AutoSuccess September 2015 Success Story

SUCCESS STORY SEPTEMBER 2015 · NO 09

NEW CAR SALES UP

33%

ALLISON MUSANTE SMITHTOWN ACURA

PROFITABILITY IS UP OVER

3000% MARKET SHARE IS UP

3%

30X

HOW THIS THIRTY-SOMETHING GENERATED A 30X INCREASE IN PROFITABILITY AT SMITHTOWN ACURA Å CONTINUED INSIDE

Success Story Ä CONTINUED FROM THE COVER

Smithtown Acura is a single-point Acura dealership located in Long Island, New York — one of the most competitive markets in the country.

To put this in perspective, they have seven competitors within 30 miles of their store, including two that are in Acura’s top five for sales volume.

For nearly 25 years, this dealership was able to produce solid numbers without any significant marketing support thanks to its strategic location on “dealer row.” However, when their primary competitor upgraded their facilities and began ramping up their marketing, the store’s situation changed. Sales and service business began to struggle and the store’s profitability began to erode.

This is when Allison Musante, general manager of Smithtown Acura, saw an opportunity. “It was obvious that the marketing tactics our store had used for years were becoming progressively less effective, and that we had to make some changes,” Musante said. “I knew that if I could get six months and a reasonable budget, I could turn the store around, so I asked for a meeting with the owner and presented my case.”

In the end, Musante got the six months she asked for. However, she received a marketing budget that was less than half of what her new rivals were spending.

This meant that Musante and her team were challenged with the task of winning back their market in six months against two of America’s top five dealers and a new rival, all of whom had better facilities and bigger marketing budgets.

On the surface, this seems nearly impossible.

However, with Musante’s leadership and an innovative data-driven marketing strategy, that is exactly what they did.

In December of last year, Smithtown Acura was struggling to meet objectives. Today, their YOY sales volume is up 33 percent, their market share is up 3 percentage points and their profitability is up more than 3,000 percent. During this time they also climbed 20 spots on Acura’s national sales retention rankings — putting them in Acura’s top 20 percent for the first time in the dealership’s history.

Here’s how they did it...

DOING THE HOMEWORK

In order to piece together the right solution for her store, Musante sought out advice from

Smithtown’s Perfect Prospect map allows the dealership to see which ZIP codes offer the highest conversion rates with the lowest cost per sale.

many of the industry heavyweights within her brand. As part of the Greater New York Dealer’s Association’s “Next Generation of Leaders Committee,” she had an all-access pass to engage with some of America’s most successful Acura dealers. What she found was that many of them were using similar marketing strategies. In particular, she noted that two of Acura’s top five dealerships were using strategies that she could tailor to fit Smithtown Acura’s needs.

“The advice I received from industry leaders like Brian Benstock (GM of Paragon Honda/ Acura) and others was invaluable,” Musante said. “Their input allowed us to benefit on Day One from processes and strategies that could have taken years for us to learn on our own.”

Based on the information gathered from her peers and input from her leadership team, Musante made a bold decision. Smithtown Acura was going to sink or swim without any traditional media; instead, they would use a 100 percent data-driven marketing strategy.

DRAWING THE LINES

The first step in executing their new data-driven strategy was optimizing their data and pulling it into their new analytics platform. By combining their DMS and CRM data with other highvalue data sources, such as demographic info and vehicles in operation data, they gained visibility into their market that they would not otherwise have. Having this visibility allowed them to identify the prospects who have the

highest statistical probability of buying or servicing with Smithtown Acura, as well as allowing them to visualize what their marketing agency calls their “Perfect Market.”

“The days of drawing a circle around your dealership are over,” said Budd Blackburn, founder of Team Velocity Marketing, the agency Smithtown Acura uses to execute their datadriven marketing. “No two ZIP codes are the same because every market has unique factors that impact where consumers buy and service their vehicles.” Smithtown’s Perfect Prospect map helps the dealership understand how sales and service business is impacted by geographical anomalies, like bodies of water, bridges, interstates, etc., as well as see which ZIP codes offer the highest conversion rates with the lowest cost per sale.

“It’s amazing how what we know today is so different from what we thought we knew when we started this process,” Musante said. “There are more than 100 ZIP codes within a 30-mile radius of our dealership. However, 80 percent of our sales and service business comes from a little over half of those. Knowing where to spend our money allows us to be very effective with our marketing. For example, there are ZIP codes five miles from our store where it costs us two or three times more to acquire a customer than other ZIP codes that are more than 20 miles away. Now, we have a really good understanding of where we make our money and we know that inside those lines we can acquire customers at $130 per car sold.”

