The Top 12 Companies to Watch in 2012

Twelve Hot Digital Companies that are Helping Dealers Dramatically Improve Their Profitability

Over the last three years, as a result of the recession, our industry has experienced some growing pains. Just as demand began to rise, the industry’s economic woes were met with the wrath of Mother Nature when the earthquake and tsunami hit Japan, taking a toll on the production plants that feed the inventories of dealerships across the country. Despite the difficulties, most dealers have weathered the storm, cut costs and increased efficiencies to stay afloat. The best dealers have remained strong and are now benefiting from increased demand, revenue and profits with leaner organizations that are enjoying the newfound demand in the recovering market. After years of playing defense, signs of a recovering economy are motivating many of the top dealers to start playing offense, and it’s paying off in record profits for 2011 – setting the stage for a big 2012.

The most profitable dealers are getting more aggressive in 2012 and are utilizing innovative digital strategies to attract, sell, service and retain more of their customers in a way that is more profitable. Many of these dealers have either created new technologies or utilized other companies’ technologies to improve their business. This feature showcases the Top 12 Companies in 2012 that are helping dealers increase their profits by driving down costs and driving up revenue.

In this feature you will learn about marketing companies combining the power of traditional and digital marketing to deliver a consistent message through all tiers of marketing, including mobile and social media marketing strategies, Search Engine Marketing (SEM) and Video Search Engine Optimization (VSEO). You will also learn about group buying services that are dealer friendly, ways to use an iPad to increase your dealership’s closing ratio and average gross profit, and CSI and retention strategies that increase sales and service loyalty and frequency. This article also profiles companies that help dealers monitor all their advertising, as well as their customer service practices via the phone. This is done throughout all departments of the dealership to help management improve upon best practices and close more deals.

Chrome

Since most consumers use the Internet to research and shop for vehicles, now more than ever it is essential for the auto industry to provide accurate and timely information across all segments of the industry from OEMs and lenders to retail dealers and industry solution providers. Nothing is more detrimental than inaccurate data. Whether it’s incorrect financing terms or vehicle features and pricing, bad information does not sit well with consumers, and tips the “reliability scale” unfavorably for an industry that has historically struggled to improve its reputation for honest dealings, reliability and transparency.

Recently, two leading and highly reputable data service providers announced they will be joining forces to provide unparalleled industry leading data solutions to the automotive market: Chrome Systems Inc., a DealerTrack company, and Autodata Solutions, Inc., a division of

Internet Brands.

Chrome Data Solutions’ mission is to be the best-in-class automotive content provider in North America with the resources and vision to grow in the global market.

Both Autodata and Chrome Systems have an established trusted legacy of more than two decades of delivering high-quality offerings to all segments of the automotive industry. The establishment of the 50/50 joint venture will leverage the best assets of both organizations to provide the automotive retail industry – including Internet portals, OEMs, lenders, dealers and solution providers – a one-stop-shop for vehicle data and content so customers reach their growth and profitability goals even faster.

The new entity will have expanded alternatives and a wider selection of services and content to choose from. It will provide a broad spectrum of vehicle data and content related offerings ranging from syndicated commercial off-the-shelf products for automotive retailers to custom design-and-build engagements for large enterprise clients, while spurring future automotive data innovations and offerings. The timing of this joint venture could not be better as dealers are increasingly pressing their suppliers to deploy more content-rich online services to entice consumers and get highly qualified buyers.

Greg Perrier of Autodata will be the Chief Executive Officer for Chrome Data Solutions. The current senior leadership teams of Autodata and Chrome will continue in their leadership roles, and will report directly to Perrier.

Car-mercial

Since more than 90 percent of car buyers use search engines to shop for vehicles, dealers and car companies are spending a lot of money on Search Engine Marketing (SEM). This allows them to appear on top of the first-page search results for the most popular phrases customers are looking for on search engines like Google, Yahoo and Bing. To save money, many successful dealers have invested in SEO – Search Engine Optimization, a fancy phrase for the process of trying to appear on top of the search results for free. In the early days, this was a lot easier when there weren’t a lot of manufacturers, dealers and third-party lead providers competing for the top 10 search results for popular phrases like “New York Honda.” Now-a-days, most dealers realize that appearing on top of Page One of Google for popular search phrases can allow you to siphon the demand out of the market at the very point when the customer wants to buy. This has caused a bidding war for top search phrases and a lot of dealer investment to optimize their Websites to appear for free.

A big break came when Google announced that it would give video search results 55x the search authority over text, because customers prefer video over text more than half the time. The first company to recognize this opportunity was Car-mercial, the pioneers of Video Search Engine Optimization (VSEO), and that is why they are a Top 12 Company to watch. In short,

Car-mercial helps dealers appear on top of the search engines with positive videos that promote their dealership and the vehicles they sell. Through VSEO, Car-mercial dealers dominate the search results with positive videos while also removing third-party lead providers and competing dealers from the most important Page One rankings. These videos also protect and promote their positive reputation so customers looking for a car in their market find videos that educate them about the benefits of doing business with the dealership along with attractive offers that drive traffic to their Website, phone and showroom. “We call it ‘targeted TV’ because we deliver targeted videos directly to customers who are actively searching for the car that the video is about,” said Karry Moore, co-owner of Car-mercial.com.

Team Velocity Marketing

Since the majority of consumers shop online and are being divided among hundreds of television and radio stations, the value of traditional marketing has dramatically decreased in recent years, causing dealers to seek more effective ways to attract more customers for less cost. Team Velocity Marketing is one of the Top 12 because many of the top dealers are using their new 360 Sales & Service Marketing system to attract, sell and service more customers for less cost than traditional mass marketing.

Team Velocity’s system helps dealers identify their “Perfect Prospects,” which they define as those consumers who have the highest statistical probability of buying and servicing now and in the future, thus generating the most lifetime revenue and return on a dealer advertising investment. Once a dealer identifies perfect prospects within their market each quarter, they implement an integrated campaign through search marketing, email, text, calls and direct mail with custom offers that relate exactly to the customer’s needs at that moment, while also promoting all of the dealership’s profit centers: new, used, finance, service and parts. These perfect prospects receive “perfect offers” based on where they are in the ownership cycle of their vehicle, whether they are eligible to upgrade into a new vehicle for the same payment, need a major service, or their warranty is about to expire. Customers are driven to a campaign

Website that provides more information on the offers, captures their e-mail and drives them to call and visit the dealership. When customers arrive at the dealership, the POS merchandising validates all the marketing messaging they have received up to that point with posters, hang tags, table toppers and window clings. After they take delivery, Team Velocity communicates with the customer through a 360 communication process that starts with “Thank You for Buying” and continues through service reminders, sales promotions, lease renewals, equity alerts and custom offers that bring customers back more often to spend more money. The company has helped their dealers increase market share, profits, CSI and loyalty while also experiencing over 400 percent growth themselves. “We had four consecutive record-breaking months in a row this year, our sales are up 45 percent year to date, and we’ve moved into the top 20 for Hyundai dealers nationally” said Roosevelt May, General Manager of Huffines Hyundai of Plano, Texas.

OfferLogix

Car buying today is much easier than it was 10 years ago, and information that was once only available to the dealer is now easily accessible to consumers on the Web. Statistics show that in 90 percent of car deals, financing is involved and the lowest possible payment is the customer’s goal. The ability to find the right car with the preferred options and knowing what is a fair deal on that car is within easy reach for consumers. With a little research, consumers can figure out what the dealer paid for the car, as well as any other rebates and specials that apply. Even with all of this information, for the customer, it all comes down to the monthly payment.

Recognizing this, dealers are implementing the latest technology and services to provide consumers with information in a format they understand. Whereas most new car dealers advertise payments on their Websites, they are usually accompanied with small print, relate to a specific vehicle, and are attached a certain MSRP.

