Dealer David Parkhill says he went from "shotgun" to "rifle" in how he communicates with customers.
By that he means taking a more targeted approach, reaching out personally to consumers who might be in the market for a new vehicle. He seeks out those who own the brands he sells, rather than "shooting it out there to Ford or other brands' owners," Parkhill says.
"Direct mailing is nothing new, but the message we're sending is resonating better than it was a couple of years ago," says Parkhill, whose two Champaign, Ill., dealerships sell Chevrolet, Cadillac, Mercedes-Benz and Volvo.
- About three-quarters of customers say they were never contacted by their dealership or manufacturer when they were actively looking for or considering buying a new vehicle.
- Almost a fifth of customers say they never heard from their dealership immediately after their purchase.
- The longer car buyers went without contact from their dealership, the more dissatisfied they became and the less likely they were to buy again from the store.
Finding that resonance is critical for dealerships, but many are missing the opportunity. In a Maritz Research survey, about three-fourths of customers said they were never contacted by their dealer or manufacturer when they were actively looking or thinking of buying a new vehicle. Nearly 20 percent of customers said they never heard from a dealer immediately after buying a car.
That doesn't necessarily mean the customers weren't contacted. One problem, experts say, is that dealerships rely on computer systems to spit out form letters or e-mails that may not resonate or even register with customers. Those correspondences might get only a cursory look before ending up in the trash, diminishing the returns dealers get from their computer-driven customer relations management systems.
"It's a bit of a wake-up call to dealers that the CRM system you're using ... it's not resonating," says Chris Travell, Maritz's vice president of strategic consulting, in suburban Detroit.
Some dealers are tweaking their approach to communications to improve results.
At Motorwerks Mini in Bloomington, Minn., the CRM software generates a daily list of which customers to contact and why. But after that, the process gets personal.
Saleswoman Gretchen Telloch says she often has 65 or more calls or e-mails to make daily to customers for various reasons. "Maybe they just paid off their car, and that triggers us calling them to tell them they have equity," Telloch says. She also sends handwritten thank-you notes to any customer who takes a test drive.
"A lot of the customers, because it's such a process, become extremely friendly and personable," Telloch says.
Parkhill, who sells about 1,200 new and used vehicles a year at his stores -- Sullivan-Parkhill Automotive and Sullivan-Parkhill Imports -- changed his CRM vendor in May 2012 to try to get more existing customers to trade up to a new vehicle.
The new system costs about $500 a month more than the old one, Parkhill says, but it does a better job of tracking customers' data and shopping habits. He now knows when a customer should be contacted and whether that person prefers e-mail, snail mail or phone calls.
Parkhill limits the contact to follow-up on a sale, an equity pitch, a purchase anniversary and an end-of-warranty notice. "If somebody's sending me too many e-mails, I am going to delete them all," says Parkhill.
Parkhill says he can now track his salespeople's outreach to customers and hold them more accountable. The results have been positive. A jump in repeat business has led to "an average of about 10 more new car sales a month," says Jacob Tucker, general sales manager for both of Parkhill's stores.
About 40 miles west in Clinton, Ill., dealer Scott Baum uses his service business to drive communications with customers on the sales side. In 2007, he started issuing a free AutoRewards Card to everyone who buys a car from his dealership, Baum Chevrolet-Buick, which sells 1,000 new and used vehicles a year. Customers get a 10 percent reward on their card for whatever they spend on service.
After four years, the card's balance can be applied toward the purchase of a new or used vehicle. The average amount redeemed is $320, Baum says.
Most importantly, Baum uses the cards to initiate dialogue with his customers. "The salesman will call them and say, 'Hey you've got $800 saved up. Come in and look at trading,'" Baum says.
This year through Jan. 20, half of Baum's new-vehicle sales included redeemed money, he says.If the customer doesn't want to trade at the end of the four years, the balance can transfer to someone else. Then, Baum says, "we get a new customer."