Driven To Sell1 Oct, 2013 By: Doug McPherson Response
No doubt, getting consumers to part with five figures for new wheels is an uphill trek, but car dealers are navigating the incline just fine with new marketing techniques.
On a typical sunny Saturday in San Jose, Calif., something atypical is happening at the Courtesy Chevrolet dealership. For one thing, more prospects than usual are milling around — close to 100 folks. And they don’t look skittish, apprehensive or ready to duck at the first sight of a salesperson.
In fact, the people look kind of interested. It’s enough to make a car dealer drool.
It’s called a “service clinic” and it’s just one of many new ways dealerships are now getting prospects on their lots. The clinic is a way to use an auto dealership’s service department to reintroduce past customers back to the store. There are educational booths about new Chevy cars and trucks; about parts; and about trade-in appraisals. Heck, toss in some free food and drinks and you got yourself a shindig. There’s even a high-tech booth that includes a sleek video explaining the technology behind the plug-in Chevy Volt for any nerds in the crowd.
Russell Grant, vice president of sales at J&L Marketing, explains the rationale for the clinics. “Dealers were discussing with us the challenge they had with retention,” he says. “The average car out on the street is about 11-years-old, driven around by the second or even third owners. So what happens after the warranty expires? Visits to the dealer for service fall off a cliff. Dealers need that traffic, so we created service clinics to target owners who are inactive. The clinics are a huge solution for that problem.”
Of course, the operative term behind all this is “big data.” To Grant, big data is the fuel helping car dealers pinpoint prospects and give salespeople numbers well beyond their monthly quotas.
“A lot of car sales today are about how to leverage your data,” Grant says. “If you can leverage it, you can talk to the customer on a one-to-one level, and the more you can do that, the better chance you have of eliciting the kind of response you’re seeking. But the communication has to be precise to get that one-to-one feel … if it’s not precise, it’s not effective.”
The general manager of Courtesy Chevrolet, Troy Pelzl, is sold on service clinics. “It’s a great avenue to reintroduce your customers back to the dealership,” Pelzl says. “It went off flawlessly.”
Turbocharged Big Data
Grant says in the car sales game, there are three ways a dealer can advertise: traditional media, the Internet and direct marketing.
“Sure, you can buy more time on radio and TV, but consumers are on the Internet,” he contends. “You can advertise online, of course. Or you can improve your direct marketing strategy, and that’s exactly what many automotive leaders are doing.”
He says a recent poll of more than 900 dealer executives found that 60 percent are increasing their E-mail marketing budgets. “That’s because direct marketing response rates haven’t dropped in the past five years — in fact, they’ve risen,” Grant says.
And direct marketing is where big data can yield big results, Grant believes.
J&L has created its own data mining and lead generation product called “bLinked®,” which identifies customers who are in the best position to buy and targets them before they shop the Internet, where dealerships stand the greatest chance of losing their customers.
“As soon as a dealer’s customer starts searching cars on the Internet, they’ve basically lost that customer,” Grant says. “Ten years ago, customers visited 6.7 dealerships before they purchased a vehicle. Five years ago, they’d visit 4.3 dealerships before buying. Now they only visit 1.4 dealerships.”
Grant says the old sales method was to spend enough ad money on traditional media to drive customers to dealerships. The customers would come and kick the tires and get information from salespeople.
“Now the game is over when a prospect goes to the dealership — all the research is done on the Internet. That’s why one-to-one communication is so important, and bLinked can help,” he adds.
bLinked overlays a customer’s payment and financial information, monthly manufacturer incentives, the dealer’s current inventory and desired profit levels. bLinked algorithms generate a list matching customers who can get a new car similar — but newer — to what they’re driving now with no money down, and in many cases, lower monthly payments.
Then, each month, prospective buyers are sent highly targeted, multi-channel marketing communications — E-mails and direct mail — about their current vehicle, their monthly payment and the vehicles they can upgrade into. bLinked also uses individualized microsites that include a list of every vehicle prospects can afford, along with too-good-to-pass-up monthly payments. It’s all personalized and designed to heighten the sense of urgency.
“The marketing ends up so focused and targeted with a deal that matches their situation so perfectly that it’s really hard for them to say no,” Grant says. “It takes the uncertainty out of buying, so buyers know exactly what vehicles and payments they qualify for. And that makes them feel more at ease and puts them in a buying state of mind. Most importantly, it targets customers before they shop the Internet, so you don’t risk losing them.”
When it’s all said and done, Grant says the program is about helping dealers become “the trusted source of information” for their customers.
“Dealers need a system to reach and communicate with customers in a target-centric fashion — target them with information that’s in their best interest,” Grant says. “At the end of the day, you have to make it easier to respond.”
