Building up F&I offerings and brand loyalty

Whether they like it or not, dealers are battling for loyalty with competing stores selling the same brands.

Manufacturers want consumers to have positive experiences with their dealerships and products to build brand loyalty and develop long-term relationships. This brand loyalty, in turn, can reap benefits for stores in the form of sales and service revenue as people become repeat customers.

But there's a catch: That brand loyalty isn't confined to any one dealership, so stores selling the same models as neighboring retailers have to find ways to stand out from the pack, says Larry Dorfman, CEO of aftermarket technology provider EasyCare. 

EasyCare believes it has a tool that will help dealerships build loyalty for their particular stores, not just the brands they're selling. It's called the Custom Dealer App, which enables dealerships to maintain relationships with customers long after they purchase a vehicle. It launched in February. 

For customers, the app is a platform where they can receive vehicle service alerts and discount offers, schedule service appointments, look at CarFax reports, research F&I products and peruse dealer inventory when they're ready to trade in their vehicle. The app receives data from an optional OBD-II plug-in device as well, so motorists can get vehicle health reports. 

For retailers, the app is a connection point with consumers that taps into their mobile lifestyles. Instead of direct-mail coupons, dealers can use the app to reach consumers through their phones and carry on relationships in the years after a vehicle is sold to capitalize on lucrative maintenance opportunities. They also can choose to sell the OBD-II plug-in device to customers through the F&I office. 

The app is custom-designed for each store. It has been downloaded around 3,000 times so far, EasyCare says. And for one of the company's clients, the Custom Dealer App is fostering engagement. Sheehy Auto Stores in the Washington, D.C., area is seeing 68 percent of its customer users engage at least once a month with the app, EasyCare said.

For app users, the OBD-II device provides a bonus, according to Dorfman. "When the plug is in the port, it's reading the customer's vehicle when it's being driven and driving responses to the app that are also communicated to the dealership," he said. "We close the loop between the customer, their car and their dealership."

For example, he said, "the car can communicate to the customer [through the app] when they're due for service, and we can have the dealer get the same response to give a discount for that service right at that time. The OBD adds a dimension that gives the customer more confidence, more believability."

Dorfman said a service alert directly from the vehicle is more effective than a message from a dealership.

The OBD-II port is a battleground for the likes of AT&T and Verizon Wireless. AT&T's diagnostic service offering is called Audiovox Car Connection 2.0, while Verizon has a similar app called hum.

It would behoove dealers to try to win access to customers' OBD-II ports to engage them on a long-term basis and keep them from turning to independent shops for routine maintenance, Dorfman said.

The OBD tool's ability to track vehicle mileage and maintenance is attractive to business owners, too. One dealership sold six of the plug-in devices to a customer who was introduced to the tool when buying his own car but decided the devices would be useful for all of his business vehicles.

Dealerships can give the OBD-II device to customers for free after a vehicle purchase as a "why buy here" inducement or offer it to them in the F&I office. Some dealers have been charging between $99 and $149 for the device, an EasyCare spokeswoman said.

EasyCare says one effective approach for dealerships is to have sales staffers set up a soft introduction of the app and OBD tool to customers and then let F&I managers follow-up during the finance process. The company suggests that salespeople plug the OBD device into a vehicle before a test drive, show the customer the vehicle's health scan after the drive, then move on to another topic.

Later, the F&I manager, after introducing the customer to the store's service and maintenance plans and other add-on products, reminds customers of the ability to run health scans and manage their maintenance even more closely with the OBD device connected. Whether the device is purchased or not, the customer is instructed to download the app and use it to schedule the first service appointment.

People who shop for vehicles through the app can be prime targets for repeat buys. While websites can track how many people visited and clicked on a page, EasyCare says its app can provide more granular information.

For instance, the app will know which vehicles the person owns in addition to the cars they're looking at. Users can add vehicles to a watch list, so the app will notify them when a price has dropped or when new inventory that matches the criteria for their preferred vehicles arrives.

"He's been looking at these three vehicles on your app. He is getting ready to make a purchase. We start looking at information that can be gathered through mobile and using the technology to help organizations grow their business," said Shawn Inks, mobile performance driver for EasyCare.

He added: "This is technology being used to offset some of the requirement for the dealership to have to mine through that data and figure [out], "Who do I talk to and when do I talk to them?' When I talk to them is almost just as important as who I'm talking to."