April 2012 Success Story

Success Story

Spring Branch Honda Spring Branch Honda Sales Increase 25% and Service Business is Up 13% in Just a Few Months’ Time Spring Branch Honda, formerly Goodson Honda West, a Penske Automotive Dealership, serving the greater Houston, Texas area, has recently seen a boost in their sales and service business after implementing a new targeted and digital marketing strategy. This new approach has helped them to attract, sell, service and retain more customers while effectively promoting all their profit centers: new used, finance, service and parts. In just a few short months, Spring Branch Honda is up 25 percent for the month of February, selling 52 more units over February 2011, while their service business is up 13 percent over the last 4 months within their primary marketing area compared to the same period last year.

“Our sales were trending slightly downward in 2011, but after shifting gears late in the year we’re seeing a noticeable upward swing in both sales and service, as evidenced by a strong February – we’re up 25 percent over last February,” said Teno Fontenot, General Manager at Spring Branch Honda.

Serving a large metro market like Houston can be a daunting task with fierce competition from same brand and off-brand competitors.

Like many large metro market dealers, Spring Branch Honda sought to reach the right customers with the right message, bring those customers into their showroom and service bays, and keep them coming back again and again – and do it affordably.

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First, Spring Branch Honda completed an exhaustive five-year historical analysis of their sales and service transactions to determine customer trends. The results were then compared to leading third-party and industry data to establish consumer patterns within their local market. This enabled Spring Branch to identify vehicle owners with the highest statistical probability of buying or servicing with their dealership, as well as identify samebrand owners who had never visited their dealership, and off-brand owners with a historical pattern of crossing over to Honda.

With their primary marketing area clearly defined, Spring Branch Honda’s next step was to create and implement a marketing strategy with the right message that would include clear calls-to-action and consistent communications, targeting their ideal customers and prospects.

They developed a comprehensive targeted and digital marketing strategy using variable direct mail and email campaigns that consistently speak to customers throughout the 60-month life cycle of their vehicle with custom messaging that includes: a thank

INTEGRATED PROMOTIONAL MATERIALS

you and welcome message for recent purchasers, maintenance reminders for newer vehicles not yet in-equity but that may be due for recommended maintenance, and ongoing targeted mail and email sales communications to customers in an equity position.

Spring Branch Honda’s campaigns always include sales offers with custom service offers that reflect the service status of the customer’s vehicle. For example, active service customers who routinely come in for service receive a $29.00 “Oil & Filter Change” coupon, but customers who are categorized as

Spring Branch Honda lost, or who do not regularly service with Spring Branch, receive the same offer but for $26.00 to encourage them to come back.

A distinctive part of Spring Branch’s sales and service marketing strategy is to target conquest service customers within their primary marketing area who own Hondas but did not buy from them. Since most dealers only use the manufacturer’s service marketing program, they tend to be limited by the manufacturer to only communicate with customers that have purchased directly from their store and are constrained from contacting conquest opportunities within their market. This greatly restricts a dealer’s ability to reach a significant service audience.

If a dealer only has 30 percent market share, they are essentially missing out on an additional 70 percent of the area’s service market. Spring Branch recognized the opportunity to broaden its service marketing program with conquest consumers and has greatly expanded their reach of potential service customers.

“Our service business was relatively flat from January through September of last year, but over the last 4 months we’re up 8 percent in service across the board, and we’re actually up 13 percent in service within our primary marketing area,” says Fontenot.

As part of Spring Branch Honda’s digital strategy, all their mail and email campaigns direct customers to an online Campaign Conversion Site that not only displays the featured

promotions of the mail or email campaign they have just received, but also shows them every sales and service offer that Spring Branch is currently running. If a customer is not in the market for the specific offers they receive in the mail or by email, they can check Spring Branch’s campaign offer site, http://springbranchhondaoffers. com, for other available offers.

In addition to their targeted and digital campaigns, Spring Branch has also implemented a unique strategy

TENO FONTENOT SPRING BRANCH HONDA GENERAL MANAGER

that specifically targets vehicle sales within their service department.

This program, the “Vehicle Exchange Program” is integrated across Spring Branch Honda’s web site, campaign conversion site, the showroom and service lanes, as well as their direct

mail. The way it works is that a confirmation call from a dedicated call center is placed to confirm a customer’s service appointment. If a customer is in an equity position, the call center representative informs the customer that they are eligible to upgrade into a new vehicle for the same payment as their old vehicle. Now, Spring Branch is proactively reaching out to eligible in-equity buyers before they have a chance to enter the market and shop the competition.

Since implementing their new strategy, Spring Branch has seen a noticeable increase in their database of active customers. Active customers – those who do business two or more times within a twelve month period – grew by 350 customers in just a few months’ time. By consistently communicating with their customers and effectively targeting conquest consumers across multiple mediums, Spring Branch Honda is changing the dynamic of their customer base, increasing customer activity and creating customers with a greater lifetime value to the dealership – customers who are more frequent and loyal, as well as more inclined to refer family and friends.

“The best customer that any dealer can find is one they already have because customers who have an active service relationship with a dealership are seven times more likely to purchase with that dealership,” says Budd Blackburn, owner of Team Velocity Marketing, the company that Spring Branch Honda uses for their sales and service marketing.

Success Story

Success Story In just a few short months, Spring Branch Honda is up 25 percent for the month of February, selling 52 more units over February 2011, while their service business is up 13 percent over the last 4 months within their primary marketing area compared to the same period last year.

Spring Branch Honda

+52

UNITS SOLD MORE THAN IN FEBRUARY 2011

SPRING BRANCH HONDA

13%

SERVICE BUSINESS INCREASE OVER THE LAST 4 MONTHS

IN A NUTSHELL Spring Branch Honda sales increased 25% and their service business is up 13% in their primary marketing area after implementing a new strategy to attract, sell, service and retain more customers.

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Determine your ideal local market by identifying customers and prospects with the highest statistical probability of buying and servicing with your dealership now and in the future.

• Implement an integrated targeted and digital marketing strategy across multiple mediums that promotes all your profit centers: new, used, finance, service and parts.

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Create dynamic, cohesive campaigns that consistently speak to your customers throughout the 60-month lifecycle of their vehicle.

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Consistently target in-market same-brand prospects, and consumers who drive off-brands with a historical trend of crossing over to the brands you sell.

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Establish a sales-in-service program to sell vehicles from your own service bays for your in-equity customers before they shop the competition.

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Grow your base of active customers, creating customers for life, by working with a strategic marketing partner like www.TeamVelocityMarketing.com to help attract, sell, service and retain more customers while positively promoting all your profit centers: new, used, finance, service and parts.

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