SMITHTOWN ACURA 100 PERCENT TARGETED MEDIA

Because traditional media channels are expensive and difficult to track, Musante exclusively uses targeted media channels. This includes targeted mail, email, display, Websites, search engine marketing and social media marketing. Also, since time management was also a concern, she uses a system that pulls all of the data from these media channels into a single, Web-based dashboard. This allows the dealership to evaluate the performance of each campaign without having to fumble through conflicting reports from multiple vendors.

“This approach allows us to see where our marketing is going and how our customers are responding to it,” Musante said. “For example, are they calling sales or service, are they opening emails, are they visiting our offer sites, etc. Best of all, I can manage all of this from a single location. This is important because I couldn’t spend as much time with my customers or with my people if I had to spend my time managing 20 different vendors.”

INTEGRATED STRATEGY

All of Smithtown Acura’s marketing is generated from a single platform. This allows them to deliver consistent messaging across all of their media channels without having to work with multiple providers to make sure offers are

consistent or manage quality control issues. A great example of this integration is Smithtown Acura’s Vehicle Upgrade Program.

Every component of Smithtown Acura’s upgrade program is created in the same place so that everything the customer sees has the same look and feel and, importantly, the same offers. This begins with the email the customer receives in their inbox, continues online with the dealership’s Websites and digital marketing and remains consistent all the way into the showroom and service lane. “Everything our customers see or touch looks like it was produced by the factory. Customers love it and so do we because it makes our dealership upgrade program look like a national program,” Musante said.

ALIGNMENT

One of the biggest keys to Smithtown Acura’s success was getting the sales and service departments to work together. To make this happen, she did three important things.

First, she adjusted compensation plans so that service writers and technicians are not penalized when a vehicle is traded in.

Next, she assigned a three-person team to exclusively manage upgrade opportunities in the service department. Finally, she personally worked as the upgrade champion (a role that

Smithtown Acura calls its “Customer Care Manager”) for the first month to make sure her processes were working and to assure service customers were feeling “helped, not hassled” by the store’s new program.

UNDENIABLE RESULTS

“We outperformed our competitors with half of their marketing budget,” Mustane said. “This is proof that with the right people and the right strategy, anything is possible.”

Thanks to Musante’s leadership and an innovative data-driven strategy, her singlepoint Acura store was able to take on some of America’s best and win big. They are up 20 spots on the national rankings for sales retention, they have gained 3 percentage points in market share and new car sales volume is up 33 percent. Best of all, Allison Musante, a thirty-something general manager in Long Island, NY, was able generate a 30X gain in profitability in less than nine months in one of the most competitive markets in the country.

To learn more about Smithtown Acura and the strategies outlined in this article email: successstories@autosuccessonline.com

Email Hang Tags

Apollo Technology Platform

Direct Mail

Point of Sale

Mobile Responsive Offer Site All of Smithtown Acura’s targeted marketing is managed from a single platform. This allows them to deliver consistent branding and offers across all of their media channels and monitor the results from all of their campaigns from a single, Web-based dashboard.

Success Story

Success Story

SMITHTOWN ACURA

“ We outperformed our competitors with half their marketing budget.”

-Allison Musante, General Manager, Smithtown Acura

Impact of Smithtown Acura’s Data-driven Markeing Strategy

3%

Market Share Gain

30X

Gross Profit Growth

33%

Sales Volume Increase

IN A NUTSHELL

30X: How This Thirty-something Generated a 30X Increase In Profitability at Smithtown Acura Research

Studied the best practices of Acura’s top performers so that her dealership could benefit on Day One from processes and strategies that others spent years developing.

100 Percent Targeted Marketing

Focused 100 percent of the store’s ad budget on data-driven strategies (no traditional media) that allowed them to exclusively target in-market prospects living in their most profitable ZIP codes.

Integrated Strategy

Delivered consistent branding and offers across all targeted media channels — targeted direct mail, email, Websites, SEO/SEM, social media, online display advertising and showroom displays.

Alignment

Adjusted processes and compensation plans so that the dealership’s sales and service departments could work more effectively together to capture upgrade opportunities in the service lane.

Undeniable Results

As a result of Musante’s strategy, Smithtown Acura has captured an additional 3 percent in market share, increased YOY sales by 33 percent, increased YOY profitability by more than 3,000 percent and has jumped up 20 spots on Acura’s national rankings for sales retention — putting Smithtown Acura in America’s top 20 percent for the first time in the store’s history.

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