OfferLogix is the pioneer and premier provider of dynamic lease and loan payment advertising for online and mobile applications and works with many different companies to deliver this functionality. With proprietary technology and a unique Web service, they automatically calculate each night on all qualifying inventory and all possible lease and loan payments, with proper legal disclosures, based on a dealer’s lender guidelines.

Dealers must eliminate the confusion, inaccuracy and disconnects that exist between the vehicle, the customer and the monthly payment. Solutions that provide accurate pricing and budget information will make it easier for consumers to make educated buying decisions.

Dealers can advertise accurate payments on inventory, vehicle listings, vehicle detail pages, mobile applications from a VIN or QR Code Scans, as well as offer “search by payment” and show captive finance programs for inventory – all dramatically increasing click-thru rates and leading to more sales.

Dealers also integrate this technology into their mobile apps, with some dealers allowing customers to use their smartphones to scan a vehicle’s unique serial number or a bar code on the window, giving the customer immediate price and payments, which shows transparency in the process and saves time.

SocialDealer

Facebook alone has more than 800 million users who spend more time online than on any other Website in history. Since the primary goal of marketing is to be where consumers are, it would be a critical error not to have a strong presence on the social networks. Dealers cannot take their time catching up with this shift in consumer behavior as they did with the Internet.

Dealers can’t just simply subscribe to Facebook, Twitter, YouTube, and other social media outlets and think that is an effective social media strategy. Dealers are using social media networks like Facebook to attract, sell and service more customers by connecting with them online and communicating with them for free. Some of the best dealers have built a network of hundreds of social media sites that enable them to promote all their profit centers to thousands of customers for free.

Social Dealer’s social marketing platform helps dealers create, distribute, manage and monitor their entire social media strategy and reputation through one easy-to-use tool. By increasing their social reach, dealers increase the number of prospects they can market to with promotions and offers that drive traffic, sales and service revenue. When handled properly, social media is a free channel of communication that can get better response rates than traditional media, but when handled poorly, it can generate a lot of negative response.

Dealers are using Social Dealer to communicate with their customers in real-time, targeting in-market prospects, attracting new talent and leveraging their employees’ social media networks to communicate with their friends and family as well. The average person has 180 friends online and if a dealership has 100 employees they can reach 18,000 people for free.

The only problem is that dealers don’t have the resources to have dedicated staff manage multiple social sites, manually post content and monitor all the opportunities to sell when they arise. That is why dealers are leveraging Social Dealer’s automated system to distribute, manage and monitor content and to receive alerts whenever someone interacts with one of their social sites. “The system allows a dealer to automate what a team of 20 dedicated people could not do,” said Phil Penton from Social Dealer.

GroupCars

One of the biggest complaints car buyers have is the hassle of buying a car. One of the biggest complaints dealers have is the high cost of low-quality leads with low-closing ratios and gross profits. GroupCars’ new dealership marketing system helps customers shop on their cell phones and the Web with the help of a trusted auto advocate who schedules appointments that have up to 50 percent closing ratios with certified dealers exclusively.

GroupCars works with media companies and affinity groups to provide a world-class buying program that directs them to certified dealers who agree to treat them right, rather than shot-gunning the same lead to multiple dealers which results in the same old hassle for customers and dealers being limited to a price tag only. GroupCars gives certified dealers exclusive access to in-market customers who are looking for an easier way to buy a vehicle for a fair price without the hassle. One of the things that customers love about GroupCars is their top-rated patent-pending auto mobile app,

CarFactor, because it helps them shop and buy from the palm of their hand. CarFactor is being rebranded as the GroupCars app and it has enhanced features including a patent-pending scanner that can deliver valuable information on any new car from the bar code on the MSRP.

How it Works:

1. The customer uses the mobile app or Website to research and select their vehicle.

2. The dedicated phone center advocate schedules an appointment for the customer to meet with a program manager at a participating dealership.

3. Upon arrival to the dealership, the customer checks in and gets the fair price from the designated program manager who uses the GroupCars mobile app to get the program prices on a vehicle in stock.

The process delivers a hassle-free 60-minute purchase experience that customers love so they are more likely to spend more, return more and refer more. Dealers love the program because they get exclusive access to high quality appointments that have a high-closing ratio at a fair price and gross profit.

IntellaCar

One of the reasons Apple is one of the most profitable companies in the world is the experience they create in their innovative retail stores where their self-described “geniuses” are available to answer any question you have, and if they can’t deliver it off the top of their head they are a few clicks away from the right answer on their iPad. Unfortunately, car buyers are using these iPads and other digital shopping tools on the Internet and their  phones before they visit the dealership and too often they know more about the product and pricing than the salesperson they are dealing with – let’s just say that this does not make them look as smart as the geniuses in the Apple store.

One of today’s growing challenges for dealers is the increasing knowledge gap between customers with extensive information and high expectations, and sales personnel who are often not up to speed with facts about the latest and greatest technology in the vehicles they are selling. To make matters worse, the high turnover of sales staff make it even harder for dealers to keep their sales teams up to date. Wouldn’t it be great if there was an app for that?

Well, IntellaCar has made it into the Top 12 this year because they are turning product knowledge dummies into innovative geniuses who may not have all the answers but they know where to get them – on IntellaCar’s iPad sales tool. IntellaCar is a mobile sales platform built to equip sales consultants with easy to use iPad tools that assists them throughout the sales process by helping them gather customer information, fact find, select and present the right vehicle based on a customer’s needs.

The dealers who are using Intellacar’s new iPad sales tool are touting improved closing ratios, average gross profits, CSI, and claim that customers love the new, more innovative way to quickly access accurate information at the dealership. I must say that when you walk into a store and the sales reps are actively using iPads to educate customers it’s impressive, just like the Apple store experience.

BusinessRater

Dealers spend a lot of money on advertising to build their brand and, unfortunately, a lot of customers who search for the dealerships name online find negative reviews that destroy their reputation with one click of the mouse. Although that one review does not represent the opinion of most of the dealer’s satisfied customers, it unfortunately can appear that way to consumers who read negative reviews.

The reason why BusinessRater.com is one of the Top 12 Companies to watch is because they are giving businesses, including car dealers, a plan, process and tools to help them deliver a better customer experience that will improve their sales and service reviews and reputation online while also giving them reports on what advertising is working best.

BusinessRater.com certifies dealers who agree to invite their customers to tell them how they can deliver a 5-Star experience. Certified dealers use POS merchandising that says, “Help us give you 5-Star service and Win a Free Car by filling out a survey that helps us serve you better.” After customers complete the survey and review, management is alerted on their cell phone so they can immediately thank the customer and address any issues they may have before the customer leaves the dealer. If it is a 5-Stars review, it is immediately syndicated on the dealer’s Website and social networks, and is optimized to appear on top of the search engines like Google and Yahoo for many of the most popular search phrases that consumers use to shop for a car. If a customer indicates they did not receive a 5-Star experience, management is alerted to can make things right before it becomes a CSI issue. They have a 10-day grace period to address any issues before the review is public.

Since most customers are happy, this process results in a lot of positive reviews and consumer feedback reflecting a great online reputation. And to prevent fraudulent reviews, BusinessRater.com uses a patent-pending filter process that confirms the validity of every customer review to ensure it is credible before it is published. If a review fails the process it is permanently filtered in the system.

As a result, dealers attract more customers who trust these reviews that appear on top of search results for your dealership name and the most popular search phrases consumers use to shop for cars, service and financing. They also enjoy a higher closing ratio and average gross because of the trust that results from an endorsement from other customers who live in their neighborhoods.

