Make 2008 your most profitable year ever: Part 2

In my last article I shared with you some of the pros and cons of two marketing methods you’ll be considering in your marketing mix this next year, direct mail and emails to your customers. While both methods have their share of benefits and pitfalls, they are not the only method you’ll be utilizing in 2008 when reaching out to customers. This month, I’d like to focus on the advantages and disadvantages of two other lead generators, automated calls versus live calls, or Business Development Centers (BDC). My hope is that by sharing pros and cons with you for each marketing method, you’ll be able to determine the right marketing mix for maximum success in your dealership this next year.

  Automated Phone Calls: Inexpensive and easy, but personal enough?  

A relatively new component to your marketing arsenal, automated phone calls made their debut just a few years back. Using this system, dealers are able to thank customers, drive promotions and make service reminder calls, all without lifting a finger. Automated calls provide dealerships the ability to reach many consumers with little cost and zero to minimal staff effort, creating a convenient way to stay in touch and add to your bottom line. In fact, while the average no-show rate for a service customer is 30 to 40 percent, a reminder call within 48 hours can drop no-shows to less than 10 percent.  In addition, phone calls may appeal to Baby Boomers more so than texting (SMS). While automated calls are convenient, they aren’t without fault. Many people prefer a live person to an automated voice and are more apt to hang up before the call is through. A very important point that you may not be aware of is that there are different FTC/FCC regulations surrounding automated calls than live calls. If you make automated phone calls, it is important for you to make sure your vendor complies with these regulations.

Let’s look at some of the pros and cons of this medium:

 The Pros:-       An automated call is an immediate way to market or remind customers of appointments or upcoming sales. -       Automated calls create a one-to-one sales channel. -       Call systems are less expensive than BDCs and require little to no labor from your staff. -       Automated reminder calls can lower service no-show rates and increase dealer profits. -       An automated system can be set to call a customer any time of day, improving response rates.-       Contacts can be made immediately to thousands of customers. The Cons:

-       FTC/FCC regulations may limit the number of contacts with your targeted audience.

-       Automated calls are more likely to be ignored than a real person.

-       An automated call system is not as personal as a BDC.

-       Some customers do not prefer an automated call and therefore you must be sure to offer your customers other communication methods.

-       Not necessarily recommended for Internet leads or UPS.

  BDCs: Tried and true, but best for your bottom line?  

While price and ease of use are certainly tempting when looking at an automated calling system, one cannot deny the power of personal interaction that comes from the use of a BDC. BDCs have become a proven method for creating leads in the space and often boast higher response rates than other forms of communication such as email campaigns and direct mail. However, these departments are time intensive requiring continual training due to high turnover rates, extremely expensive to maintain and often call the customer mid-day while they are at work. One of our dealers we spoke with estimated his annual turnover rate is in excess of 300 percent! In addition, it’s expensive to implement and the strength of your brand and customer service is reliant on an employee or outsourced BDC who may not be as knowledgeable as you would like. Let’s delve into some of the benefits and drawbacks of BDCs below:

                              The Pros:

-       BDCs are the ultimate in personalized service.

-       A live person can begin a two-way conversation immediately.

-       BDCs can have high response rates when compared to other forms of marketing.

-       Customers have higher satisfaction due to live person on the line, which they feel is interested in their satisfaction.

The Cons:

-       BDCs are very expensive

-       The training is labor intensive

-       High turnover rates in dealerships mean knowledge walks out the door with employee

-       Calls can only be placed when employees are working, (may be during the dinner hour which can upset customers).

-       Individuals may not have enough industry knowledge, hurting the dealership brand.

-       FTC/FCC regulations may limit the number of contacts with your targeted audience.

While it’s easy to get confused with the vast array of ways to market to your customers, the most important thing to remember is the way a message is delivered is just as important as the message itself. So whether you use an automated call system, BDC, email campaign or direct mail, be respectful of your customer’s preferred method of communication in order to ensure your offer/message is acted upon.

Stay tuned for my final article in our series which will dig into the benefits of new technology tools like blogs and text messages. Good luck!

Digital Dealer, Issue 46
November 15, 2007
Vol. 2 Issue 46