Archive for January, 2013

The Experts Speak: Pre-Paid Maintenance Plans

Monday, January 21st, 2013

Dealers love the “breakage” fees that come from under-used Prepaid Maintenance plans (PPM) but did you know that PPMs, when used by your customer, can play a major role in retaining consumers and maintaining their loyalty?

Mike Gorun, CEO at Performance Loyalty Group, says, “Dealers have been slow to embrace the retention and income possibilities of PPM.” And Mike Martinez, CMO at DMEautomotive, explains, “[PPM] is one of the most powerful loyalty tools at a dealer’s disposal.”

So why isn’t PPM getting the attention it deserves when it comes to customer retention (keeping your customers coming back) and loyalty (getting them to stick)?

A study, which polled 2,194 vehicle owners who had their car serviced over the course of the previous 12 months, found that 56 percent of those participating in a PPM plan are likely to return to the dealership for service even after their plan expires. And for those who used their plan for all maintenance during their contract, 62 percent report they are likely to return after the expiration of their plan.

Average dealer post-warranty retention rates only reach about 22 to 40 percent. PPM programs “can more than double the service business that typically bleeds to the aftermarket,” said Gorun. “Even a PPM plan given away for free would more than pay for itself by the end of its contracted term” due to the likelihood of vehicle repurchase and continued service at the dealership.

Service departments are one of the best ways to not only drive retention but also seize the most wanted (and needed) treasure of dealerships, customer loyalty. And with the rise of technology and shift to the digital world, dealers can finally identify a loyalist, swing loyalist and disloyalist walking through their dealership, and therefore target their most wanted customers.

“In the last 10 years everything has gone electronic and is integrated in to the DMS (dealer management system), it’s all automatic on the back-end side. It makes it very easy for the dealer,” said Gorun.

Using these tools (such as PPM and loyalty plans) is less expensive than traditional advertising and marketing efforts, but also more effective at keeping customers around, said Martinez. And with PPM plans being customizable, dealers can add basically anything their customers want, need or value – ultimately increasing revenue from all ends and lowering costs for the dealer.

In the words of Joe Lescota, Director of Dealer Development for NIADA, PPM plans are a win – win for both dealers and customers. “It’s a great way to keep customers and avoid the high cost of gaining new customers.”

To learn more about the benefits of a Prepaid Maintenance Plan please read, “Prepaid Maintenance Drives Retention, Profits” in Auto Dealer Monthly’s January 2013 issue found here:

Don’t Waste Your Consumer’s Time: Just Give Them What They Want

Tuesday, January 15th, 2013

By: Mike Martinez, Chief Marketing Officer of DMEautomotive

Adapting to the mobile world means more than just doing what looks cool to keep up with the latest mobile technologies – it means knowing exactly WHY and HOW to use these vital channels of communication.

Be honest with yourself – how many times have you thrown QR codes (that checkerboard square looking graphic that consumers can scan with their phone to connect to a webpage, or perform other actions) onto all of your marketing materials ‘cause it’s what the cool kids are doing? It’s gotten kind of ridiculous – I’ve even seen QR codes on busses – like I’m going to run alongside the bus just to scan the QR code?

Dealers that adopt cutting edge technologies like QR codes but then use them everywhere to feed people irrelevant sales messages, or general product and business information, are not only wasting the customer’s time – but also their own time and money.

So how can you be sure that the information you feed consumers is actually of any substance – and therefore adding value to their every day life?

Well strategically choose your channels, and use them wisely.

During the past year, less than a fifth of service customers report having scanned a QR code. And those that did were typically directed to product information or links to a webpage they could have otherwise easily navigated to them themselves. QR codes are a “scan and go” channel – to be used as a way of directing your customers to an immediate call to action – not a fancy way of sending them to your website (and not to mention with an empty purpose).

These simple links to existing pages are a waste of time – if you are going to offer a QR code it needs to provide the consumer with value and functionality that they couldn’t otherwise get just by going to your website. From a direct consumer survey conducted by DMEautomotive, we know that auto service customers are looking for coupons, discounts, store promotions and the ability to schedule online appointments.

And when it comes to mobile apps, twice the number of customers (44%) report using a mobile app versus a QR code, and actually 2 in 3 auto service customers are using them at least once daily, providing more opportunities to embrace this always on consumer behavior. Unlike QR codes, mobile apps provide a constant customer connection.

Mobile app-using customers report accessing coupons, discounts, the latest dealer incentives and rebates the most, with accessing service reminders, vehicle history, and service appointment scheduling following close behind.

It’s the digital age, if you’re not giving the consumer what they want, they’re going to find it somewhere else. And now knee deep into the second wave of technology adoption, its time for dealers to get it right – aligning their offerings with what consumers actually demand and to quit this game of follow the leader.

*Findings are based on a national survey of 2,000+ U.S. vehicle owners conducted by DMEautomotive’s Strategy & Analytics division.

Mike Martinez is Chief Marketing Officer of DMEautomotive, the industry leader in science-based, results-driven automotive marketing that provides a range of marketing services to the biggest and most innovative automotive organizations in the industry. For more information, email


Why Lithia Gains Success in a Digital World

Friday, January 4th, 2013

Check it out!! Digital Dealer’s January 2013 publication features Rob Bennett, General Manager, and Charlie Brown, Internet Director at Lithia Chrysler Jeep Dodge of Eugene, unlocking the secret to success with in their store’s Internet sales strategy.

Lithia Chrysler Jeep Dodge of Eugene is the number one Chrysler Jeep Dodge dealership in sales volume in Oregon, beating out 29 other Chrysler Jeep Dodge dealerships in that state. They sold more than 2000 vehicles over the Internet in 2012 with a 50/50 split between new and used vehicles.

When asked how they drive traffic to their website, Charlie references the DMEautomotive Customer Journey as a key contributor to their success. “We also use DMEautomotive, out of Florida, to produce our newsletter and they are helping contribute to our success in driving up Internet sales leads,” he said. “DMEautomotive also does all of our direct email to customers. We have an extensive email list and they manage that for us very effectively, and that results in a substantial amount of sales leads.”

Discussing the shift to digital advertising, the guys also refer to MyLithia, Lithia’s dealer branded mobile app powered by DMEautomotive. They’ve increased their digital spend by 37 percent and their overall spending for the store is down by 3 percent, due to digital advertising being less expensive than traditional advertising. “We’re spending less to drive more sales,” said Rob.

Read more about Lithia’s Internet and Digital Sales experience at, in Digital Dealer’s January 2013 Cover Story.