DrivingLoyalty.com

How to keep a first-time purchaser and turn them into a lifelong customer that returns more, spends more and refers more is often the elusive question on every dealers mind, and if it’s not, it should be.

DrivingLoyalty.com helps dealers identify and contact the best prospects in their database who can upgrade into the same car for the same or lower payment and alerts the customer by e-mail, text, mail and phone to bring them into the dealership. Here they can view a Vehicle Analysis that shows them the advantages of upgrading into a new or pre-owned vehicle with more features, better gas mileage, lower payment and overall cost of ownership.

Customers receive a print and online monthly vehicle statement that provides alerts about everything their vehicle needs and qualifies for including recalls, service reminders, equity alerts, lease renewals and upgrade offers that enable them to get a new car for the same or lower payment.

Participating dealers have increased their loyalty and frequency of sales to their customer base for higher gross profits because they bring customers into their dealership before they shop. This also helps them source better pre-owned vehicles for less cost than at auction, and all of those used cars generate service revenue as part of their reconditioning process. As a result, dealers using DrivingLoyalty.com have increased their new and used vehicle sales and profits, while also increasing service revenue and retention.

Tier 10 Marketing

Dealers spend too much money working with too many vendors on disconnected ad campaigns that are often confusing for customers and dealership staff. TV and radio commercials tout one message, and newspaper, direct mail and e-mails claim another, yet none of the above can be found on a dealership’s Website or showroom floor.

Many of the most successful dealers in the country – Penske, Paragon, Hendrick and others – are working with Tier 10 Marketing to implement integrated marketing strategies that promote all of their profit centers – new, used, finance, service and parts – with a consistent message delivered through all 10 tiers of marketing: traditional, digital, mobile, social, reputation management, publicity, targeted direct mail, niche marketing, merchandising and retention.

One of Tier 10’s most impressive accomplishments is that they are the ad agency that made Paragon Automotive No. 1 in every brand they represent – Honda, Acura and Certified Pre-Owned vehicles. When Paragon began working with Tier 10, their best month was 36^th in the country with Acura, and 17th with Honda. Within nine months, both stores were No. 1 in combined new and CPO sales in the country and have remained on top for over a year, while also setting records for profitability, CSI and customer loyalty. “We were spending way too much money with 15 different companies who had completely different strategies, messages, look and feel, and now we work with one company who ties it all together with one integrated approach. I spend less, make more and it works,” said Brian Benstock, co-owner of Paragon

Honda & Acura in Queens, NY. As a top 20 dealer, Paragon was far from broken, but Teddy Nissan opened after Ted Bessen bought the store when it was only selling 28 cars a month in 2009. Six months later, Teddy was selling more than 250 cars a month and had already paid off the initial investment of the store. One thing is for sure, dealers who have an integrated marketing strategy that connects their traditional advertising with the other nine tiers can spend less money to attract, sell and retain more customers.

DealerApp Vantage

More than 93 percent of Americans have a mobile phone and many of the best dealers are giving their customers free mobile apps to improve their customer satisfaction and loyalty. Today, there is an app for almost everything from counting down the minutes in each day to tracking favorite sports teams and everything in between. DealerApp Vantage is a Top 12 Company to watch because they are the creators of the most popular automotive mobile application that dealers use to retain and resell their customers for very little money.

Although DealerAppVantage.com works with many of  the leading dealerships in the world, including Longo Toyota (No. 1 Toyota dealer), JM Lexus (No. 1 Lexus Dealer), Paragon Honda & Acura (No. 1 Honda & Acura dealer), and others, they are not known by consumers because they customize their application under the dealer’s brand.

Dealers give their customers a free auto app that is branded for their dealership and is a unique benefit that differentiates them from their competitors. DealerApp Vantage has become popular because it includes a lot of features that customers and dealers both love. The customers love that they have an easy-to-use mobile app that includes Roadside Assistance, Parking Meter Alert, a Car-finder to help customers find their cars in crowded parking lots and a Gas Savings Navigator that helps customers find the lowest-priced gas station. Dealers love the app because it gives them a free channel to market to customers with service reminders and sales promotions and it gives customers a faster and easier way to contact their dealer, schedule service, buy parts, get vehicle quotes, or view dealer inventory and specials. Dealers have had a lot of success with mobile marketing because a lot more customers read their text and pop-up messages on their phone rather than read e-mails.

Unlike most apps, DealerApp Vantage refrains from 3^rd party advertising on your app – no competitor pop-up ads – and they customize the app to fit your dealership’s particular brand so your app doesn’t look like anyone else’s. Most dealers are giving these free apps to all their customers in sales and service – and some are even giving them to prospects – as a gift, because it gives them a free channel to send special offers in the future.

CallRevu

“The phone is a blind spot in the dealership where customers and profits are lost in every department, every hour, of every business day. What is the inevitable next move for a customer who can’t get through or get answers – they call the competition and buy elsewhere,” said Chip King, owner of CallRevu and the publisher of the 2011 Phone Performance Report that reveals trends that were measured by listening to more than 1 million inbound dealership calls. According to the report, a third of all calls are forwarded to voice mail, and are too often not checked or followed up with. “When we first started measuring, we found more than 30 percent of our callers were going to voice mail and hanging up on hold” Steve Risso, President of Teddy Nissan. “We made the corrections and now less than 9 percent go to voice mail

– it was huge!”

CallRevu is one of the Top 12 Companies to watch because they are helping dealers like Rick Case, SoCal Penske, Germain and others use the phone to improve their customer experience and profits. “We save multiple deals a week from the alerts CallRevu sends to our managers whenever a customer is mishandled,” said Richard Bustillo, GM of Rick Case Honda, one of the top Honda dealers in the world. “CallRevu monitors every call that comes into a dealership with live call center operators who score all the calls, and alerts management whenever a customer is mishandled or when someone needs training.”

“We use CallRevu to improve our customer experience by using their weekly and monthly reports to track our advertising, people, processes and appointments so we can ensure that every customer call is handled correctly,” said Bustillo. “CallRevu has turned the call tracking business upside down by giving dealers free ad tracking numbers as a part of their service while providing more accurate ad tracking and alerts that help dealers save deals and improve the customer experience over the phone. My previous call tracking system gave us inaccurate information about our ad sources because many customers who see our ads then go to our Website for information and call the number on the site which gives the Website credit for the call when it was another medium that brought them there. Since CallRevu listens to each call they capture the correct ad source, as the customer refers to the specific vehicle they saw on AutoTrader or the newspaper. They also track our appointment rates by staff, store, region and nation so everyone knows where they stand. There’s no doubt that CallRevu is a game changer for 2012.”

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Dealer Brian Benstock of Paragon Honda in New York City wasn’t about to let poor consumer reviews of the next-generation Honda Civic compact get in the way of a crucial product launch.

When the car arrived in April, Benstock had his own Civic marketing campaign ready to complement Honda’s marketing materials.

Benstock had his marketing consultant make a video for the new Civic, focusing on the car’s 40-year heritage.

To counter the poor reviews, he touted the nearly 150 changes that Honda has made to the car over the past four years — not just this year’s redesign — while using strong residuals to offer Civic owners the same or lower monthly payments if they traded in their older models for a new one.

Paragon spent $5,000 on the video. And it is spending $25,000 monthly for digital and traditional marketing on the Civic campaign.

The strategy has worked. Civic sales since this spring, or buyers brought to the showroom by the Civic, have powered Paragon to among the best-selling Honda new- and used-car dealerships in the country.

Paragon expects new-car sales this year to hit 5,000, up 20 percent from 2010, despite vehicle shortages this year because of the March earthquake and tsunami in Japan that crimped production, Benstock, said.

Through 11 months this year, Honda brand sales fell 5 percent in the United States.

