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A Better Dealership Approach: Why Promotional Maintenance Beats Traditional Advertising

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A Marketing Plan That Results in Customer Attraction, Longterm Retention and Optimized Dealership Profitability

The choice is yours to make.

When you hold decision-making power over allocating your auto dealership's marketing budget, there are various options at your disposal for incentivizing prospective customers. You need to consistently funnel car-buyers into your showroom, executing battle-tested techniques to get them behind the wheels of your vehicle inventory.

The right blend of tactics comprising your automotive marketing plan results in customer attraction, longterm retention and optimized dealership profitability. All too often, though, dealerships suffer from over-reliance on traditional advertising techniques like print, radio and television without fully capitalizing on a more effective strategy — that offered by incorporating a dealer-owned promotional maintenance plan.

Here's a better dealership approach and why promotional maintenance beats traditional advertising:

The Downfalls of Traditional Advertising

As automotive consumers develop shortened attention spans and greater vehicle knowledge via the Internet, the world of advertising has become increasingly muddled. Outdated advertising practices have lost usefulness and newer techniques remain unproven. At times nowadays it may seem easier to get through to your teenager than to truly reach your vehicle-purchasing customer base.

Requiring a recurring cost with each usage, traditional advertisements have a limited shelf life and typically fall by the wayside following a month-long rotation. But even when their utility persists, their value has waned thanks to technological innovation. Consumers have transitioned from print to digital mediums, where advertising success is less proven. Meanwhile, television and radio commercials have suffered reduced effectiveness as consumers utilize digital video recorder (DVR) and satellite radio services.

 

The Benefits of Promotional Maintenance Plans

During this same decades-long span in which traditional advertising has lost usefulness within the automotive industry, the offering of promotional maintenance plans has gained steam. Dealerships have succeeded at drawing customers in by pairing Maintenance Included packages with refocused advertising efforts.

The ultimate goal of a promotional maintenance plan is to have it double as a full-fledge customer retention strategy. Not only are customers attracted to your dealership for an initial vehicle purchase, but they also return for service and, ultimately, their next car-buying experience.

What starts as a comfort level develops into longterm loyalty on the part of the customer, converting transactional value into lifetime value. Dealer-branded vehicle maintenance plans have demonstrated the ability to increase customer retention and service revenue by more than 60 percent and 15 percent, respectively, according to a recent study.

With a Dealer-Owned™ maintenance plan from Performance Administration, you promote only your dealership and your brand, separating yourself from competition by offering packages that fit the specific needs of your customer base. Performance Administration handles the heavy lifting along the way, providing your dealership with marketing materials and online tools to help keep you top-of-mind with your customers.

 

A More Cost-Effective Approach to Automotive Marketing

Traditional advertising generally involves casting a wide net. Your ad may reach a large, general audience, but it's seldom targeted towards your exact customer model, and you pay a premium for that placement. Consequently, traditional advertising rarely produces strong return on investment (ROI) for most dealerships.

An effective promotional maintenance plan, on the other hand, achieves the distinction of being both targeted and economical. You reach your vehicle-purchasing audience with a variety of options to fit their needs — prepaid, discounted or loyalty programs — and you do so in a cost-effective manner. The average dealership spends $628 per vehicle on traditional advertising before a sale is made. Performance Administration's Promotional Maintenance attracts customers to your dealership for one-quarter of that cost on average.

 

It Pays to Retain Your Customers

What's the cost of an automotive customer? Well, it depends on the nature of that particular customer. Return buyers are worth their weight in gold, as it's up to 10 times more expensive to acquire a new customer versus maintaining a current one. Furthermore, it's estimated that 80 percent of your company's future revenue will arise from the most valuable 20 percent of your existing customer base.

While most traditional advertising efforts focus exclusively on attracting new customers, an effective complimentary maintenance plan accomplishes this objective while also drawing previous customers back to your dealership for service and subsequent vehicle sales. Once your dealership truly appreciates the importance of customer retention to your bottom line, then the value of promotional maintenance becomes vividly clear.

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Administration Book Review Customer Reviews CX Dealership Loyalty Efficiency F&I Lost Opportunities Marketing Pay Plans Profitability Relationship Building Retention Strategy Rewards Programs Sales Process Service Revenue Service Traffic Social Media Staff Training Technology Vehicle Repurchase
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About the Author

Richard Knight

Rick Knight is an Automotive Customer Retention Executive who founded Certified Maintenance® Programs in 1996. Rick has been successful in building custom retention strategies for thousands of auto dealers to better than double CP/RO counts in the first 12 months of ownership, drive back 34+% of lost opportunity customers and help auto dealers Sell The Next Vehicle™. 

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