Apr. 6, 2009 – Taking advantage of an unfortunate situation
April 6, 2009
Filed under Features
By Karin Gelschus
The phone kept ringing and ringing with no answer, so the customer looking to get his motorcycle serviced headed down to the dealership, only to find an empty building.
Some customers are being left in the dark after their dealerships have closed permanently as a result of the downturn economy. This unfortunate situation, however, can be an opportunity for existing dealers to increase their customer base, says George Torok, co-author of Secrets of Power Marketing.
“That customer is now inconvenienced because their dealer has gone out of business, and they’re at the easiest point to get attracted to (another dealership),” Torok said. “If you’re the surviving dealer and you’re the first one to step into that space and say, ‘I’m happy to service your (vehicle) here,’ they’re going to be pulled there even if it’s further away from where they were going before.”
Consumers, in most cases, don’t like change, Torok notes, but the transition to a new dealership can be more comfortable if another dealer steps in to help right away. “The businesses that continue to grow are the ones that make life easier for their customers, especially in these times when everyone’s fretting about things,” he said, referring to the economy. “So if (the dealer) can take away some of that fret, it’s going to make the customer feel a little bit better.”
Sterling Doak, creative director of Turn 2 Powersports Marketing, an agency that services the powersports industry, added that while this is a business opportunity for dealers, “Really the most important part is that you don’t disenfranchise the customers once a company goes out of business. It would be in the interest of dealers to work together and make sure that the customers are taken care of first.”
How that can occur and then how that customer is approached are two sensitive issues going forward.
How to reach the customers
The most efficient way to get in touch with the former dealership’s customers is to approach that dealer for his or her mail/e-mail list, says Doak.
“You mend the fences and say, ‘Hey the customers need to get taken care of. How do we figure that out?’” Doak said. “I know a lot of dealers are very competitive. If they can put business aside, I think this is the best way to do it.
“The two dealers really have to work together, get the customers in the know so they realize what’s going on and kind of usher that relationship through. I think it’s a good idea anyway to transition them over.”
Some of these dealers who are closing their business might not have complete customer contact information, which can make it more difficult to market to their customers, says Torok.
“A lot of small businesses don’t have a strong database to begin with,” he adds. “That’s probably one of the reasons the dealer went out of business because they didn’t keep track of names. My dealer who went out of business never sent me a thing like, ‘Hey it’s time for a spring tune up,’ or anything.”
If the dealer hadn’t been good about capturing e-mails, Doak says get the customer list from the vehicles they sold. “I don’t know if they’d sell that to another dealer or be nice enough to give it to them,” he said. “I’m sure some money would change hands.”
If the contact list is unobtainable, there’s another route dealers can take. R.L. Polk provides dealers with a service called the Garage Predictor. It has model data to identify households that likely own specific motorcycles, says Eric Papacek of R.L. Polk.
R.L. Polk captures all the registration data from each state and their DMVs, but due to privacy laws, R.L. Polk only uses that information for marketing and prospecting purposes, says Papacek.
“The Garage Predictor is predicting what each household owns in their garage, so it can be cars, RVs, motorcycles, boats,” Papacek explained. “Then for motorcycles, it’s are you likely to own a motorcycle that’s new or used, domestic or import, Harley, Honda, BMW, etc.? There’s a lot of selection, so if you want to target specific Honda owners who bought their motorcycle more than four years ago, you could do something like that with these types of selections.
“It’s a way to get around not being able to use actual registrations,” he added. “We can’t provide 100 percent accuracy with the registration data anymore so it has to be modeled.”
The only information dealers need to supply is their geographic criteria. “They can choose just specific zip codes if they really know their territory, or they can say, ‘I want to radiate
5-10 miles out from my store location and find the count of likely motorcycle owners within this area,’” Papacek said. “We can run that because we have 100-plus million households with data attached to it to see how many prospects out there who are likely motorcycle owners.”
The standard is about $55 per 1,000 names, Papacek says. Dealers are usually looking for around 1,000-5,000 names.
Once the dealer has contact information, Torok says they must convey a few things about themselves to the new prospects.
“No. 1, their competence and credibility, that might be the number of years they’ve been in business, the awards they have or special training they do for their people,” he noted. “No. 2, they need to demonstrate they can be trusted. The best way to demonstrate trust is with testimonials from existing clients.”
The third thing Torok says dealers need to demonstrate is that their dealership is stable. “The prospects just lost their business, so now they’re thinking is this guy going to go out of business too?” he said. “That doesn’t mean (dealers) have to open up their financial statements.”
However, stating that things are not changing at the dealership isn’t a bad message to send in this time. “Another way is to go just the opposite and say, ‘We are growing, making investments,” Torok said, noting the route the dealer should take depends on how stable the dealership really is.
No matter which direction the dealer decides, Torok says they must be welcoming.
“Say, ‘Hey, come on in. Have you been here before? No problem. You’ve been dealing with the dealer down the road, sorry to see him go.’ You always have to be aware and appreciate the feelings and emotions of your prospects and clients.”
Torok notes that’s as far as a dealer needs to go to show sympathy toward the customer losing his or her other dealership. “What you do have to do is not say bad things about those people, the people who went out of business. Your prospects coming in will notice,” he said. “You always have to be aware of the emotions that are driving them.”