Written By: Russell Grant

One of the best things about my job is the fact that I get to talk to so many owners, GMs, dealers, sales managers and service directors about their dealership’s owner marketing strategy. Or, in some cases, need for one. That’s when I find my work the most rewarding, when I’m speaking with dealers who are ready to reap the benefits of developing and implementing a strong, sustainable owner marketing strategy.

Because remember, there are only three ways to grow a dealership:

• Increase your number of active customers

• Increase your profit per transaction

• Increase your customers’ repurchase frequency

And the most effective way to accomplish these goals is with a well-planned and sustainable owner marketing strategy.

But over the years I’ve heard some of the same responses again and again when discussing owner marketing. It doesn’t matter what part of the country I’m in, the size of the dealership, or the OEM. They’re the same five mistakes and they have the same damaging results.

Number 1: “I need to focus on new business.” Dealerships often concentrate on bringing in new customers, and that’s important. But the fastest way to grow business is to focus on previous customers. More than two-thirds of consumers have two or more vehicles, yet less than one-third have purchased them from the same dealership. If a dealership builds on relationships it already has with satisfied customers, it can increase driveway share and see that percentage rise much more quickly and cost-effectively than with traditional conquesting. This strategy also has the added benefit of improving retention, which means being able to close a higher percentage of deals with higher profits. Because it’s a proven fact that previous customers are willing to pay more and negotiate less.

Number 2: “I already have a marketing plan.” I can’t tell you how many times I’ve had a dealer tell me he’s running a promotion because, “I’ve got to make my month” or “I need to hit my numbers.” That’s not a marketing plan—there’s no strategy, there are limited targeted communications and virtually no data mining. If you’re lucky, it might get you out of a tight month, but it’s not a sustainable growth strategy plan.

Dealerships need an owner marketing program that’s strategic and data driven. Fortunately, dealers have an enormous amount of data about their customers’ sales, service and F&I histories, which means they can develop extremely competitive offers, communicate them via multi-channel campaigns and target those customers who are most likely to respond. A dealer needs to communicate with his customers when it best serves them, not when it best serves him.

Number 3: “My CRM does that.” Sure, a CRM can identify customers with good equity. It can generate birthday reminders and supply email templates. It provides resources and information, but it doesn’t create a strategy. It can help dealers communicate with customers, but it doesn’t help them motivate customers. And that’s a critical difference.   

Data should serve as the foundation of a dealership’s strategic plan, driving its marketing decisions. But data alone is not the plan. The data needs to be used to develop compelling offers that get customers to take action. And for that, a dealership needs an owner marketing strategy. Not just a CRM.

Number 4: “My service lanes are already too busy.” The easiest way to activate a customer is through the service drive, and it should be a part of any owner marketing strategy. Period. Not only for the service revenue, but because an active service customer is six times more likely to buy their next vehicle from that dealership than a non-active one.

Number 5: “The OEM doesn’t give good enough incentives.” A dealer’s strategy shouldn’t be based on something he can’t control—incentives alone won’t give his dealership a competitive advantage. He needs to dig deeper. Talk to customers sooner. Say something different. Everyone may have the same incentives, but only a dealership has its customers’ data. The dealer can use that to create multi-channel communications that motivate customers by displaying their new payment versus their old payment—without even showing the incentive. That’s a marketing strategy that puts the dealer in control.

If you have any questions about developing a strong owner marketing strategy that avoids these five common mistakes, please contact me at 888.835.1689 or rgrant@jandlmarketing.com.