CarMax Group, which prides itself on its showroom customer handling, has tapped a database management and technology company to get more of its customers into its service departments.
Newgen Results Corp. of San Diego will contact CarMax customers immediately after a new- or used-vehicle purchase and throughout the ownership of the vehicle to remind customers of scheduled vehicle maintenance and to set up service appointments.
CarMax President Austin Ligon said CarMax has offered mechanical service to its retail customers for only three years. While the business has grown significantly over the past two years, there is much room for improvement, he said.
Ligon declined to say what percentage of CarMax customers who own out-of-warranty vehicles return to the dealership for service, but he said it is comparable to the rest of the industry.
'We'd like to move it to the higher end of the scale,' he said. 'The fall and winter is a good time to get started on a growth drive. We have the physical capacity.'
Ligon said he believes that the program will enhance customer loyalty and lead to CarMax selling more vehicles.
CarMax, which pioneered the big-box approach to auto retailing in 1993, has lost money every year. The company lost $23.5 million on sales of $1.27 billion at its new- and used-vehicle stores for its fiscal year that ended Feb. 28.
Ligon said he expects CarMax to end this fiscal year at the breakeven point or at a small loss. CarMax stock is trading at $2 to $3 a share.
Under the agreement, Newgen will contact CarMax customers by mail and by telephone if follow-up is necessary, to remind them that their vehicle needs service.
When customers come in, Newgen records the date of the visit, nature of the repair and vehicle mileage into its database. Based on this information and factory-recommended maintenance sche-dules, the computer schedules the customer's next service reminder.
CarMax has 32 used-car superstores and 19 new-car franchises. Newgen's program is in 14 CarMax superstores and will be in every store by year end.