As new vehicle sales profits become more difficult, it is important to increasingly turn your attention to growing your service business. Dealers are rightly interested in finding new service customers to replace lost customers. However, service conquest is very difficult because you must overcome three challenges: reaching current driver, determining service need, and unhooking customer from a current service relationship.
While there are many potential databases and approaches to locate service conquest prospects, each has limitations that need to be explored to prioritize their use and extract the most potential, as follows:
- Unaddressed Units in Operation. Review your current marketing program business rules to assure all known UIOs are being addressed. The customers most often overlooked include older or non-CPO used vehicles; appraised vehicles not won on trade; same brand sold used vehicles sold within the group; fleet sales; and retail parts customers. For most of these customers dealers have a recent contact and the consumers have done business with or expressed interest in doing business with the dealership. Furthermore, if actively managed from the beginning, service needs and timing can be predicted on equal footing with new vehicle sales.
- Re-engage “lost souls”. While not technically a conquest, lost souls represent a chance to grow the service base. Dealers usually know nearly as much about these customers as loyal customers, often including defection reasons. Most dealers assume lost souls are non-responsive to previous marketing, when in fact they may have been unaware or uninterested in the offer provided. Given today’s fragmented media, it could be the message was not seen or that the type of offer presented was not compelling. Before writing off these customers, vary the media, particularly by adding digital or social media and move from discount to convenience-based offers. If defection reasons are known, address early and directly before engaging in more marketing.
- SEM/PPC. Consumers responding to service-focused SEM/PPC ads are almost assuredly in market and open to new service relationships. Unlike new vehicle clicks, these are not service “tire kickers” and they are not wed to a particular service provider, or they would have googled them directly. So even when “loyal” customers are captured through SEM/PPC, they are cheaters-in-waiting. Because service SEM/PPC is the true battleground between independents and franchise dealers, clicks can be expensive, so each click most be carefully nurtured by ad copy closely tied to each search term and compelling landing site content closing linked to scheduling.
- CRM No Sales. While less is known about “No Sales” than active customers, it is known that many bought the same brand vehicle elsewhere and expressed an interest in doing business with the dealership. In addition, unlike other lists, the store already paid for the contact and knows the contact information quality based on previous dialogue. In addition, many of these contacts will include appraisal information which can serve as another conquest source. Some consumers may feel funny returning to a store they rejected, so welcome back messaging and offers will likely enhance results.
- Third Party Lists. There are several services which provide owner lists and contacts. Lists vary significantly in quality due to challenges in following title transfers, differences between owner and operator and frequent contact changes. Generally, lists are improving in quality, but few provide insights required to understand needs and media/message preferences. I encourage dealers to review any list against their own database to check quality and derive insights which may change communication approach – e.g. whether a 5-year old vehicle has had one owner or more. As a default use an approach that treats independents as the primary competition with messaging that promotes dealer services and addresses services typical for the vehicle cohort. While such lists often provide low response rates, selecting the right media and message produces a solid lifetime value ROI, particularly if care is taken to rekindle the relationship.
- Defectors. Among third-party lists are those which provide insights into consumers who defected to independent service providers, sometimes including which services were purchased. In aggregate, these provide valuable feedback on selling effectiveness, particularly for tires and other routine maintenance programs. Realizing value from individual records is more challenging because the immediate need was just serviced, and you must re-establish the relationship. Therefore, you may need to engage in a multi-step communication strategy, reminding the consumer of the dealer brand proposition while promoting additional service items, not covered by the most recent repair order.
There is no silver bullet for service conquesting. I recommend that dealers continuously invest in building their actionable database, realizing the limitations with each data source and devising a communication strategy that recognizes the needs of each segment.
Blog | DATE 10, 2019