“The new Civic got some knocks from the critics so we decided to do our own campaign,” he said. “It’s a shame, but when Honda triples it gets booed for not hitting a home run.”

Attractive trade-in
The hallmark of Paragon’s campaign is the trade-in offer, which Paragon calls the Civic Upgrade Program.

When Honda launched the redesigned Civic in April, Paragon sent cards and e-mails to 87,000 local Honda owners who had bought their vehicles from the store or were likely to buy a new car because their lease was expiring soon or for other reasons. Paragon Honda is in the borough of Queens.

Under the program, a large percentage of those owners could buy a new 2012 Civic for a monthly payment equal to or lower than their existing one if they traded in their vehicles, said Paragon consultant Sean Wolfington.

Wolfington owns Tier10Marketing.com, an automotive and entertainment marketing company in Key Biscayne, Fla.

Besides selling more Civics, the Civic Upgrade Program had two additional benefits: It brought in lots of used Hondas that Paragon could resell as certified pre-owned vehicles, Benstock said.

And Paragon was able to put previous Civic owners in Honda Accord sedans or other Hondas when they came in looking for a deal on a 2012 Civic, he said.

The new Civic “brought people in, and we were able to walk them up for $20 more a month into a new Accord,” he said.

Negative reviews
Paragon burnished the new Civic’s image to help counteract negative reviews from Consumer Reports and others that panned the vehicle for cheap interior materials.

In its brochures, ads and marketing materials, Paragon focused on the refinements Honda has made to the model since 2007.

The video, produced by Tier10Marketing.com, speaks to the 40 years of service provided by the Civic in America, Wolfington said. It went viral shortly after launching on YouTube.

But the dealership eventually took it down over authorization questions raised over the use of some nostalgic Civic photos.

“The Civic’s a bulletproof car and extremely important model for us,” Benstock said. “We can’t afford a down year. That doesn’t pay the bills.”

Learn how Paragon got the Triple Crown for selling more Hondas, Acuras and Certified Pre-Owned vehicles than any other dealer in the world

It is extremely difficult to increase market share ranking among the top 20 Honda and Acura dealers in the country. Paragon has managed to move up in market share for both brands, from #17 to #1 in Honda New and Used and #36 to #1 for Acura New and Used, and became the #1 Certified Pre-Owned Dealer of the Year in 2010 by selling over 4,000 Certified Pre-Owned. Paragon continues to break records, selling 338 in CPO last month – an all-time Honda CPO record.

Before becoming the largest volume Honda & Acura retailer in the world, Paragon was spending a lot of money with a lot of companies to attract customers that were not always the right customers. By casting a broad net with mass marketing they attracted some customers that were not as profitable as others because they had a low probability of returning for service and repeat sales. These customers cost more to attract, but generated less long term profit, so in the end Paragon spent too much to reach the 15+ million consumers across New York City that were not as profitable as the customers in their own backyard who have a higher loyalty and lifetime value.

“We used to pride ourselves on selling customers from across the entire city and state, but after analyzing our numbers we learned those customers are usually not as profitable and not loyal because it’s difficult to retain them for service and repeat sales,” says Brian Benstock, VP and General Manager of Paragon Honda and Acura.

Another problem that Paragon faced was working with multiple vendors that had different messages and often competing strategies that were not integrated and confused not only the customers, but also the employees.

Paragon increased their market share and more importantly their profitability when they implemented a new integrated marketing strategy to deliver the right consistent message across multiple mediums that included their traditional advertising, digital marketing, targeted email and direct mail, public relations, social media, niche marketing, and merchandising, “so the message that customers receive is the same whether it’s seen on television, heard on the radio, viewed online or on the showroom floor,” says Benstock. “Our results went through the roof when we implemented one integrated marketing strategy to attract in-market consumers to buy and service with our dealership and our team works very hard to attempt to deliver a world-class customer experience that has improved our customer satisfaction and loyalty.”

One example of Paragon’s cohesive marketing strategy is how they aggressively capitalized on the 9^th generation launch of the new 2012 Honda Civic. The launch of the 2012 Civic was the biggest new vehicle launch in American Honda history and Honda spent a substantial amount of money to drive Civic customers into the market and Paragon leveraged this launch to attract those consumers into their showroom.

Paragon’s Civic launch campaign, like all their marketing strategies, was a comprehensive integrated campaign across multiple tiers including traditional advertising, targeted email and direct mail to in-market civic owners, search engine marketing, digital, social media, publicity and merchandising.

First, Paragon performed in-depth market research to identify perfect prospects for the new Honda Civic which included current Civic owners and consumers driving models that had a high statistical probability of crossing over into a civic, like the Toyota Corolla.

Next, Paragon sought to contact these consumers to notify them about the Honda Civic Upgrade Program via direct mail, email and text. The campaign message offered buyers additional trade value for their current vehicle and the same or lower monthly payment to upgrade to a brand new 2012 Honda Civic with multiple enhancements. The campaign drove customers to a campaign web site that provided an upgrade calculator that compared their current car to the new Civic, and displayed all the upgrades and improvements of the new Civic compared to their current vehicle, as well as, how much money they would save in gas with the new Civic monthly, annually and over a five year period. “A typical consumer can trade-up from a 2007 to a 2012 with over a hundred new vehicle feature enhancements while saving thousands of dollars in gas – a fact based value proposition that is hard to resist,” said Sean Wolfington, owner of www.Tier10Marketing.com, the marketing company that Paragon works with to implement their integrated marketing strategy.

Paragon also implemented a social media campaign that featured a viral video, the 2012 Honda Civic “Heritage” Video that invited Honda owners to tell their story about how their Civic has impacted their lives. The winner of the Tell Your Story campaign would win recognition and possibly win a new Civic. The viral video was a big success with over 45,000 views in less over a months’ time.

While Paragon has executed the basics better than their competitors by targeting and marketing to consumers with integrated campaigns that are consistent and credible they have also blazed trails and innovated in ways other dealerships have not, including an aggressive Latino marketing strategy. Paragon has worked with Univision through their television, radio and online channels to reach the growing Latino population who have proven to pay more, refer more and to return more often compared to traditional consumers. In addition, Paragon has implemented a new “Vehicle Exchange Program” in their service department that has resulted in 75-100 additional sales a month out of their service isle. “The Vehicle Exchange Program makes it easier for consumers to get into a new vehicle for the same or lower monthly payment and Paragon can give their customers a vehicle analysis that compares their old vehicle to the new vehicle, highlighting all the enhancements that are in the new model along with estimated gas savings on a monthly and annual basis by upgrading to the newer vehicle,” explains Wolfington.

Paragon has also delved into the future with digital signage that reveals what the dealership of the future will look like with video walls showcasing new products, plasma presentations that emphasize the unique advantages of doing business with Paragon in both sales and service, and even broadcasting a closed-circuit television station that customers watch while waiting for their vehicles to be serviced. These televised broadcasts feature positive programming and videos about Paragon’s vehicles, like their Certified Pre-Owned Program, as well as, educational videos on how to better maintain their vehicle, as opposed to what many dealerships offer – traditional television featuring Jerry Springer, interrupted by ads from their local competitors. Paragon’s digital signage is also complimented by Apple computers on every desk and iPads for all sales staff to engage and help educate the customer on the value of doing business with Paragon and the products and services they offer.

Paragon is successful because of their unique and aggressive style to capture the moment – seize the opportunity. They perform diligent research of in-market consumers, they reach out to consumers with integrated campaigns, and they innovate where other dealerships do not, like through Latin marketing or selling cars out of their service lanes, as well as, leveraging technology throughout all of their departments to create a better customer experience and increase their profitability. Paragon has one strategy and one message that is integrated throughout multiple tiers and they have been able to grow their business profitably by attracting more high quality customers that pay more and return more often, but cost less money to acquire. As a result, they have become the #1 Honda & Acura retailer during the same year that they sold more Certified Pre-Owned vehicles than any other retailer in the world.

