Fine-tuning the dealership TV set

Dealerships that plunk a TV in the service customer lounge, turn it on and forget about it are missing a chance to get marketing messages in front of a captive audience.

So says Chris Zamora, managing partner of Zamora Automotive Group of Stockton, Calif.

"I love the ability to communicate with customers directly," he said. "They're the best ones to advertise to, right? Rather than go through all the effort and expense you have to go through to try and drag people into the store, they're already here."

Zamora Automotive Group's Honda of Superstition Springs, in Mesa, Ariz., is tricked out with 24 video screens all over the dealership. The screens aren't just in the service customer lounge, but Zamora said that's where it's easiest to see the cause-and-effect between ad messages and customers taking the dealership up on promotional offers.

Starting in 2009, Zamora said, he bought a "customized digital content" system from Automotive Broadcasting Network of Jacksonville, Fla. ABN provides content, divided into as many as five TV channels, on an ongoing basis for more than 700 dealerships.

The content is tailored for different areas of the dealership. The system also allows Zamora to insert recorded ads or other marketing messages specific to the dealership, at regular intervals every hour.

Zamora said screens in the showroom, including a "video wall" that occupies nine screens, are heavy on product images. "That's a real "wow' factor," he said. Marketing messages in the service waiting area are more service-oriented.

"In the showroom, you don't want to show them the cost of an oil change. You want to show them beauty shots. Somebody who comes in the service lounge, you want to show them discounts on parts and service," Zamora said.

In between the dealership's messages, most of what customers in the waiting area see is TV content that ABN gets from the CBS network. Besides advertising, the dealership also runs "tech tips," which explain how features work and how repairs are performed, Zamora said.

Zamora likes the fact that customers won't see ads for competing dealerships or quick-lube franchises. "To see a commercial for a Toyota dealership, that's not the best thing in the world if you work at a Honda store," he said.

He likes to avoid news programming. "It's also the customer's mental state. Right now there's political tension, war, doom and gloom," he said. "I'd rather see something positive than how your 401(k) isn't going to be worth anything in five years."

But the biggest payoff for the Honda dealership is the response to a 90-second ad, which appears every 20 minutes, for the store's so-called Vehicle Improvement Program, or VIP. 

The concept is to get customers to trade in their vehicles for new models at the same monthly payments or as close as possible. 

To that end, the VIP ad offers a free oil change -- or the oil change portion of the customer's current service visit -- if the customer takes a test drive, Zamora said. Some customers take the next step and get their trade-ins appraised, he said. 

Before the Honda dealership put digital advertising in the service lounge, Zamora said, the store averaged five or fewer service customers a month who took test drives, got their trade-ins appraised and bought new vehicles. 

Since adding the screens and content, the dealership has sold 40 to 70 vehicles a month to service customers who went through the offer, he said.

Zamora is responsible for five of the family-owned group's dealerships in Arizona and Texas. He believes the customized digital content is expensive but worth it, but he said other stores in his group are free to disagree.

"Some of our stores are little guys, and we don't have it there. Not that we don't want it there, it's just that I believe in my general managers. They are real resistant to it, and I'm not going to force it on them," he said. Zamora wouldn't say how much he pays for the system.

Jennifer Lee, a spokeswoman for ABN, said most dealers spend $2,000 to $3,000 a month for a 36-month subscription, depending on the size of the dealership and the number and size of the screens ABN provides. The average number of screens per dealership is about 9.5, with four channels of content, the company said.

Other companies provide similar customized content for dealership screens, including CustomerLoungeTV, of Charlotte, N.C. While others may be less expensive, ABN says one of its advantages is that it promises its screens will be on 99.9 percent of the time, delivering a dealership's message.

Power outages can turn off a screen, but so can simple inattention. Many screens sold today, in order to receive high Energy Star ratings from the EPA, turn off if they don't receive input from a remote control every six hours or so.

As a result, "digital signage always fails," said ABN CEO Jerry Daniels. And a screen in a service lounge that's blank "sends a message" about technical competence, he warned.

"We take responsibility for seeing that it'll work," Daniels said, by monitoring the screens remotely, taking actions to keep them on, building them with battery backups and having field staff visit each dealership every 60 days.

Zamora said fixed operations get the greatest benefit from the system.

"It really adds value to your service department," he said. "It gives the customer a little ammunition for when people ask them why they go to the dealership for service."

James B. Treece contributed to this report.