How To Attract & Sell The Millennial Car Buyer (PART 13)
TRANSCRIPT: Digital marketing is important, but you shouldn’t wait for the connected customer to come to you. Database marketing, equity mining, and selling in the service drive. These are critical components today. When you do these things right, you can catch your customers before they catch new car fever, before they look at 24 sources of information, before they spend 19 hours online.
Now when we talk about database marketing or equity marketing or equity mining, we really need a paradigm shift here in automotive. I’ve got dealers who have absolutely destroyed their database because they followed the processes that some equity mining company told them to follow and it destroyed them.
Here’s our paradigm shift that we need. Currently most dealers look at this as a way to squeeze out some deals. No, don’t get me wrong. There are some great equity mining partners out there. I’m not talking about all of them, but talking about one or two that have destroyed dealer’s databases for years, probably a couple years before they can start working their database again.
Currently most dealers look at this as a way to squeeze out some deals. We’re going to do the equity mining because we’re going to squeeze out some deals.” Your database is the goose that laid the golden egg. If you know that parable, you know that what happened was is the farmer wanted to get all the golden eggs at once, so he cut the head off the goose and he looked inside, there were no golden eggs. See, it’s too late for some dealers.
Your goal with your database and your equity mining should be to create loyal customers for life, not to squeeze out some deals. You got to ask yourself, are we looking to squeeze out some deals, or are we trying to create loyal customers for life?
When we talk about squeezing out some deals, there’s some good things. You get immediate gains. This is nice, but your efforts are usually desperate, your impact is usually short term, and you eventually exhaust your database and you would alienate many customers.
I know customers who were loyal customers, and we’re going to look at one that left a dealership because he got too many emails, but customers who were loyal who told the dealership, “If you ever call here again, I’m calling the police. This is harassment.” Because they’ve said no so many times to your equity offers and they’re tired of your team calling them. Why would you do that to your customer base? We’ve got to create customers for life.
When our goal is creating loyal customers for life, believe it or not, when you follow the right processes, you still get immediate gains, but because your efforts are purposeful and highly targeted and sane, you can use the strategy forever because it’s sustainable and it’s actually appreciated by your database.
As we learn from the Customer Experience webcast, which was a couple months ago and it’s online, it costs six to seven times more to acquire a new customer than to keep an existing one. When you destroy your database, you’re left with prospecting new business, and this is expensive. Instead of database marketing, let’s call it database loyalty management. Right? Instead of equity mining, let’s call it database loyalty management.
Here’s how you keep from creating the 18-email former customer who we’re going to talk about in a second. You assign one owner in your dealership for all database efforts. Sales and service, just one person in charge of all. They have to approve everything, every marketing message. I’m not talking about a service advisor calling a customer to tell them their car is ready, but certainly if the service team wants to reach out to a customer and offer them an oil change, your one owner for your entire database needs to control everything.
Why should you do that? Let me tell you about the most extreme example I’ve ever heard, but it’s a true story. This is the 18-email former customer. Okay? Here’s what happened to this customer. This customer over the course of one month got 5 emails form the Internet sales manager. See, there were 5 Mondays in that month, and every Monday the Internet sales manager blasted the entire database, including the service database which is where this guy was in. He never had submitted an Internet lead, but he still got blasted with that.
The general sales manager was pretty good with Internet marketing and would send out a marketing message near the 15th and a marketing message near the end of the month to try to drive business for the dealership. He sent 2 emails. We got 5 emails that came from the Internet sales manager, 1 every Monday, 2 emails from the general sales manager.
This dealership didn’t realize they still had 2 service vendors instead of one who were sending out service reminders and other marketing. One of the service vendors sent out 4 emails, 1 a week, like 1 every Friday for 4 Fridays. The other one sent out 1 at the beginning of the month, one in the middle of the month, so they sent 2 emails. We got 6 from the service.
They had a newsletter company that was sending out a worthless newsletter that nobody was reading, that’s 1, and their ad agency was creating a very pretty email that was never read because it was full of images and they were sending that out 4 times a month. 5 emails from the Internet sales manager, 2 from the GSM, 6 from service vendors, 1 newsletter and 4 ad agency emails in 1 month.