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How Penske Honda of Ontario went from 24th to 10th in 8 months

After changing their marketing strategy, Penske Honda of Ontario, CA, jumped from 24th to 10th in the highly competitive Southern California region, one of the most competitive regions in the country.

Since the fall of 2010, when Penske Honda of Ontario changed up their marketing strategy, their sales are up 20 percent over the same period last year, and are up 154 percent year to date over 2010 – jumping 14 spots in regional manufacturer rankings.

At the time, Penske was relying a lot on traditional mass marketing that was increasing in cost and shrinking in results. After reviewing the dealership’s ad tracking numbers it became clear that a lot of the mass marketing was not generating calls and business for sales or service.

Research: “We used to spend more of our ad budget on mass marketing for TV, radio and print, but our market research showed that the majority of our business comes from a localized area,” says Roger Penske, Jr., owner of Penske Honda of Ontario. “The goal is clear, we want to target those consumers living in our primary marketing area who are in the market to buy or service their vehicles with us,” Penske, Jr. says.

“Ultimately this saves us money. We used to spend a lot of money advertising to people who were simply not in the market for what we sell and not even in our primary marketing area, so the chances of them buying or servicing with us were slim,” says Gaby Katrib, general manager of the Penske Honda of Ontario store.

The first step the dealership took was to conduct extensive market research that helped Penske identify the consumers in their market that have the best chances of spending more and coming back more often. “By using manufacturer research, R.L. Polk market data, historic sales and service data from their DMS and a few other databases it was possible to identify what we call the “perfect prospects” who have the highest statistical probability of buying and servicing today and returning tomorrow,” said Sean Wolfington, owner of www.Tier10Marketing.com, the marketing company Penske hired to help them implement their new marketing strategy

Market where Consumers Shop – The Internet With over 90% of today’s Honda consumers using the web to research, Penske has implemented an in-depth digital marketing strategy that includes search engine optimization, display banner ads, email and text marketing, social media and reputation management. When consumers look for the vehicles Penske sells in their market they find them on the top of the leading search engines like Google, Bing, and Yahoo. “When customers search for a dealers name or their town and brand on Google the first thing they will see is Google Places – a map of the store along with the dealerships review rating from 1-5 stars,” said Wolfington. “It is imperative for the dealership to have a high star rating or they could lose business in the short term and their reputation in the long term.” Penske has implemented a detailed reputation management strategy that helped them achieve a 5 star rating that every customer sees when they search their name on Google. “The new word of mouth reaches thousands of consumers who search for a dealer’s name so reputation management is essential to a dealer’s strategy,” added Wolfington.

Penske also has a very active social media marketing strategy with a custom Facebook, twitter and YouTube page with active friends and followers. “The Penske brand is perfect for social media because it is a name people trust and consumers are interested in their race team and Roger himself,” says Wolfington. The entire dealership group utilizes social media to connect with their customers and to build a larger database they can use to communicate for free in the future when there is an attractive promotion or an important sales objective they need to make.
Penske implemented an intelligent targeted marketing strategy that communicates with all in-market Honda consumers by sending custom offers based on exactly where they are in the ownership cycle of their vehicle, and level of service activity with the dealership. Penske sends custom campaigns via targeted direct mail and email with customized offers based on their vehicle’s mileage that promote all their profit centers, new, used, finance, service and parts.

“We use our data to send the right offers to the right customer at the right time,” says Roger Penske, Jr. “If a customer is driving a 3 year old vehicle that has equity we will send both a sales and service offer so it generates business either way. All our campaigns have the same clear message and theme throughout all our marketing mediums, so our digital ads, social media, targeted mail and email all relay the same cohesive messaging,” he notes.

“Penske’s communication strategy starts after they take delivery and continues throughout their ownership cycle until they buy another vehicle. Each customer receives a thank you letter and email, introduction to service, information about accessories, service reminders, lease renewals, equity alerts and an invitation to upgrade their old vehicle when they can get a new one for the same payment, explains Budd Blackburn of www.TeamVelocityMarketing.com, the targeted marketing company Penske Honda uses. Penske’s regular communications keep their active customers coming back more frequently and activates their less active customers with more aggressive service offers to lure them back to the dealership. As a result, Penske increased their customer retention rate by 76 percent and have improved both their sales and service revenue.

Penske is known for excellence and Roger sets the bar high for his employees to maintain a superior level of customer service. “We conduct ourselves with the highest standards of professional ethics, honesty and integrity,” says Katrib. With the majority of all leads coming in via the phone, Penske Honda has made many efforts to ensure those calls are converted into appointments that show up to the dealership.
To ensure all incoming calls are handled properly, Penske Honda monitors, tracks and transcribes every inbound call and managers receive instant mobile alerts whenever a call is mishandled or needs escalation to management. Additionally, managers receive daily, weekly and monthly reports that help them manage their appointments and track their advertising based on which source generates the most appointments for the dealership. As a result, their appointments have increased and they are spending their advertising more effectively with mediums that generate the most appointments. “Without listening to calls you can’t accurately track what ad sources work well because many consumers will view the paper or a mailer, visit the dealer’s website and call the 800 number on the site. The dealer thinks the source is the website when in reality it was the print campaign that generated the call,” said Chip
King, president of www.CallRevu.co, the call monitoring company Penske uses. “The most important number to track is not how many calls each ad source generates, but how many appointments each source generates. Two sources could generate a hundred calls but one has a 50% appointment rate and the other 25%, thus half the total appointments. It is more effective to judge marketing by appointments generated rather than calls because this indicates the results and return on investment better.”

Penske Racing has done very well on the track this season and Penske Honda has also improved their position rapidly in a highly competitive market in Southern California. Their integrated marketing strategies that combine traditional and digital advertising has helped them grow a lot in a little time and their competitive desire to constantly improve will surely help them grow even more in the future.

The Bottom Line

Penske Honda of Ontario jumps from 24th to 10th in the highly competitive Southern California market; sales are up 154 percent year to date and they have increased customer retention by 76 percent.

What They Do:

1. Use extensive market research to identify consumers that have the highest statistical probability of doing business with their dealership now and in the future.
2. Use integrated campaigns throughout multiple marketing mediums, including digital, social and targeted mail and email to convey a clear and cohesive message to the customer.
3. Send targeted direct mail and email with custom messaging that is unique to the customer’s vehicle status with clear calls-to-action to buy or service.
4. Monitor all inbound calls to improve customer service, quickly resolve potential CSI issues, and track what ads generate the best response.
5. Protect and promote their positive reputation on and offline by delivering a world class customer experience and inviting their happy customers to share their reviews online.

Resources They Use:

1. DMS: Reynolds and Reynolds (www.ReyRey.com)
2. Marketing Agency: Tier 10 Marketing (www.Tier10Marketing.com)
3. Targeted Marketing Company: Team Velocity Marketing (www.TeamVelocityMarketing.com)
4. Call Monitoring System: CallRevu (www.CallRevu.com)

Recommended Actions:

1. Conduct extensive market research to define your ideal market and identity consumers that have the highest statistical probability of doing business with their dealership.
2. Implement a smart integrated marketing strategy that communicates a cohesive message across multiple marketing mediums.
3. Use intelligent communications with custom messaging that reflects the appropriate status of your customers’ buying and servicing activity.
4. Actively monitor all inbound calls to preempt and resolve potential CSI issues, improve appointment-set ratios, and train staff on proper call-handling.

