Your Customers are Speaking To You.
Do You Hear Them?

Written for AutoSuccess Magazine
June 2002

By Scott Joseph

You are running a successful dealership. Upon what should you base your business decisions? Most dealers give a lot of credence to anecdotal evidence heard on the dealer grapevine. If a new promotion or event worked well at one dealership, it should work well at yours, right? Or, you could follow the “if it ain’t broken, don’t fix it” approach to marketing and advertising. After all, if people are still coming into your dealership and buying cars, why change anything at all?

Well, if you haven’t heard it before, I will tell you now. Your data should drive your business. The answers to a majority of your business questions can be found in your very own data files. They hold the answers to who you should mail to, when to mail, how often to mail, what type of promotions to run, how to advertise your offer, and what offers to make in the first place.

As long as you listen to the valuable advice your database gives you, you will be able to improve your profits while spending less. Smart, targeted marketing is the difference between dealerships that maintain and dealerships that flourish. Every aspect of your selling will improve when you start using your database as a reference point. You will be able to retain and resell the customers you have worked so hard for, increase your leads, track the trends in your business, and increase your closing percentage and average dollars per sale. All of this can come from a little research.

So where does all this information come from? You probably have valuable data lurking all over your dealership- in your service registrations, your telemarketing leads, the hits to your website, your complaint-handling system, and your sales database. All this cataloged information is extremely valuable, and it all needs to be gathered in one place, if possible, to make the best use of it. If you are new to the business and need to gather data, sponsor a contest in which visitors to your virtual or brick-and-mortar showroom register with you.

You also need to examine what information you are gathering. Every time you have contact with a customer or prospect, you have a golden opportunity to discover their desires, fears, wishes, priorities, and ideas about buying a car. This has been called drip irrigation dialogue- ask every contact one or two questions every time you are in touch with them. Make sure you are asking them the questions that you want to know the answers to. You will never know if you don’t ask, and you shouldn’t pass up any opportunity to gain information about your customers.

Discover how your customers buy. Do they finance, lease, or pay with cash? When do they buy? You may have one blowout event every year that gets a higher than normal response rate. What do they buy? The mix of new, used, and lease is different in every dealership. And, if your customers do tend to finance or lease, what is their payment? Your inventory has to be appropriate for your clientele. Fundamentally, people are creatures of habit. The trick is to discover those habits and develop your dealership around them.

And now, the most important advice I can give you- work with a clean database. If you can’t say without hesitation that you know your database is up-to-date and accurate - clean it up! Duplicates will give you false statistics, inflated projections, and, if you market to them, will be costly and harmful to your reputation. Incorrect data costs time, money, and possibly even customers, and cannot be used as reliable reference. Guaranteeing that your information is correct and error-free is the first step to success. If you don’t have the time, technology, or desire to muck out your database yourself, then hire an outside company to do it for you. It will be the best investment in your future you could make.

Now, you are working with a clean database and you have reliable information. Think of this data as reports from the field that you will use to plan your battle strategy.

First, you will need to differentiate your customers in three ways- by their needs, their habits, and their value to you. Some dealerships create elaborate tags that they can attach to a customer’s file that places them into different categories, and some dealerships simply rely on database searches to accomplish the same thing. However you choose to approach it, your goal is to be able to manipulate the information at hand and be able to sell to your customers in the way that they want to buy.

When looking at a customer’s needs, examine the way that they made their initial contact with you, and make that the primary method of communication for that customer. People who call for information should get more phone calls, people who respond to your website should receive more e-mails, etc. You will want to contact people in as many ways as possible- with e-mail, telephone, fax, in-person visits, and direct mailings, but you want to contact people primarily in the way that they are comfortable receiving the message.

By examining a person’s buying habits and their trends in purchasing, you can glean crucial information. If you notice that a customer always trades in their car in the early summer, call them now and ask what model they are looking for, and what options they would prefer. Or better yet, remind them of the options that they have now, and ask them if they want to keep these on their next vehicle.

When assessing the value of a customer, use the 80/20 rule. Discover what customers fall to your bottom 20%, and reduce your mail to them by half. Generally, these are customers who just cost you time and money. Similarly, discover your top 20% and increase your communications and mail to them by 50%. Essentially, we are dividing the database into three levels- the 20% at the top, the 20% at the bottom, and the 60% in the middle. We need to work on decreasing the marketing for the bottom level and increasing the marketing for the top level.

And here are a few easy ways to get started with your efforts to let your database decide the direction your business needs to take.

• Telemarketing efforts- Call your top fifty buyers and see how they are. Just stay in touch; don’t try to sell them anything unless they make specific requests.
• Print personalized messages on invoices, statements, and envelopes, and have their salesperson sign letters themselves.
• Advertise your service department to your sales customers, to train them to come back to you again and again. Then, track your crossover to determine what factors influenced the sales customers becoming service customers.
• Run special events such as “VIP days,” “closed door sales,” “limited pre-showings” to the customers who purchase the most from you.
  
  
  Next month: How to Attract Quality Traffic!
  
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