Driving Customer Loyalty at Car Dealerships – BrandingWire 3

The BrandingWire team takes on car dealerships this month. And what we’ve uncovered is straight out of Jurassic Park.

Car dealers seem to have been frozen and preserved for all time, as if trapped in amber.

Cars Change, Why Don’t Dealers? It’s ironic that new car models come out each year, but aside from an interior refresh, dealers don’t seem to change much – if at all.

The end result? As this image details, we found a lot of angst attached to the car-buying experience. Quite frankly, for many consumers, it sucks to buy a car.

When I was a kid going to a car dealership was an event -- complete with the colorful, plastic flag garland festooning the lot. Once I started buying cars, it was a whole different story.

It’s been awhile since I purchased a car (cheap practical Midwesterner and all). But the car dealership business model needs to change before a dealer’s brand can truly be repositioned.

A McKinsey study shows that dealers are more successful when paying attention to talent management, customer loyalty and planning. With that beam of hope lighting our way, here are some quick ideas to make the car buying experience better for the customer and, over the long term, the dealer.

Focus on Post-Sale: It costs more to get a new customer than it does to keep an existing customer. Yet many dealers disappear after the purchase.

There are endless opportunities to engage the customer with friendly tips, maintenance reminders and even milestone’s like the car’s “birthday.” Well-informed follow up is even more valuable when delivered via a customer’s preferred mode of communication.

A dealer could invest his annual giant inflatable budget into a simple CRM package that allows him to do more than send a letter when a lease is up or a factory recall is issued.

Segmentation: A shiny new CRM package (with undercoating of course) allows a dealer to take different approaches to a customer based on where they are in a lifecycle – higher-end models for older customers, safe, roomy cars for new parents and cool affordable rides for college grads. Dealers doing this strategically will have the customer, their friends and family coming to the dealership.

Create Good Great Will: One car dealers can erase the angst for them is to get involved in new and unexpected ways. In addition to sponsoring a little league team, designate a few cars for rotation across several local non-profits, complete with digital camera. This gives the non-profit a helpful resource, albeit temporary, and an opportunity to tell their story in a new way.

Car Blog: I know it’s shocking that I’m suggesting a dealer blog. But consider how much time a customer spends online before hitting a lot. Combine that with all of the knowledge sitting in a dealership that is never tapped into.

If I knew my Ford dealer had an informed opinion about new models and his staff had tips on better performance, maintenance and troubleshooting, I’d subscribe to the feed during the selection process and after purchase. Consider how all of this info, with plenty of images, might be of use to customers.

Auto Mall or Shopping Mall? The built environment at a dealership is pretty straightforward. There are many opportunities to stand out, but creating local relevance makes the most sense. A themed environment might become dated over time, but no one would forget which showroom they were in and they would not mind spending more time there.

Ad Age shows us how much car shopping has changed with online auto shopping and information sites like Vehix.com. The site is extending its content beyond its web site to cable TV and mobile phones.

"[Vehix.com] is going to change the whole dynamics of how dealers do business and how they treat customers."

For one web site to pull this off it will have to do more than extend its content to other platforms. It will have to be in production with Steven Spielberg.

Get more high-voltage ideas at BrandingWire. And be sure to check out the BrandingWire team’s individual blogs: Olivier Blanchard, Becky Carroll, Derrick Daye, Lewis Green, Ann Handley, Gavin Heaton, Martin Jelsema, Valeria Maltoni, Drew McLellan, Patrick Schaber, and Steve Woodruff.

car and crossbones uploaded by aythya_novaeseelandiae
tags | marketing | BrandingWire | branding | brand

Comments

[Steve Woodruff]

Good stuff! A car dealer blog that was intelligent and informative would go a long way towards dispelling the notion that that particular dealer was just another typical retail outlet looking for the next transaction. And how easy it would be to set one up!

[Valeria Maltoni]

Kevin:

A lot of solid advice here. I think most dealers do stay in touch with mailers and surveys; the intent is good, the execution is poor. Mass marketing anything these days makes less sense especially when there are opportunities to be personal.

Also, they give up just before you decide on your next purchase. Have you noticed how over time the mailers are less frequent and useful? That's when as a customer I might be considering a new car -- not on your time line, dealer, which might be too short for my budget, on mine.

[Patrick Schaber]

Hey Kevin,
Great thoughts...I like the emphasis on post-sale. There seems to be alot of untapped potential there.

[Kevin Dugan]

Thanks everyone! Valeria - you are spot on about the communication dwindling the closer you come to needing another car. Coincidence? I think not!

Post-sale and online would seem to be two HUGE opportunties with untapped potential for dealers. We need a Jeff Jarvis to sound the alarm on this industry so more change occurs.

[simplykyle]

I loved this article! And I hope it gets around to the PR people in the automobile industry.

[Eric Miltsch]

Spot on comments about the urgent need for change within the car industry. Customers & buyers have been asking for changes for a long time.

We're taking on those dinosaurs with industry leading changes. The attention given to features in our CRM and our BDC has led to nearly half of our business being referral driven. Other differences like our monthly eNewsletter & online auctions help too.

Our community involvement is high priority as we look to support the communities we live and work in as well.

Launching our own blog was a no-brainer - the additional traffic and branding helped tremendously.

Even Spielberg would enjoy himself here...

[Nicole Vickers]

Car dealers should also change their marketing strategies based on the market trend and the preferences of their customers. Since social media is now an internet trend, why not use that as another communication medium between them and the public?

[Delsie Maidens]

You're right. Through the power of the Internet, car dealers can easily update customers with news about their vehicles and vehicle upgrades. Updated PR methods will also convince them better than old-school techniques.

[Chris]

Great article! In traditional marketing practices the chain of communication has to be maintained to be effective. The problem with this approach to marketing is that the communication is in one direction only with very limited dialog between the dealer, prospect or customer... not to mention expensive! In today's social climate it's in the dealer's best interest to establish a solid brand or image through Facebook, blog, mobile app or other online entity. The next generation of car buyers is totally online and conventional marketing methods will fall short in reaching them. The car buying conversation is taking place online and the dealers need to be in it.

[mark]

car dealership is quite interesting yet it needs a lot of skills to be effective. howevery, internet users can now grab offers and upgrades in just a few clicks which makes this modern world a lot better than decades ago.

[Sean Carter]

This is a very needed and helpful post! I had been very tired of the people I had to deal with at many places I was looking at cars in. They didn't see to be looking out for my needs. After I really did some research I found a car dealership in Texas that was wonderful and helped me find the right car for me.

[Andy Sandleman]

Great article you have. im planning to deal cars but im not quite sure if i have the capability on dealing these things. Any suggestion?

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[Charlie - Breakdown Assistance]

I think the issue is that car dealers don't change because their current method of sales is the only way they can sell. Gradual commitment is there forte! And you have two types of car sales people; 1) the salesman who just want to sell you a car even if he has to lie to you, 2) the salesman who genuinely cares about finding the right car for you whilst trying to secure a sale. However, it is very difficult to tell the difference between the two types nowadays...

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[Brendon Ross]

Couldn't agree more with your points. I work for a dealership and these are some of the things we have been trying to implement to become one of the best. The dealership model is somewhat of a monopoly model because customers have no other choice if they want to buy new than go to a dealership so in the minds of the dealer owners, why change? This is something that needs to change though. If dealers implement some of the tips mentioned they will get more customers than competition, shredding the old school model.

Very thought provoking post.

Cheers
Brendon

[jimstout7878]

It is nice to see that they have some customer loyalty benefits in play here. I would really like to get a car from these guys one of these days. I just gotta keep saving my nickels and dimes.

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