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Autotrader Acquires VinSolutions.com

Recently Autotrader announced they were acquiring VinSolutions, an automotive digital marketing company that serves manufacturers and retailers. “We are thrilled to acquire VinSolutions and add it to our best-in-class portfolio of dealer software solutions companies,” states Chip Perry, president and CEO of AutoTrader.com. “VinSolutions will further ramp up our dealer solutions product suite to provide dealers with a simpler, more functional one-stop-shop solution of internet marketing software tools accessible by the dealer through a single sign-on tool.”

Consistent with AutoTrader.com’s approach to their previous acquisitions, VinSolutions will be a subsidiary of AutoTrader.com, and the current management team will remain intact, led by Mike Dullea (CEO) and Matt Watson (CTO) from their headquarters in Overland Park, Kansas. Mike Dullea, VinSolutions CEO says, “Our team is very excited to join forces with AutoTrader.com because we are both passionate about helping dealers use the internet and innovative technology to grow their business. Together we will strive to constantly improve how we serve our dealers and how we help them attract, serve, and retain their customers.”

VinSolutions software tools will be offered on a flexible a-la-carte basis with no long-term contracts, and dealers will have the flexibility to work with their other software vendors since AutoTrader promotes open platforms and integration across its software solutions and other dealer software tools.

VinSolutions.com evolved from a small inventory management company to the 33rd fastest growing software company in the United States according to the Inc 500. VinSolutions took off after they released their all-in-one dealership marketing system a few years ago and today they are the market leader and this article will show how they did it.

VinSolutions was founded by entrepreneurs who knew there had to be a better way. Led by Mike Dullea, CEO of VinSolutions.com, the company experienced explosive growth of more than 100 percent a year over the last few years. “Dealers were complaining about working with too many tools that didn’t talk to each other,” says Dullea. The average dealer works with 10-15 different companies to handle all their technology and internet marketing and it is difficult to manage so many tools. “I was spending too much money with 15 different companies that did not integrate,” says Todd Crossley from Gary Crossley Ford, the number one Ford retailer in the Kansas City Market.

“Now I have one system that does everything from managing my internet marketing to desking to service in one tool that is easy for my team to use. We are spending less for one system that does more than the 15 it replaced.”

VinSolutions built an “all-in-one” digital marketing system that includes search marketing, online advertising, social media marketing tools, websites, internet lead management, CRM (customer relationship management), sales force automation, sales management and desking, appraisal, finance, used vehicle market pricing, inventory management and distribution, hand held inventory marketing tools, window stickers, automated video tours, targeted marketing with email, text, direct mail, and telemarketing services. Their “Dealership Marketing System” has complete mobile integration so dealers can access reports from any mobile phone that has access to the internet including Blackberrys, Android, and iPhones. Currently VinSolutions is certified by all major OEMs and integrates with most DMS companies including certified integrations with ADP, R&R, AutoSoft, and Arkona. Vin also has alliances and integrations with CARFAX, Autodata, RouteOne, DealerTrack, and vAuto and Kelley Blue Book, both of which are also owned by Autotrader.

To launch the new all-in-one dealership marketing system Dullea recruited the help of a few industry veterans who had a proven track record of helping other companies grow. Dullea recruited Sean Stapleton as their Chief Sales Officer and Kendall Billman to lead their web marketing initiatives. Stapleton was the EVP of sales at Who’s Calling where he helped create a new category of call monitoring and measurement and Billman helped develop web platforms for both Third Coast Media (acquired by Reynolds and Reynolds) and AutoONE Media.

Dullea also recruited Sean Wolfington to join Vin Solution as a mentor and advisor. “We brought Wolfington on board, because he led two of the biggest digital marketing companies in the industry, (CyberCar & Automark, which R&R bought in 2001 and BZResults, which ADP bought in 2006) and his experience and advice has been invaluable,” said Dullea. “Mike and Matt built an extraordinary team with talented guys like Kendall Billman and Sean Stapleton, the best salesperson in the industry,” says Wolfington. “They are the best at what they do and Dullea is a relentless leader who has built a fantastic team and company.”

VinSolutions digital marketing system has been widely recognized in the industry. Recently VinSolutions won the DrivingSales award for their website, internet lead management tool and their new VinLens product, a customer information application that lets dealers see who is on their site and what they are looking at so they can deliver custom messages and promotions based on what’s important to the customer. VinLens also lets the dealer see where the customer has been before visiting the website so they can track their advertising better. VinSolutions also took the top prize at the Automotive website Awards for building the most complete digital marketing system in the industry.

Autotrader and VinSolutions are amongst a few high growth companies who are offering dealers innovative technology that is helping the industry move forward. Hopefully Autotrader will be able to leverage the synergies of all of the companies they have acquired to serve their dealers better and so far it appears they are doing just that.

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Vendor Profile: Vinsolutions.com
The Making of a Digital Marketing Juggernaut

Publisher’s note: Although AutoSuccess don’t often cover automotive sales news, in favor of providing sales-improvement help to our readers, we believed there are enough professionals in the industry affected by these events that it warranted coverage.

Autotrader continued to surprise the industry when they announced they were acquiring VinSolutions, an automotive digital marketing company that serves manufacturers and retailers. “We are thrilled to acquire VinSolutions and add it to our best-in-class portfolio of dealer software solutions companies,” said Chip Perry, president and CEO of AutoTrader.com. “VinSolutions will further ramp up our dealer solutions product suite to provide dealers with a simpler, more functional one-stop-shop solution of Internet marketing software tools accessible by the dealer through a single sign-on tool.”

VinSolutions software tools will be offered on a flexible a-la-carte basis with no long-term contracts, and dealers’ will have the flexibility to work with their other software vendors, since AutoTrader promotes open platforms and integration across its software solutions and other dealer software tools.

VinSolutions.com evolved from a startup inventory management company to the 33rd fastest growing software company in the United States according to the Inc 500. VinSolutions took off after the company released their all-in-one dealership marketing system a few years ago.

VinSolutions was founded by entrepreneurs who had a vision of building one solution that tied together all the technology a dealer needs to market their dealership online. Led by CEO Mike Dullea, the company experienced growth of more than 100 percent a year over the last few years after releasing their new solution. “I was spending too much money with 15 different companies that did not integrate,” said Todd Crossley from Gary Crossley Ford, the No. 1 Ford retailer in the Kansas City Market. “Now I have one system that does everything, from managing my Internet marketing to desking to service, in one tool that is easy for my team to use. We are spending less for one system that does more than the 15 it replaced.”

“Dealers were complaining about working with too many tools that didn’t talk to each other, so we built one tool that could replace the rest” said Dullea. Dullea worked with Matt Watson, one of VinSolutions’ founders and CTO, to build an “all-in-one” sales and service marketing system that is DMS agnostic. “If you can think it, Matt and his team can build it,” Dullea said. “His team releases enhancements every other Tuesday based on requests they receive directly from the users.” As a results, VinSolutions users help them build a platform that includes search marketing; online advertising; social media marketing tools; Websites; Internet lead management; CRM (customer relationship management); sales force automation; sales management and desking; appraisal; finance; used vehicle market pricing; inventory management and distribution; handheld inventory marketing tools; window stickers; automated video tours and targeted marketing with e-mail, text, mail and telemarketing services. Their
“Dealership Marketing System” is one of the first companies to include complete mobile integration so dealers can access reports from any mobile phone that has access to the Internet, including Blackberry, Android and iPhone. Currently VinSolutions is certified by all major OEMs and integrates with most DMS companies, including certified integrations with ADP, Reynolds and Reynolds, AutoSoft and Arkona. VinSolutions also has alliances and integrations with CARFAX, Autodata, RouteOne and DealerTrack, as well as vAuto and Kelley Blue Book, both of which are also owned by Autotrader. “

To launch the new all-in-one dealership marketing system, Dullea recruited the help of a few industry veterans who had a proven track record of helping other companies grow. Dullea recruited Sean Stapleton as their chief sales officer and Kendall Billman to lead their Web marketing initiatives. Stapleton was the EVP of sales at Who’s Calling where he helped create a new category of call monitoring and measurement, and Billman helped develop Web platforms for both Third Coast Media (acquired by Reynolds and Reynolds) and AutoONE Media.

