May 2011 Success Story

Up 175% in Service ROs and 22.5% in Sales Checkered Flag Toyota’s Integrated Sales and Service Marketing Program Hits a Home Run While Toyota was down 6% nationally in 2010, Checkered Flag Toyota actually increased their market share by 25%, increased their sales by 22.5% and serviced over 30,000 more vehicles compared to the same 12-month period the previous year.

“We were looking for new solutions to help us get back in the game,” said Tim Rayfield, General Manager of Checkered Flag Toyota in Virginia Beach, VA. “2009 was a tough year for our industry and we needed a new playing strategy. We were looking for something that would help us attract

more customers, sell more vehicles, service more vehicles and improve our customer retention without spending more money to do it.”

In the spring of 2010, Checkered Flag Toyota ran an in-depth 5-year historical assessment of their customer database; then ran research and analysis on their local area market and emerging industry and market trends. The results identified Checkered Flag Toyota’s ideal market and their perfect prospects. By comparing their sales and service history against leading industry consumer databases, Checkered Flag

successfully identified where 90% of their business is coming from.

“There are approximately 1.5 million consumers in the Virginia Beach market, but only 60,800 are likely to buy or service their vehicle with us,” said Rayfield. “We know that a sale from a customer who lives outside our local market and has to drive a long distance to buy a vehicle from us will often have a lower gross profit and is even more likely to have a low retention rate for service and repeat sales because they’re not close by.”

Success Story Checkered Flag Toyota’s market research has proven invaluable in determining their perfect market and identifying consumers with a higher probability of doing business with them now and in the future, thus creating more loyal and frequent long-term customers who have a higher lifetime value because they will continue to service and purchase from Checkered Flag Toyota. Plus, having a clearer picture of what was happening in their immediate local market enabled them to refocus their advertising efforts, and costs, away from the typically more expensive broad mass marketing platforms like radio and television, to more targeted and cost-effective marketing.

actly who to target,” said Rayfield. “We used to overspend by sending the wrong types of communications to a broad audience, and as a result our pitch was less effective, and more expensive.”

Checkered Flag sends targeted mail and email campaigns that have a customized message that reflects the appropriate status of the customer’s vehicle.

They communicate a consistent, cohesive message that positively affects all their profit centers: New, Used, Finance, Service and Parts, and has steadily generated better returns. Not only are the customers targeted successfully, but they speak to them with the right message based on the status of their vehicle.

Marketing.com, the targeted marketing company that Checkered Flag Toyota uses. “In the past, they’d reach out to a customer who had a three-year-old Camry with emails and mailers from sales, service, finance, plus the manufacturer. Now they send one targeted campaign that promotes multiple profit centers by customizing the message to what the customer needs at that time,” Blackburn explained. “When the threeyear-old Camry owner gets one direct mail or email campaign to extend their warranty or trade-in at above market value for their in-equity Camry it’s more effective because the personalized messaging is exactly what they’re in the market for.”

“We found that we could talk to more of our current customers, as well as, ‘true’ prospective customers with a more effective message because we know ex-

“Checkered Flag Toyota has been very successful at sending the right message to the right customer,” said Budd Blackburn, owner of www.TeamVelocity-

Checkered Flag Toyota’s service has seen the greatest impact for this targeted messaging. Between March ’09 and February ’10 they serviced 17,543 vehicles

In a Nutshell Checkered Flag Toyota increased their market share by 25%, increased their sales by 22.5% and serviced over 30,000 more vehicles, up 175%, compared to the same 12-month period the previous year.

• Checkered Flag Toyota conducted exhaustive market research that included a 5-year historical analysis of their sales and service transactions, the local area market and emerging industry and market trends to identify their perfect market.

• Checkered Flag Toyota works with a targeted marketing company, www.TeamVelocityMarketing.com, to target customers who have the highest statistical probability of purchasing or servicing with their dealership.

