Auto Dealer Today - Q2 Issue
June 01, 2018
Maximizing fixed ops revenue and profitability requires dealers to take a hard look at how your valuable customer data is collected and leveraged. Learn how actionable data, predictive analytics, and marketing automation are changing the game for service departments nationwide.
May 2018, Auto Dealer Today – Feature
At many dealerships, service marketing consists of oil change coupons, service reminders, seasonal, and service promotions. Mail and email are the predominant channels used, and the segmentation of lists — if there’s any at all — is rudimentary.
Yet service revenue comprises nearly half of all dealership profits. Doesn’t service marketing warrant the same level of effort — or even greater — as the marketing efforts for your sales department?
Increasing service revenue requires a shift in mindset. Relying on the same old marketing tactics will not produce significantly better results. If you want to take your service marketing to another level, your service promotion campaigns must be replaced with relevant messages. Your “fire-and-forget” methodology must be replaced with an integrated, digital-first strategy designed to reach more eyeballs and increase response rates.
A successful service marketing strategy includes three components:
1. Actionable Customer Data
Your customer data is the foundation for connecting with your customers. Unfortunately, just 65% of the contacts in an average dealership’s DMS contain complete, actionable email addresses (before any appending efforts).
This is not surprising, since service personnel are not paid to collect email addresses; they are paid to complete jobs.
Customer data can be used for more than just email and mail campaigns. Every interaction with your brand can be captured and used to create highly targeted customer experiences that drive brand loyalty. Email appending services can increase the contact information percentage somewhat, but the stakes are too high to ignore 20% to 30% of your customers.
Create a purpose-driven process and incentive that motivates your staff to collect customer contact information. One solution might be to create an email capture opportunity report and set it up in your DMS or reporting dashboard. Out of the last 2,000 repair orders closed, what percentage had a complete email address? Set a benchmark of where you are now and a benchmark for where you’d like to be. It’s not unreasonable to expect a 90%-plus email collection rate.
At the end of every month, break out the email capture rate for each service advisor. Make it competitive and offer extra incentives, such as a dollar for every email address. An outsourced service BDC is also a great solution for increasing email capture rates.
2. Predictive Analytics
Right now, there are literally piles of money sitting in your DMS, in the form of customers who currently need service. To identify these opportunities requires more than search queries and segmentation. Marketing isn’t a guessing game. Messages and offers must be highly targeted and personalized to each customer based on a number of variables.
This requires a predictive analytics tool. Leveraging online behavior with predictive analytics is perhaps the most underutilized and most effective way for you to expand service market share.
To create individualized messaging, literally hundreds of variables are built into a single search algorithm; everything from year and model to mileage and diesel vs. non-diesel. Information in your OEM data feeds, such as current incentives, can enrich these customer records so that your offers are even more targeted. Additionally, predictive analytics allows you to identify opportunities that are outside of your DMS from a variety of sources, including:
• Telematics: Many vehicles today perform self-diagnostics and send the information to the OEM, who then forwards it to the nearest dealership location appropriate for that vehicle’s needs. Is your service department equipped to handle these leads?
• Online behavior: Facebook and Google provide your dealership with very sophisticated tools that allow you to identify and connect with current and potential customers.
• Facebook: The world’s most popular social network is now able to match 80% or more of your DMS contacts with their customers, allowing you to advertise to your customers while they are on Facebook.
Additionally, you can glean a lot of valuable demographic information such as male vs. female, age and ZIP codes. This allows you to create lookalike audiences of potential new customers in your area that aren’t in your DMS.
Facebook also has access to Polk registration data, so queries can be made such as “People driving this model that live within a 10-mile radius.” Then, specific offers can be created for those people, and dropped right into their Facebook news feed. Google and YouTube have similar capabilities.
3. Marketing Automation
The final component of a successful marketing strategy is marketing automation. Once harnessed, your customer data can be used to connect with your customers as they move across devices and through their daily routines, at a time that is most convenient for your customers, not for your marketing department.
Getting your messages noticed requires placing them where your customers’ attention is focused. Your customers may claim they prefer to receive all their communications via email, but in reality, they are omnivores. They consume different messages on different channels at different times during the day.
Most marketers place significant importance on metrics such as the number of impressions. Banner ads, for example, may get thousands of impressions daily, but how many people actually pay attention to them?
With marketing automation, you can market to your customers on platforms where they spend the most time, while they are there. Messages must be tailored, relevant and designed to build stronger long-term relationships. Of course, achieving these objectives depends heavily on gathering and activating the right customer data.
I should point out that more traditional marketing methods, such as mail and email, still have a place in a comprehensive service marketing strategy. But limiting your marketing strategy to these traditional methods limits your ability to grow market share, increase customer retention and increase revenue.
If you’re ready to take your service marketing to another level, learn to collect and leverage your customer data with predictive analytics and marketing automation.
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