Dullea also recruited Sean Wolfington to join VinSolutions as a mentor and advisor. “We brought Wolfington on board because he led two of the biggest digital marketing companies
in the industry, (CyberCar and Automark, which Reynolds and Reynolds bought in 2001 and BZResults, which ADP bought in 2006) and his experience and advice has been invaluable,” said Dullea.

“Mike and Matt built an extraordinary team with talented guys like Kendall Billman and Sean Stapleton, the best salesperson in the industry,” said Wolfington. “Dullea is a relentless leader who has built a fantastic team and Watson built an extraordinary technology platform.”

VinSolutions digital marketing system has been widely recognized in the industry. Recently they won the DrivingSales award for their Website, Internet lead management tool and their new VinLens product, a customer information application that lets dealers see who is on their site and what they are looking at so they can deliver custom messages and promotions based on what’s important to the customer. VinLens also lets the dealer see where the customer has been before visiting the Website so they can track their advertising better. VinSolutions also took the top prize at the Automotive Website Awards for building the most complete digital marketing system in the industry.

Consistent with AutoTrader.com’s approach to their previous acquisitions, VinSolutions will
be a subsidiary of AutoTrader.com, and the current management team will remain intact, led by Mike Dullea (CEO) and Matt Watson (CTO) from their headquarters in Overland Park, Kansas. “Our team is very excited to join forces with AutoTrader.com because we are both passionate about helping dealers use the Internet and innovative technology to grow their business,” Dullea said. “Together we will strive to constantly improve how we serve our dealers and how we help them attract, serve and retain their customers.”

Both Autotrader and VinSolutions are pioneers in the industry, so it will be interesting to see
how they can leverage all the synergies to serve their dealers better. One thing is for sure:
Neither company has a reputation of standing still for long so it will be interesting to see
how this new partnership helps dealers and the industry move forward.

Susan Givens is the publisher of AutoSuccess. She can be contacted at 877.818.6620, or by e-mail at sgivens1@autosuccessonline.com.

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Jennifer Aniston Endores Paragon Honda

By Elena Malykhina
February 18 2011

There are companies that would pay millions to get an endorsement from Jennifer Aniston. One lucky Honda dealership got it for free. <!–more–>Aniston was on “The View” last week to promote her latest movie, coincidentally on the same day that The New York Daily News reported that the star has been looking at buy a $15 million penthouse apartment in Greenwich Village. So the show’s hosts asked Aniston about the story—and handed her a copy of the paper, which featured a full-page ad for Paragon Honda, a dealership in Queens. And through that stroke of luck, Paragon Honda got the best kind of product placement it could have asked for: its ad in front of millions of Aniston’s fans.

“Thank god that we went with a full-page ad that day. If we had orchestrated the whole thing, we couldn’t have done it so well,” Brian Benstock, Paragon Honda’s general manager, says

Benstock says it’s too early to tell if Aniston’s inadvertent plug will result in more sales. But, he added, “we have been getting a tremendous amount of calls from industry insiders asking us how we pulled this off.”

Under the leadership of Mario Murgado, President and CEO, Brickell Motors has sold more Honda and GM vehicles in the last 10 years than over the previous thirty years combined by using intelligent, innovative and integrated marketing strategies that have helped the organization grow over 1000%.

To build a successful business, Murgado knew he would need a highly-effective marketing strategy to affect multiple marketing mediums including traditional, digital, targeted, social, media, publicity, niche marketing, and reputation management. Murgado also felt strongly that pro-active involvement in the local community and effective advertising to the local Latino population would be key to the success of the Brickell organization.

This Success Story highlights some of the processes and practices that Brickell Motors has developed to grow its organization over 1000% by attracting, servicing and retaining more customers profitably for less cost in a competitive metropolitan market.

The basis of Brickell’s strategy begins with market research. Brickell sought to identify consumers with the highest statistical probability of doing business with their dealerships and to target those customers and prospects with custom messaging based on the status of their vehicle. “We use a combination of manufacturer research, Polk market data and the dealer’s historic sales and service trends to map out which customers to target now and in the future,” said Budd Blackburn, owner of www.TeamVelocityMarketing, the targeted marketing company that Brickell Motors uses. “With the market data and our state-of-the-art print technology Brickell not only targets the best customers, but is also able to talk intelligently to their customers based on their vehicle status,” Blackburn added.

Brickell’s marketing strategy consistently communicates a cohesive message throughout the five year life cycle of the customer that begins by thanking new customers, providing maintenance and service reminders, recall notices, and extended service warranty information. Brickell also has sales retention campaigns that target off-lease and retail finance customers. All Brickell’s customer communications are delivered with a message that is unique to the customer’s status whether they are due for minor service or are eligible to upgrade to a new vehicle.

Additionally, Brickell incorporates bi-lingual messaging on all its marketing given the large Latino population in the Miami metropolitan area. With approximately 50 million Hispanics living in the U.S. Latinos are the fastest growing demographic in the nation and represent over half of Brickell’s market. “For us to market successfully within the Hispanic community it is important to be in-touch with the emotional, cultural and traditional values of the community,” said Murgado.

Brickell has always been actively involved in the community partnering early on with Camillus House, a non-profit organization that provides humanitarian services to men, women and children who are poor and homeless. “Camillus House extended its hands to the first Cubans who arrived in this country. Partnering with this organization was a way to tell the community ‘we are here for you’, and we are still here for them today,” said Murgado. With the continued growth of the Hispanic and Latino population nationwide it is essential for dealers to understand how to market effectively to this demographic and Murgado’s background gives him a natural sensibility that is authentic.

“It is very easy to work with Mario to market Brickell Motors because he is deeply involved and respected in the community so he is very aware of what consumers want and what they will respond to,” said Sean Wolfington, owner of www.Tier10marketing.com, the company that does all of Brickell Motors’ marketing in both Spanish and English. “There are more Latinos in the U.S. than there are Spaniards in Spain or Canadians in Canada, it is imperative to know how to market effectively to this population.”

Always looking for opportunities to reach out to the community, Brickell also developed a special niche marketing program for local teachers with a “Back to School” promotion that honored all Miami area public and private school teachers with an exclusive special of only $50.00 over Brickell employee pricing on any new Honda in-stock, and the teachers kept all incentives. “We consider today’s educators pillars of the community who continue to educate our youth during a time of unprecedented budget cuts and economic adversity. We would like to extend this special thank you to them,” said Murgado. Their investment in the community is sincere, whether through special teacher programs or charitable works the Brickell organization is a true member of the community.

Brickell’s commitment to outstanding customer sales and service has made them a stand-out in the Miami area. They are rated the #1 Honda Dealer in Miami by Google reviews so when you google Brickell Honda every result is positive which is not typical for most dealers. “To make it easy for our customers we built a web site, www.BrickellMotorsReviews.com, that gives our customers step-by-step instructions on how to share their positive reviews,” Murgado explained.

Brickell is also a member of the Automotive Advertising Network (AAN), the 3^rd most popular lead generation platform, after Auto Trader and Cars.com, which generates thousands of in-bound links that increase Brickell’s online ranking. “If you search google for “Miami Honda”, Brickell Honda pops-up as the first Honda dealer for the region and in a competitive online market that’s where you want to be – on top,” said David Boice, co-founder of AAN (www.automomotiveadvertisingnetwork.com).

