amazon. Look at how easy they make it to shop with them – one click transactions, same day delivery, ordering by voice command – the list goes on.

All too often, businesses make it difficult for customers to do business with them. The harder it is, the more likely the customer will go elsewhere. Consider analyzing your current processes to reduce as much friction as possible and make the car buying and vehicle service process easier for customers.

Sure, there are processes in buying a car that take some time – such as the finance office. But there are also technologies that reduce that time and make it easier for a customer. The same goes for the service department.

Any decrease in the effort required by your customers will improve their experiences — simply because they can conduct business with greater ease – and that will translate into real customer loyalty, repeat business and word-of-mouth recommendations. And that is a great thing.

Jan
17

How Is Your Business Making a Difference? Your Customers Want to Know.

By Mike Gorun  //  Uncategorized  //  No Comments

Dealerships are well known for their involvement and participation with local communities and many different charities. From sponsoring little league teams, to larger charity initiatives, dealerships have supported and given back to the communities they serve for a very long time.

Cause-based efforts have become increasingly important to consumers, especially to the younger consumers now joining the spending force. For example, General Mills’ “Box Tops for Education” initiative. Founded in 1996, the brand has raised over $719 million nationwide. Of course, the schools themselves aren’t out buying all of these products, the consumers are.

While it is certainly distasteful to always “toot your horn” about how great and charitable your dealership is, there is a right way to do it. Consumers DO want to know what you are doing to give back, it is important to them. Just how important is cause-based marketing to consumers? Let’s look at some statistics from CauseGood,

  1. When choosing between two brands of equal quality and price, 90 percent of U.S. shoppers are likely to switch to a cause branded product.
  1. 97 percent of marketing executives believe cause-based marketing is a valid business strategy.
  1. When quality and price is equivalent, social purpose is the number one deciding factor for shoppers globally.
  1. 42 percent of North American shoppers would pay extra for products and services from companies committed to positive social and environmental impact.
  1. 64 percent of shoppers say simply giving money away isn’t enough; they want businesses to integrate social impact into their business models.
  1. 88 percent of Americans want to hear about businesses’ social responsibility and the most preferred place to hear about these efforts is on the product’s packaging or label.

Feel free to browse all of the statistics. The fact is that our younger generations increasingly seek to do business with companies that support causes. Of course, it’s difficult for companies to market those efforts. In fact, 70 percent of Americans find companies’ communications about their social responsibility efforts confusing.

So how are you supposed to communicate your charitable and community support efforts to your customers?

Whatever cause your choose, be it perhaps supporting and pledging to donate a percentage of sales and/or service revenue to a valued cause, it is not enough to just simply do it. As stated on the statistics from CauseGood, 88 percent of consumers want to hear about these efforts.

Integrate your charitable cause message into all your marketing efforts including in-store signage and in the service drive. It should be tastefully done and the point is to make it widely known that your dealership supports the cause.

In the end, once it becomes common knowledge within your community, and consumers learn about it through all of your marketing channels, they may well start choosing you over your competition. All while you are make a difference in your community. And that’s a great way to differentiate your dealership from the competition and earn customer loyalty.







MediaTrac In The News

Archives

  • collapse2017
  • expand2016
  • expand2015
  • expand2014
  • expand2013
  • expand2012
  • expand2011