• Checkered Flag Toyota consistently speaks to in-market same-brand prospects, and consumers who drive brands with a historical trend of crossing over to Toyota, resulting in a healthier overall trade pattern. Over the last year their top-traded Toyota model year went from a 2000 to a 2007 with much higher resale values.

• Checkered Flag Toyota monitors all in-bound calls by using 800 numbers on all their advertising so they can maintain a high-level of customer service and responsiveness that is critical in today’s fast-paced and competitive market.

• Checkered Flag Toyota successfully attracts, sells, services and retains more customers for less cost while affecting all their prot centers, New, Used, Finance, Service and Parts more protably by implementing a dynamic new targeted marketing program in early 2010.

Success Story

Checkered Flag Toyota Promotional Materials

Success Story and from March ’10 to March ’11 they have serviced 48,321 vehicles. That’s 30,778 more vehicles or an increase of 175%. “Needless to say my service department is sold on this marketing program. Plus, we’ve seen a 124% increase in customer service retention since implementing this new strategy,” said Rayfield.

Another objective of Rayfield’s was to grow his active customer base by targeting those perfect prospect consumers identified by their research. “We’ve been reaching out to prospective inmarket consumers driving Toyotas or conquest vehicles that have a historically-high crossover percentage, and the rate of response has been amazing.

Our goal is to reach these in-market consumers before our competitors do, so we can take them out of the market before they buy elsewhere and make them a customer of ours for life,” explained Rayfield.

“A surprising bonus to this marketing program is that we’re cashing in on a lot of great one-owner trades for considerably less than we would have to pay at auction, which has significantly improved our certified pre-owned business,” explained Rayfield. “Earlier this year we ran a ‘Silver Bullet’ campaign that offered above market value for trade-ins when they purchased a new vehicle. We took in 107 trades from that campaign and 52% of our new car deals had a trade. It was a very effective campaign,” said Rayfield. “We have a healthier overall trade pattern.

We trade more single-owner, familydriven Toyotas which beats paying for the ‘unknown’ at auctions any day. Last

year our top-traded model year was a 2000, today our top traded model year is 2007. That’s a significant improvement and I don’t have to tell you that fetches a much better resale price,” added Rayfield.

Checkered Flag Toyota also sought to elevate their brand image by paying more attention to what they were putting in front of their customers.

“There was a time when we had multiple vendors contacting our customers with different offers and inconsistent messaging. It began to confuse our customers and potentially hurt our brand,” said Rayfield. “We are more cognizant of the messaging that we promote these days. We make sure our marketing positively reflects our brand image. We have a more sophisticated look and feel that tends to help gain credibility within the brand and gets a more positive response.”

Checkered Flag invested a lot of energy into finding a marketing program that would drive traffic and increase sales and service more profitably. With the average cost of generating a single lead ranging somewhere in the ball park of $150, Rayfield wanted to be certain that their marketing and advertising efforts produced results and were not lost on missed opportunities. Checkered Flag uses multiple toll-free 800 numbers on all their mail and email campaigns to monitor and track in-bound calls.

This helps assure that every customer is treated with the best customer care, courtesy and professional service and that appointments are set and followed up on quickly. “We have to seize the moment whether it’s a potential sale,

someone wanting to schedule a service appointment, or a customer who has a concern. We have to be hyper-responsive to our customers, there are too many options out there today and people are quick to move on – we work too hard to let that happen.”

Cohesive, consistent communication is crucial to Checkered Flag Toyota’s success.

Their marketing program talks to customers from the moment of purchase with welcome messaging, through the 5-year life-cycle of the vehicle with maintenance reminders, mail and email communications that positively affect all their profit centers: New, Used , Finance, Service and Parts. It’s a smart, strategic approach to attract, sell, service and retain more customers profitably for less cost.

“When you communicate with your customers, you keep your customers,” said Rayfield. “This works because we are marketing more efficiently to customers that are likely to continue buying and servicing with our dealership.”

4x6 Silver Bullet