Dealership Promotions

In some areas of the Country school has already started and there are many more students that will be hearing the bell ring between now and just after the fast approaching Labor Day holiday. Speaking of Labor Day, and of kids going back to school (which means they are in the car more often) how many of you readers have taken the opportunity to address either holiday delinquency or travel safety issues with your customers? I mention delinquency because it may be that some of your customers have not properly budgeted for the expenses of back to school. Therefore, you may experience a slight uptick in the delinquency rate.

This is where a good promotional effort would help, especially when it is organized and directed to serve your customer with information well in advance of such an important date or event. I elected to go ahead and write this piece even while knowing that our next upcoming opportunity (Labor Day) is almost in the rearview mirror, so that my dealer friends could properly plan for the next event and even take a look at how their promotion would happen if one were currently scheduled. Promotions are not expensive when properly managed and the effect of direct customer involvement returns more for the investment dollar than any other form of Marketing. Since we know that our customers are sending their kids back to school and within a week we are also celebrating a holiday, it’s a great time to have a “Customer Appreciation Promotion.”

Managers should look 30-60 days down the road and check the calendar for dates that make sense to have a promotional event. A good promotion is a win-win proposition. Dealer and Customer each benefit.

Recently, I listened as a dealer explained his frustration when a customer had experienced damage to their vehicle from lack of routine maintenance. While many of our customers get caught up in their busy days, many more are guilty of neglect of regular maintenance or safety checks for the vehicles that they are operating. Are you prompting your customer to be proactive with maintenance during the deal closing? Remember, our customers are buying higher mileage used cars that seem new to them.

Take for example the upcoming holiday when most travel is done by car. While not many of our customers will be headed out for extended travel, they will be visiting friends and relatives while enjoying the day off. A promotion for your business prior to a holiday when travel may be expected is a great idea. Not only does it promote safety and a demonstration of your concern, it may well serve to motivate customers to visit the dealership and take advantage of special promotional offerings as well as making their payment.  

When hosting a promotion, you can make it easily affordable by offering hotdogs and burgers cooked up on the grill with potato chips. Offer an inexpensive “Customer Appreciation” prize that has been on display and have your customers sign up for a drawing. Since we are suggesting that this promotion provide a safety or educational aspect, do not forget that it also must be fun and provide for customer involvement. Your customers will appreciate a cold soda or water with the chance to stop for a moment and have a plate of food. It is not difficult to hand them a flyer or spend a moment with them to review how they maintain their vehicle. Even if a promotion budget reached the $500.00 level you are many dollars ahead if you avoid one engine failure.

Solicit referrals and have staff on hand to help the customer address the following issues or by providing them with a list so that they can perform the checks with the help of a friend or family member:

 

  • A periodic maintenance reminder date (use a birthday date and repeat monthly) mine would be the 27th
  • Have them check their tire pressure, spare and jack for functionality and knowledge of use
  • Has the oil been checked (27th – monthly) or changed recently? When is the next maintenance due?
  • Do they have a set of jumper cables and a flashlight?
  • Conduct promotions that promote wearing of seatbelts (promote safety and avoid traffic stops)
  • Have a vehicle winterization and anti-freeze program (Memorial Day and Labor Day)
  • Do not loan your vehicle to someone (it might be impounded)
  • Use turn signals and check brake & headlights monthly (another safety and traffic stop issue)
  • Lock your car even when you are driving it (do not become the victim of a crime)
  • Never leave it running when parked or unattended (it might be stolen)
  • Do not operate your car on “E” but try to maintain a ¼ tank or more gas level
  • Keep the gas cap lid tight and try not to use gas that contains alcohol, use a mid- grade gas

 

Even if your customer does not plan on travelling for the holiday, I recommend a pre-holiday promotion that provides support for your customers, checking items like those listed above at least two times per year. Depending upon the climate in your area of operation the customer will have dramatic tire pressure losses between summer and winter operating conditions. Promotional programs such as these show customer appreciation, reward loyal customers and offer the opportunity for viewing the collateral or soliciting a trade-in.

In a day and age when contract terms are extending well beyond three years in some cases, it just does not make sense to be a dealer that is not involved with promotions that help customers protect their investment which is your collateral.

The checks listed in the bullet points above are compiled because they are consistent with real life issues, help prevent problems and reflect our customers experiences and reported complaints. They are proven preventative measures which limit vehicle complications and or breakdowns.

If you are paying referral fees but not conducting a sell-a-friend promotion to generate referral business, please contact us so we can discuss this valuable tool for generating sales. If you are not conducting a CAP or customer appreciation promotion to reward current customers, please contact us for information on this also. The key to effective promotions is that they be executed properly.

We suggest the use of weekend promotions to reward current customers and to assist them by encouraging them to be proactive regarding maintenance issues. At AFS Dealers we have helped Buy here Pay here and Lease here Pay here operators develop many successful promotions that keep them in touch personally with their customer base. We offer communication avenues within our operating system for e-mail and texting as well as contact by phone or robo call. Even today when many customers do not make in-person payments we keep you in direct touch with your customer in many ways.

Talk soon.

-Mike Eskina, August 31th, 2018

Time waits for….

I have a friend in the real estate business and he told me that if I was waiting for the price of land to come down that it would be a long wait. So far, he has been correct but let’s not forget that he is in the business of selling.