This customer printed them all out and mailed them to the owner with a letter saying, “This is why I will never do business with you again.” This guy was a loyal customer who bought a couple of vehicles there and who was servicing all of his vehicles there, and he stopped doing business with them because he got 18 emails in one month. This is destroying your database. It needs to be database loyalty management. Now I understand this is an extreme example, of course.
Answer for me rhetorically because we got a 30-second delay, how many emails is too many in 1 month? I’ll tell you how many. Every email that does not provide value to the customer is 1 too many. Look at your emails, the person you assign to do all this equity mining and that you put in charge of your loyalty management program, make sure that there’s a customer WIIFM, what’s in it for me. How many emails is too many in 1 month? Certainly 18 is, but every email that does not provide value to the customer is 1 too many.
Here’s some other considerations for your database loyalty management. First, look at your capacity to provide a great experience. If I’m calling my database and I’m saying I’ve got a buyer and an immediate need. By the way, on SteveStauning.com you can look for owner marketing process and you can get all those talk tracks. I’m calling someone in my database and I’m saying I’ve got a buyer and an immediate need for your vehicle.
I’m only going to make those calls on Monday through Thursday because I’m only setting appointments for today or tomorrow. I don’t need to set more appointments for Saturday if I’m a typical dealer. I’m going to make sure my sales efforts are Monday through Thursday only. I’m going to call my database and I’m going to tell them I’ve got a buyer and an immediate need for their vehicle, and then I’m going to try to set trade appraisals for tonight or tomorrow.
That means I’m only setting appointments for Monday through Friday. I’m not allowing any Saturday appointments.
For service, we talked about this, what if you sent out 30,000 text messages for a free oil change or a low price oil change and just 1% took you up on that? You’d be 300 extra oil changes today. It would be a terrible experience for those people who arrive for their oil change. Right? We’ve got to make sure that we have the capacity to provide a great experience.
Now generally by the way, this is a phone, text, or direct mail focus when you’re talking about database loyalty management. Emails are fine, but they’re not a panacea. They aren’t a cure-all and they’re not free. Okay? In this case, emails cost us because we thought they were free and we sent out way too many.
Other considerations. You want to make sure you segment your database, but don’t overwhelm them or spam. When I’m trying to market to my service customers, I’m going to market to the people who let’s say last service was 120 to 150 days ago, and then I’m going to market to them once every quarter after that, not once a month, once every quarter.
The “We need your car” messaging that my sales team is doing, I’m going to do that once every 6 months, and they’re going to be authentic, targeted offers only when I do the we need your vehicle, I’ve got a buyer and an immediate need for your vehicle. I’m not going to call the same person month after month if they’ve told me no.
If they’ve told me no, I’m going to say, “Great, Mr. Jones. I understand. Hey listen, in the future if I get another buyer and I have an immediate need for a Taurus configured as yours is, would you mind if I called you up and made you an offer?” What’s he going to say, “Leave me and my family alone”? As long as you’ve been respectful, he’ll say, “That’s fine, yeah. Go ahead, call me.” Then 6 months from now my CRM will tell me to call him again.
Finally, don’t wait for your customers loyalty to be tested. This is a mistake that some dealers do who don’t do equity mining. AutoAlert teaches us that 49% of people don’t know they can upgrade before their loan or lease expiration. That’s half. Half people don’t know that they could upgrade until their lease or loan is over. 63% of people would like to upgrade very 3 years or less, so we’ve got to call them, we’ve got to tell them we’ve got a buyer and an immediate need for their vehicle. Right? We got to tell them that we’ve got a lease pull through, that we can pull ahead on their lease, that we can get them in 6 months early.
By the way, Accenture tells us that 85% of customers want companies to do a better job of recognizing and rewarding them. That’s what loyalty management is all about. As we learned in the customer experience, the video that you’re going to watch online, that was a video that we did, one of the live Undeniable Advantages that we did, connected customers like loyalty programs when they’re done right. 69% of millennials say they belong to a loyalty program, and 70% of those millennials say they’re happy with the loyalty programs, but they must be simple, transparent, and worthwhile.
We’re not going to go into everything we did on the customer experience, but you’ve got to ask yourself, are my loyalty programs, my oil change program, whatever it is, is it simple, easy to understand, is it transparent, nothing hidden, people understand what they’re getting, and is it worthwhile, or do I get a free oil change for every 100? Right? Then it’s not worthwhile. Go back and look at your loyalty programs and scrap them if they’re not simple, transparent and worthwhile.