AS January 2013 Success Story

Success Story

First Team Toyota Up 41% in Sales in Just 6 Months, First Team Toyota Increases Profitability with New Integrated Marketing Strategy

It’s no secret that the car business is a highly competitive marketplace and with the ever-changing world of advertising many dealers face the ongoing challenge of how to effectively reach the right customers with the right message, bring those customers into their showrooms and service bays, and keep them coming back again and again.

As consumer shopping habits continue to shift, so must the means by which car dealers reach their audience.

The appeal of traditional mass media platforms like TV, print and radio, continue to wane as more effective targeted and digital mediums that include targeted email and mail, and internet prove to be more effective at attracting consumers. Dealerships that do not understand targeted and digital marketing continue to see diminishing returns with traditional mass marketing that continues to be costly and nearly impossible to measure. Ă… CONTINUED INSIDE

Success Story Ä CONTINUED FROM THE COVER

Today, the most successful dealers are using targeted and digital mediums that are less expensive, more measurable and give a better return on investment than traditional mass marketing. The key to their success is integrating all their targeted and digital advertising to maximize their results, however, this can also present a challenge as the average dealer works with multiple vendors to execute their entire marketing strategy which results in different strategies, messages and designs that too often are not integrated with one another.

First Team Toyota, serving the Chesapeake, Norfolk, Portsmouth and Virginia Beach regions of south eastern Virginia, has found a solution by implementing an integrated targeted and digital marketing strategy across multiple mediums using one marketing partner to attract, sell, service and retain more customers for less cost than traditional mass marketing.

“Since implementing this program our new and used sales are up 41 percent overall,” said Gerry Reust, President and General Manager of First Team Toyota. “We’re up even more in our top 20 selling zip codes, an average of 53 percent, after focusing on and defining our target audience within our primary marketing area.”

First Team Toyota began with a comprehensive five-year historical analysis of their sales and service transactions to determine customer trends. Those findings were then compared to leading third-party and industry data to establish consumer patterns within the local market. The results enabled First Team Toyota to identify vehicle owners with the greatest probability of buying or servicing with their dealership, as well as identify same-brand owners who had never visited First Team Toyota, and off-brand owners with a historical pattern of crossing over to Toyota.

“Our campaign site is a definite online driver. It houses all our sales and service promotions and is automatically updated at the start of each month by my marketing company so it’s always current. It’s proving to be a great resource and a definite traffic booster.”

GERRY REUST President and General Manager FIRST TEAM TOYOTA

Once First Team Toyota had more clearly defined their market, they implemented a comprehensive targeted and digital marketing strategy using variable direct email and mail campaigns that consistently speak to customers throughout the 60-month life cycle of their vehicle with custom messaging that includes: a thank you and welcome message for recent purchasers and ongoing targeted email and mail sales communications to customers in an equity position.

First Team Toyota also targets conquest service customers within their primary marketing area who own Toyotas but did not buy from them. This is unique because most dealers use the manufacturer’s service marketing program which often limits a dealer to only communicate with customers that have purchased directly from their store, but also limits the dealer from contacting numerous conquest opportunities within their market. 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. First Team Toyota recognized the opportunity to broaden its service marketing program with conquest and has greatly expanded their reach of potential service customers.

First Team’s strategy also includes an online Campaign Conversion Site that not only displays the featured promotions of the email or mail campaign they have just received, but also shows them every sales and service offer that First Team Toyota is currently running. Every outbound email and mail campaign directs the customer to First Team Toyota’s campaign conversion site, www.FirstTeamToyotaOffers.com for other available offers. So, if a customer is not in the market for the specific offers they just received they can find something that fits their needs with just a couple clicks online.

“Our campaign site is a definite online driver. It houses all our sales and service promotions and is automatically updated at the start of each month by my marketing company so it’s always current. It’s proving to be a great resource and a definite traffic booster,” said Reust.

Part of what ties all First Team’s campaigns together is their point-of-sale merchandising. When customers visit the dealership they see current campaign merchandising throughout the store that validates the advertising message they recently saw online or received in the mail, further building credibility and helping increase the closing ratio.

In addition to their targeted and digital campaigns, First Team Toyota also recently implemented a unique strategy that specifically targets vehicle sales within their service lanes. This program, the “Vehicle Exchange Program” is integrated across First Team Toyota’s web site, campaign conversion site, the showroom and service lanes, as well as their direct mail. The key to this program is the confirmation call that First Team places to confirm the customer’s service appointment. If a customer is in an equity position, they are informed that they are

First Team Toyota eligible to upgrade into a new vehicle for the same payment as their old vehicle.

First Team Toyota proactively sells to their customers in service before they enter the market and begin shopping the competition. Since starting the VEP strategy First Team is averaging 20 vehicle sales a month out of their service lane.

“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,” said Budd Blackburn, owner of Team Velocity Marketing, the company that First Team Toyota uses for their sales and service marketing.

An added benefit to this integrated sales and service marketing strategy is a healthier trade pattern. Since switching strategies First Team’s late model trade pattern, 2006 or newer, has significantly increased for same brand trades. “This is ultimately a big savings for us, not having to overpay at auction,” added Reust.

Once a customer takes delivery, First Team Toyota stays in contact with them by thanking them for buying and asking for referrals and online reviews, which helps to build their reputation when consumers search for them online. Having a positive online reputation is critical. According to a Group M Study 2011, 76 percent of consumers use a combination of web search and social media as their first

step before making a purchase and 70 percent of online consumers report that they consult reviews before purchasing according to Business Week 2011.

To measure the effectiveness of all their marketing strategies and ensure quality customer care, First Team Toyota uses a call-monitoring system to track their advertising, employees, and how their customers are treated by listening to every call that comes into their dealership. They receive daily, weekly and monthly reports that enables them to see which ad campaigns generate the best response and preempt any potential customer concerns before they escalate – which improves their overall CSI and helps create lifelong satisfied customers.

Success Story

Success Story

First Team Toyota

“Since implementing this program our sales are up over 41 percent compared to the same period last year. We’re up even more in our top 20 selling zip codes, an average of 53 percent, after focusing on and defining our target audience within our primary marketing area.”

-GERRY REUST | PRESIDENT AND GENERAL MANAGER OF FIRST TEAM TOYOTA

41% INCREASE

53% INCREASE IN TOP 20 SELLING

ZIP CODES

IN SALES

IN A NUTSHELL Up 41% in Sales in Just 6 Months, First Team Toyota Increases Profitability with New Integrated Marketing Strategy •

Define their ideal local market by finding the perfect customers and prospects with the highest statistical probability of buying and/or servicing with their dealership now and in the future.

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Create dynamic, cohesive campaigns that consistently speak to their 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 they sell.

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Drive consumer traffic to a custom campaign conversion site that promotes all their sales and service offers to help increase their internet sales and service leads.

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

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Build a positive online reputation by asking customers for referrals and online reviews via an online review platform like Business Rater Automotive.

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Monitor inbound calls so they know what ads are generating better response rates and preempt CSI issues before they escalate.

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Work with a marketing partner like www.TeamVelocityMarketing.com to implement an integrated targeted and digital marketing strategy across multiple mediums that promotes all their profit centers; new, used, finance, service and parts.

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