Monthly Archives: June 2012

Car Buyers Who Only Consider Your Deals

One of the most biggest challenges dealers face, is the high concentration of competitors in their market.  If a dealer is to win a customers’ business, it is a combination of hard work, advertising investments, discounting, along with a little luck.  Consumers have choices, and they know it.  They also have this great thing called the Internet, which allows them with a few clicks to see every vehicle in a 200-mile radius they might consider for their next purchase.

Wouldn’t it be great if they only shopped your store, or considered your deals?

Of course that happens sometimes, with very loyal customers where the dealer has done a great job of taking care of the customer, and constantly marketing to them.  However, this is the exception not the rule.  How can dealers find customers who may never shop any other store, or consider any other deals?  The answer can be easy, and it’s resting quietly in your CRM.

With this clue, many dealers reading this article may already have answered the riddle.  You simply comb your CRM and look for past customers and try to put together deals for them.  Perhaps there are customers who have positive equity in their vehicles, are not currently shopping for a vehicle, but if presented with the right enticing offer, might be ready for an upgrade.  OK, this makes perfect sense, but sounds like a lot of work.

I’m seeing a growing new segment in the market for systems that automatically do deep scans of the CRM, and dig-out customers that are ideal candidates for a vehicle upgrade.  They are generically called Equity Mining.  Using various 3rd party data sources, along with complex algorithms, they not only find customers who are in this position, but also put together specific deals you can present to your customers.  And when these deals are presented to these customers (who are not shopping for a vehicle), they tend to close without the customer ever shopping for alternatives.  Why?  Because the customer was not in the market in the first place.  They simply may not have realized that they qualified for such a great deal, and once presented all they need to do is say “Yes”.  And from the results I’ve heard from dealers using these Equity Solutions, they say “Yes” quite often.

These systems seem to me like they can print money, especially in the first few months where your CRM is chock-full of potential deals.  After that, they provide a steady stream of new deals, all from non-shopping customers, and all at attractive grosses.  But I’m leaving a very important part out…of course you’re also getting a great trade-in vehicle (at a time of challenging vehicle supply).  In addition, if they were a service customer of yours, it is a vehicle you’re already familiar with since you’ve been maintaining it for them!

If you’ve not considered these types of solutions, you definitely should.  We’ve all got access to tons of data, but it is sometimes hard to sift through to find the answers.  Equity Mining finds the chunks of gold in all of that data, and creates new market opportunities for your store.

Happy Digging!

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Outrun the Bear

Likely you’ve heard this old joke: Two campers walking through the forest encounter a grizzly bear, who rears up and lets out a terrifying roar.  Both campers are frozen in their tracks.  The first camper whispers, “I’m sure glad I wore my running shoes today.”  “It doesn’t matter what kind of shoes you’re wearing, you’re not gonna outrun that bear,” replies the second.  “I don’t have to outrun the bear, I just have to outrun YOU!” he answers.

For many dealers in competitive markets, their approach to Online Reputation Management (ORM) should keep this old joke in mind, since knowing where your competitors rank is critically important.  That is not to say our only goals is to make sure we only have a few more reviews, and one-star more than their ranking.  The goal should be to capture as many positive reviews as possible from customers doing any and all transactions with your store.  Not only people buying vehicles, but also people in your service, parts, or body shop.  Ideally you have a system that allows you to intercept negative reviews before they ever make it online, to keep your ratings as high as possible.

To quickly review a basic approach to ORM:  Customers who have a positive experience with your dealership will most likely just smile and drive away, and never leave you a positive review online.  Why?  Think about your own behavior.  Most of us only leave reviews when we experience poor service, and want to vent to the rest of the world.  If you leave ORM up to nature, unless your staff never, ever disappoints a picky customer, you will likely have more negative reviews vs. positive reviews.  Getting a strong online reputation requires proactive work.  You must both encourage, facilitate, and follow-up to make sure your happy customers share their great experiences.

There are many great-published approaches to get this done.  My vote goes to the approach that gets you the best results, which means you must have a solid solution to measuring how you’re doing.  You set an initial benchmark where you start, determine how often you ask for a review vs. how often you get one, and then measure how your ranking evolves over time.  It would be great if there were only one review site, but of course there is Google, Yelp, FourSquare, DealerRater, and many more.  Depending on which site is most relevant on Page 1 of your local search results (which changes daily), you need to balance the number of reviews you’re getting from each site.

When potential customers find your store online, they will likely find it listed along with your top competitors.  So your goal should be to constantly monitor how you’re competitors are doing with online reviews, and make sure you are consistently beating them on each of the specific review sites.  This way, “outrunning the bear” doesn’t become the goal, as much as “outrunning your competitors”.

Online Reputation Management is not overly complicated; in fact in principle it is very simple.  However, the amount of activity you need to generate, and the high level of required monitoring can get pretty cumbersome.  You can easily hire one or two people to encourage customers to give you reviews, respond to published reviews, and to monitor how your ratings compare to your top competitors.  There are also great software solutions out there that can automate this process.  Whichever path you choose, just make sure your strategy includes closely monitoring how well your competitors are doing, to make sure potential customers continue to choose your store.

Don’t ignore your online reputation, since I can guarantee your top competitors are putting plans into action.  Get started today, and let me know if I can help with more ideas.  Got your running shoes on?