Effective data mining can help you sell more new cars, find quality used ones and drive both customer retention and CSI
More dealers are seeing the benefits of selling cars through the service drive
You’re a dealer. You’re witnessing more change in the way you do business today than at any time in the past. Your customers are armed to the teeth with information before they get to your showroom and with smaller margins, business in the front end is tough. At the same time you’re busy trying to keep your service department full and grow revenue through fixed ops, even though aftermarket shops have taken a good chunk of the business. Furthermore, trying to find good pre-owned vehicles and build your CPO program is proving especially difficult, given the shortage of quality, late model used cars and low financing rates on new vehicles. So what can you do?
London Honda, a dealership in London, Ont. has found a solution. Since 2008, the dealership has been targeting lead generation and sales via its service department and existing customer database. And it’s a strategy that’s clearly working.
ACTIVE APPROACH
Peter Park, London Honda’s lease retention manager, says it’s not really a case of reinventing the wheel, more of adapting it to better suit the surface it rides upon. Instead of taking the traditional approach and trying to contact sales prospects on the phone regarding a new vehicle, instead, the service department actively searches its database, looking for existing customers that might be in a good position to change vehicles.
The customers in question might be nearing the end of their lease, they might be in good equity with their existing vehicle, or perhaps they are driving a car or SUV that’s low mileage, well-maintained (since the service department has all previous R/O history) and in high demand in the used marketplace. Witness the marvel of big data.
Park says that by mining its database and targeting specific customers, London Honda has been able to double potential revenue, without having to rely on extensive marketing campaigns and prospecting strategies to lure in new clients. “Because we can book service appointments online, we have existing customers who are already scheduled for an oil change, tire rotation or other service. Based on the data we have available, we can ask if they might be looking to trade vehicles,” says Park.
Park says that in terms of a sales tactic the approach is effective because the dealership can provide customers with actual metrics that could lower their existing payment and/or match them with a suitable replacement vehicle. Using such a targeted approach with actual results is likely to increase the chance of a sale since, firstly, the customer isn’t actively in the market looking to buy and secondly, they’re less likely to have their guard up. Plus if they are already bringing their vehicle back for service work, there’s a good chance they’re doing so because they already like to do business with you.
DealerMine was a pioneer in using service customer data to boost revenue
MORE OPPORTUNITIES
Park says that in theory, the service department can use this strategy to double the number of opportunities for new business each day from three to six. Multiply that by business days in the month and you’ll potentially have 180 new opportunities — all from your existing customer database.
On the vendor side, the development and enhancement of data mining tools has also made the process easier and far more enticing. DealerMine, founded in 2001 by Bob Quirion, identified an opportunity to gather customer data and proactively reach out to those who were due for service appointments with targeted and relevant information over the phone via an outsourced BDC. Because the process was based on shop capacity and the message targeted, the result was a far better experience than customers trying to schedule appointments themselves, only to be placed on hold because service advisors were having to contend with multiple customers at once (often a result of poorly coordinated appointment scheduling).
Betty Donaghy, CEO of DealerMine’s U.S. operations, says that today, the growth in big data and the number of retention tools on the market means most dealers are doing a fairly effective job when it comes to intelligently managing their customer databases. That being said, it’s important for dealers to understand that the best software in the world isn’t any good unless it’s presented in an intuitive way. “If you can’t present it to different people doing different jobs within the dealership at the right time, it won’t be effective,” Donaghy says. “The software has to complement the workflow.”
DEDICATION REQUIRED
Donaghy says those dealerships that are really successful at mining their service database for new sales are the ones who have dedicated processes in place. “There is one dealer group we work with that has a dedicated sales team in the service drive. They have people who can handle sales and desk deals right there.” She says that when dealers are able to identify what processes work for their customers, they can be incredibly successful. “But you need to be dedicated to it,” she notes. “You can’t just jam a new system into your existing processes and expect it to work.”
Although the concept of selling cars through your service department is still fairly embryonic in Canada, it is expected to gain traction, simply because it can address many of the challenges facing today’s dealerships, from retaining service customers, to finding good quality used cars, as well as increasing consumer loyalty and satisfaction.
Brian Skutta, CEO of AutoAlert, which expanded into Canada earlier this year, says it’s important from a vendor perspective to understand the nuances of the market. “In Canada, compared with the U.S., we see a much stronger focus on fixed than variable ops when it comes to data mining and how that generates leads and sales.” He also says that higher levels of mobile usage in Canada means there’s also a focus on optimizing the mobile experience right from the service drive-through and that requires both the tools and staff to deliver on that process.
THE NEXT LEVEL
Sam Rizek, Director of Sales and Business Development for DealerSocket in Canada, says that more sophisticated mining tools can help stores take the concept of selling cars through service to the next level. A good example is DealerSocket’s RevenueRadar — a next generation data/equity mining tool unveiled in the U.S. last year and shortly being rolled out in Canada.
RevenueRadar is available as a standalone tool, or as a version that’s integrated with DealerSocket’s CRM.
And by integrated, Rizek says it’s just that. “The customer’s information, their whole profile, is right there. I can see the last time they came in for service, what work was done, what was declined, the last time I emailed them and the last time I talked with them.”
To identify which existing customers might make good sales prospects, RevenueRadar looks for 11 categories and if a customer meets one of the criteria it will signal an opportunity or “ping.” Rizek says that for the integrated version, staff can be in the CRM confirming sales or service appointments and as they go down the list, a “ping” beside the customer’s name will show them as a potential sales prospect.
Rizek says that RevenueRadar provides Word Tracks scripting software and necessary marketing material to ensure an effective response is drafted. “When it comes to the phone call, we don’t want to get too specific,” he says. “We can say we have a great opportunity to talk about but we can’t say we’ll knock $50 off their payment on a new vehicle at that point, because we might not know the true condition of their trade-in until they arrive at the dealership.”
For a sales manager, being able to look at the database and see a “pinged” service customer who is currently driving a vehicle with equity or is at the end of their lease term provides a great opportunity to engage them before they are actually in the market to buy. Rizek says that by doing so, the result can do wonders for CSI scores. “If I can engage them earlier, and they can make $1,000 on their trade and are now driving a new vehicle for $50 less a month than before, that can be a very powerful thing.”
