Auction Direct USA started using new customer-development software nine months ago to boost its service business.
Because of the software, the four-store used-car dealership group has about 200 new service customers, says Eric Miltsch, Internet director for Auction Direct USA near Rochester, N.Y.
"Anyone who buys a car from us gets a welcome e-mail that offers them a chance to sign up for the online garage," Miltsch says. About a quarter of those buyers sign up, and some of those are new service customers, he adds.
Miltsch is using a product by DriverSide Inc., a San Francisco technology company, called the Service Marketing Package. The software stores customers' vehicle information and sends customers service notices, coupons, newsletters and recall alerts.
What about dealers who didn't get a customer's e-mail address? No problem. The software can find it and will provide dealers with monthly data reports to track service trends.
"The benefit for us is the repeat traffic back to our site," Miltsch says. "The main goal is to drive service revenue. The next benefit is the deeper relationship."
In February, Auction Direct USA had 123 service transactions among all its locations -- two stores in New York, one in Florida and one in North Carolina, Miltsch says. That's up 25 percent since Miltsch started using the software. That service traffic boost is a result of people coming in from service notices or coupons, he says.
Miltsch met Kevin Root, DriverSide's senior vice president of product strategy, a year ago at the National Automobile Dealers Association convention.
Root, an enthusiastic techie, sold Miltsch on the software DriverSide was developing. DriverSide's Service Marketing Package competes with Cobalt Group's OnStation, an e-mail-based marketing tool; and General Motors' OnStar vehicle diagnostics system, which also uses e-mail. Root says DriverSide's software differs from Cobalt's and GM's systems in that it keeps customer vehicle data, service history, coupons and diagnostics in a central location. OnStation and OnStar don't have such setups, he says.
Root says another feature of DriverSide's software stands out: Dealers can offer some customers larger service discounts than others.
"We recognize with service marketing, one-size-fits-all does not work," he says. "That's old school. Why should a dealership offer the same incentive for a customer who comes in all the time versus one that hasn't come in for 18 months? We say offer that lost customer a bigger incentive to entice them back. Then let your service manager do their job."
Here's how the Service Marketing Package works: For a flat fee of about $900 a month, the software sorts customer data from the dealership's database. Customers are categorized as new, active, lost or inactive, Root says. The software sends e-mails to each customer, allowing the customer to create an online garage set to his or her vehicle's year, make, model and mileage. The customer also gets a monthly newsletter tailored for the dealership.
Particularly important for dealers is the monthly status report the software provides to track service trends.
"How many customers would we have had without this software? How'd we track them? We don't know," Miltsch says. "There wasn't a system in place to measure that, and that's why this has value, because it's allowing that measurement to happen."
DriverSide started selling the Service Marketing Package six months ago through Dealer.com. About 100 dealers have bought it, Root says. On average, it drives in about $106,000 a month in service revenue for a dealer, he says.
Miltsch got an early deal and pays $395 a month per store. He averages about 30 to 50 added service visits a month from online garage customers depending on the season.
"If you figure one customer comes in for a transmission flush, a tire rotation and an oil change, that could create a $300 to $400 job," Miltsch says. "To break even, we just need one or two customers to come in per month, and we're easily exceeding that."