Savvy Social Speeds Sales
Quincy Armstrong, the marketing director for Rusnak Auto Group, which sells high-end autos in Pasadena, Calif., agrees with Grant and says marketing car dealerships has changed dramatically in just a few years.
Armstrong adds that dealerships are starting to realize that there’s more to marketing than print, broadcast media, and basic online search engine marketing and display campaigns.
“Dealerships that are ahead of the curve are producing content that customers really value, like inventory videos, how-to videos and informative blog posts,” Armstrong says. “Dealerships that are savvy with social media and that have strong business development centers or Internet teams will use this content to engage customers and differentiate their dealerships.”
One example is Mercedes-Benz. This summer, the German automaker backed its brand campaign with a social media contest to engage consumers with the 2014 Mercedes-Benz CLA Class, where five “Instagram influencers” got to take a five-day road trip in CLAs and document their journey by sharing photos and videos. The driver who gathered the most “likes” during the week won a three-year lease on a CLA.
Armstrong says Mercedes has spent a great deal of time researching the next generation of Mercedes drivers (Generation Y) and applied the findings throughout the campaign.
“The advertising speaks to a new generation of buyers. Dealerships have been taught how to adapt their shopping experience for Gen Y,” Armstrong says. “It’s refreshing to see a marketing campaign that’s truly customer focused.” ■
CarMD: DRTV Is an Rx for Sales
CarMD Corp., the company behind the hand-held car trouble diagnostic tool, has been a big fan of direct response over the years.
Recently, Response spoke with Kristin Brocoff , director of corporate communications at CarMD, to learn more about the company’s success with direct response.
Q: Why did CarMD opt for DRTV to market its product?
A: Since the inception of the CarMD program, we realized there would be a public awareness issue that needed to be addressed first. Without a successful public educational campaign, there could not be a successful CarMD program. Very few consumers realized that their vehicles have a computer inside, let alone that there are repair solutions available to help them resolve problems within their reach. So much more than just an automotive gadget, CarMD was offering car owners a complete solution system: to use a handheld device, computer, Internet and database — combined together to solve their car problems from home. While CarMD’s founding company, Innova Electronics Corp., had substantial relationships with most of the major retailers — such as O’Reilly Auto Parts, AutoZone, PepBoys, Sears, even Walmart and Costco, among others — the company knew that to ensure CarMD didn’t collect dust on the shelves, it needed to first establish awareness and create demand for a new category of products. From the get-go, the management and marketing teams at CarMD knew that it would be crucial to use DRTV to tell a visual story demonstrating the product’s ease of use, benefits and positive testimonials.
Q: What kind of success has DRTV given you?
A: Thanks in large part to a series of award-winning infomercial campaigns, in a very short period of time, CarMD has helped nearly 1 million drivers save time and money on their car maintenance and repair issues. Supported by a multi-faceted, multi-million dollar DR, online and public relations campaign, CarMD has earned brand recognition from coast to coast, evidenced by being a finalist in the PR Week brand award, competing neck-and-neck with IBM, Intel, McDonald’s and Starbucks as co-finalists. The DRTV campaign has also helped CarMD secure new retail accounts, co-branded partnerships and opened countless conversations for future business development. CarMD is also one of the longest running products on Home Shopping Network (HSN) to sustain a 4.0 or better customer pick rating — six years and counting.
Q: In what ways is DRTV suited to reach your target audience and who is your target audience?
A: Today, there are more than 220 million vehicles on the road that can benefit from CarMD. Our target audience is literally anyone who owns a car, truck, SUV, minivan or hybrid vehicle. Some of the main reasons people buy our product are: to avoid getting a lemon; to estimate check engine repairs so they aren’t overcharged at the repair shop; to catch hidden safety problems before they result in expensive repairs; and simply for peace of mind. DRTV allows us to reach these consumers and demonstrate how easy our product is to use. It also allows CarMD to air real-life stories and testimonials from our customers, who can often tell CarMD’s story better than even we can.
Q: How are you marketing CarMD online?
A: Over the past few months, CarMD has taken a hiatus to restructure our company and bring aboard some new team members to take our company to the next level with new products, partnerships and software solutions sales programs. In the past, we’ve found social marketing, YouTube, affiliate marketing programs and advertorials to all be effective supplements to a solid DRTV campaign. We’ll continue to employ any and all available digital media means to help CarMD be successful in the future.
Q: What other facets of marketing are working well for CarMD?
A: As anyone in the DRTV industry can attest, it takes much trial, error and finesse to create a successful television infomercial — and even more muscle to sustain its success. Over the past several years, CarMD has had much success using DRTV to establish our brand, educate consumers and sell the now popular CarMD® Vehicle Health System™ product. From time to time, we’ve had challenges with getting offers and continuity just right. And despite well-planned forecasting, we have had those occasions where we sold out of inventory and had to pull back on an in-motion campaign. But each time we meet new industry players we learn and grow.