The value of land increases along with supply and demand forces that are at work around it. Many investors have correctly predicted the expansion and growth of a commercial or residential area and have done well at selling time.

Land is very well laid out for all to see. Sometimes there are changes but essentially what you see at a specific location today is a lot like you will see after the passage of time. Some wines age gracefully and become more valuable. Not so much with beer. Another associate of mine who was invested in a beverage company explained the value that the brewer (manufacturer) realizes from placing a prominent date upon their product. We believe it is for the determination of freshness and it is, but it also reminds the seller of the age of the product.

I have purchased many vehicles and have never done so with the intent of creating an outflow of cash that would exist long enough to erode the expected return or economic value that I was looking for at the time of purchase.

Inventory is dollars. It is cash. It is beer. When it loses freshness, it must be poured- out. Only a desperate and thirsty customer would drink an old beer or buy an over-age and problematic vehicle. I know that there are dealers who have sold an Orange Gremlin that sat on the lot for 182 days and surprisingly enough even signed off on the title when the loan paid out.

But let’s not talk about the one time in a 25- year career event. Should we not examine the fortunes which result from the more effective and reasonable management of vehicle inventory? Whenever I spend time consulting with a dealer I first discuss inventory.

The vehicle purchase is occasionally the problem. Buyers sometimes make mistakes or fail to recognize well disguised defects which become apparent after the fact. The first loss is the best loss. Managers receive vehicles into inventory that are certified or that have passed inspection but in the most efficient system that I ever operated we gave the manager a great tool. The right to rescind the deal.

If a dealership manager evaluated a vehicle which was assigned to or purchased by the store with a valid and documented reason for disposal then we took it back. It became a buyer or management problem rather than an eventual cost or customer problem. Trust me, the loss or breakeven was a great investment and helped avoid numerous other possible issues.

In a recent study of multiple web sites from dealer prospects I focused on the issues which involved customers rating the dealership. Overwhelmingly, the results were always the same. If a customer was happy with their vehicle they might offer to write a positive review. I will assure you that a customer with a broken car can be very vulgar and disparaging to you and your business and that they will write a negative review.

Managers can force the issue on vehicles which lack in operation, appearance and cost if they have the proper tools. First, they must realize that expenses when extended outside of policy boundaries will not fix the problem. Appearance or cosmetic issues can be just as damaging especially if the price is not modified or adjusted. Vehicles that do not operate satisfactorily during testing will not serve well if sold and passing problems on to customers is contractual suicide.

The cost of land seems to be ever-increasing even if the grass isn’t mowed or improvements are not made. Vehicles depreciate when being operated or when sitting in your inventory and the reasons are many. Inventory management is a specialty that we teach. From acquisition, inspection, re-conditioning and merchandising as well as dealing with warranty and issues after the sale. We are here to help with training and operations.

After all, we like the real estate agent are in the business of selling and time stands still for no one.

-Mike Eskina, July 20th, 2018

I can see clearly now…

I was driving home after a business meeting, I had a cooler with cold water, plenty of fuel and the 231 miles should be behind me in just over three hours, barring traffic or construction. I wanted to get home by supper time, enjoy a nice home-cooked meal, sleep in my own bed and spend the upcoming holiday weekend with my wife.

My cell phone alerted via the weather app and I was approaching the two counties where it was said that a storm would produce high wind and hail. My thoughts then turned to my new truck and images of ping pong sized balls of ice bouncing from the hood and windshield. I could see the thunderstorm on my left coming from the South-Southeast. I pulled over on the roadside recalling my always used business advice given to many a client, “It is a poor plan that admits no modification.”  I reached into the console and pulled out the road atlas. Let’s see, Missouri now Kansas now Missouri again. Got it. Travel 21 miles to Butler and take 56 West for 18 miles then resume northbound on 69 highway. Here we go.

 Soon after taking the detour It began to rain and I set my wipers at intermittent mode which worked well for about ten miles. Then the deluge. Hard, heavy rain began to fall. As I turned up the wiper speed one setting at a time, I went to maximum wiper speed before I could clearly see the road. That’s when the thought (and the song) hit my mind, “I can see clearly now, the rain is gone; I can see all obstacles in my way.” Almost immediately the rain began to slow and then fall lightly. I was heading North in only a few minutes this time following the storm. Had I continued with my original plan I would have driven directly into its’ path.

Obstacles to business plans are sometimes predictable and sometimes from the blind side. I frequently tell associates and clients that, “if you don’t know where you are going, any road will get you there.” As with my road trip I was fortunate enough to have technology and open minded enough to amend my plan. I must admit that in my younger days I would have opted to forge ahead and try to out run the storm. However, even with my weather app and GPS technology I did get a little archaic when I referenced my road Atlas. I liken that to looking that up in your Funk and Wagnalls rather than doing a Google search, but hey, it worked.

My life’s work has been to develop business plans and do analysis for auto dealers and entrepreneurs, finance representatives and lenders and others who need to see more clearly regarding their prospective or current business plan or model. Like any other field of work, we look to those who can offer success stories and share experiences when they did try to drive through the storm and what those results turned out to be. Oh, and for anyone who needs consulting and training or the best technology available in a DMS please contact me at your earliest convenience.

I have a special offer for the first to tell me who the artist was and the year the song was released.

Talk soon.

-Mike Eskina, June 29nd, 2018