Brickell also utilizes Video Search Engine Optimization (VSEO) to appear at the top of search engines for highly competitive search phrases. Consumers in the Miami market who search for vehicles online immediately find positive videos about Brickell and the cars they sell because Google gives 55 times more authority to video than text results, said Karry Moore, President of www.Car-mercial.com, the VSEO company that Brickell uses. “Video combines the power of sight, sound and motion that gets the customer excited and drives them to Brickell,” added Moore.

Murgado has a passion for excellence and sets the bar high for his employees to make sure that every customer is handled with the utmost care, “We strive to clearly and honestly explain the products and services that we offer. Our customers want to be respected and understood, and it’s up to us to make this happen,” said Murgado. “Every call that comes into the dealership is monitored 24/7 and we send real-time alerts so the dealership can repair broken relationships before it’s too late,” said Chip King, owner of www.CallRevu.com, the company Brickell uses.

“This system also helps us track our advertising to see what marketing initiatives are generating the most response – it’s a real eye-opener when you discover that calls you thought were simply coming in off our web site are actually initiating from other campaigns that directed consumers to our web sites. It helps us prioritize our marketing dollars more efficiently,” Murgado explained.

“We spend a lot of money to attract customers and we want to make sure we exceed their expectations. My managers are alerted immediately whenever a potential problem or concern arises so that we can quickly reach out to the customer and hopefully fix whatever concerns they may have and create a customer for life,” said Murgado.

In A Nutshell

Brickell Motors has sold more Honda and GM vehicles in the last 10 years than over the previous thirty years by implementing an intelligent marketing strategy across all marketing mediums.

• Brickell Motors conducts in-depth market research to find customers with the highest statistical probability of buying or servicing a vehicle with their dealership.
• Brickell targets the best in-market customers and prospects with custom messaging specific to the customer’s vehicle status
• Brickell Motors uses Video Search Engine Optimization (VSEO) to appear on top of the search engines for the most popular search phrases in their market.
• Brickell has a comprehensive bi-lingual marketing strategy that targets the growing Latino community.
• Brickell monitors all customer phone calls to ensure sales and service calls are being handled properly and alert management so they can save a deal today and customers over the long term.
• The Brickell organization is deeply involved in the local community.

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Paragon Honda and Acura grew from #17 to the #1 New & Certified Pre-Owned Honda & Acura Dealer in the U.S. in a short 6 month period during one of the most challenging periods in the history of the automotive industry by redefining their marketing, sales and service strategies. “Overall, it was our best year in business despite being one of the worst years in the industry,” said Brian Benstock, GM and partner of Paragon Honda and Acura, and their new strategies laid the foundation that continues to breed success and phenomenal results.

Paragon took a close look at the marketing practices they had in place and found that they were using multiple vendors to execute their advertising and it was confusing for their customers because the TV and radio commercials had one message, direct mail had another, and email communications had another, yet none of the messaging was consistent with what was on their web site or the merchandising materials in the dealership.

“In the past we worked with 12 different companies to execute every part of our strategy, but the vendors didn’t work together so the campaigns were not integrated. It was confusing for our customers,” said Benstock. “We wanted a more cohesive message and once we took steps to consolidate our vendors our advertising strategy improved dramatically. We hired one company to develop and implement one integrated marketing strategy that is completely connected and consistent.”

Paragon carefully assessed who they were targeting. “We had always spent more money on mass marketing through TV, radio and print, but market research showed that over 90% of our business came from less than 10% of the city, so we began targeting our marketing to the consumers that live in those areas and that are in the market to buy or service their vehicle in the near future,” explained Benstock. Paragon conducted extensive market research to identify consumers that have the highest statistical probability of doing business with their dealerships now and in the future. “We use the manufacturer’s research, Polk Market data and the dealer’s historic sales and service trends to identify which customers to target,” explained Sean Wolfington, Owner of www.Tier10Marketing.com, the marketing company Paragon hired to help them revise their strategy.

Traditional advertising on TV, radio and print is expensive in New York, like other major metro markets so Paragon shifted their traditional ad budget toward more targeted marketing efforts that generate better returns. “This saved us a substantial amount of money that we used to waste on people who were either not in the market for what we sell or who were not in our geographical market and therefore had a low probability of coming in for sales or service,” said Benstock.

However, since Latinos make up half of Paragon’s market, Paragon does leverage some good buys on Spanish radio, as well as, print ads in the New York Times where they include QR technology, a barcode that links consumers’ mobile phones to Paragon’s website where they can learn more about the offer and contact the dealership. “We recently did a radio buy that promoted a film premiere we sponsored in Queens,” said Benstock. “We invited people to visit our website and Facebook pages to enter to win tickets to the premier and provided additional entries for people who shared the promotion with others on Facebook and twitter.”

Online and social media marketing is also a large part of Paragon’s strategy. With over 90% of Honda consumers using the web to shop, Paragon has an in-depth strategy for search engine optimization and marketing, email marketing, banner ads on popular websites like Facebook, social media marketing, online reputation management and mobile marketing. “We have a lot of friends and followers on the top social media platforms including Facebook, MySpace, Twitter and Bebo,” said Benstock. “As a result of our digital marketing campaigns, we increased the size of our database by approximately 50,000 in the last 6 months and we are sending out professionally designed emails that have credible themes and clear offers that generate leads from consumers who will buy and others who need service.”

All of Paragon’s digital marketing efforts drive consumers to campaign micro sites where the message, offers, look and feel are consistent with every other part of the campaign. The campaign micro site is designed to convert the maximum number of visitors into email, phone and showroom leads. Some examples of their micro sites are www.ParagonHondaInfo.com and www.ParagonExpressService.com.

“Our best source of leads are our own websites because the closing ratios and average gross profits are much higher than the typical lead providers, as most 3^rd party lead generators sell the same lead to multiple dealers,” said Benstock. “We only work with lead providers that generate a good return and have a lower cost per sale compared to our other marketing. We use www.AutoTrader.com, www.Cars.com and www.AutomotiveAdvertisingNetwork.com because all three of them deliver exclusive leads which means they don’t resell the same leads to all of our competitors.”

AutoTrader and Cars.com have long done a good job with pre-owned and they give dealers exposure to clients they may not otherwise reach. The Automotive Advertising Network promotes Paragon’s vehicles on the most popular search engines and social networks and sends them unlimited leads for a nominal flat membership fee. AutoTrader and Cars.com are more expensive but often generate more leads.

With the majority of consumers using search engines to find their next new vehicle, Paragon uses organic Search Engine Optimization (SEO), Video Search Engine Optimization (VSEO) and targeted pay-per-click search marketing campaigns to attract in-market consumers who are shopping for Acuras and Hondas to their website and dealership. As a result, Paragon appears on top of the search engines for the most popular search phrases in their market “New York Honda” and “New York Acura”.

Paragon tracks what consumers are searching for on Google and they implement search strategies to appear on top of the results for popular search phrases. For example, during cash for clunkers Paragon generated over 5,000 leads in less than a month through Paragon’s website, www.CashForClunkersNY.com, which was the #1 result when customers typed in “NY Cash for Clunkers”. When Toyota’s recall was announced, Paragon received leads from the Automotive Advertising Network who optimized a website called www.ToyotaRecall.org, which appears on top of the results when consumers search for information about Toyota’s Recall. “The Automotive Advertising Network also provides thousands of inbound links to Paragon’s website, which increases search authority and position on the search engines,” explained Brian Pasch, founder of the Automotive Advertising Network that Paragon uses.

Traditionally, television advertising has worked well for dealers because consumers experience the sight, sound and motion that other mediums don’t deliver. And now Paragon is using video to promote their dealership but they are optimizing the videos to appear on top of the search engines for the most popular search phrases their consumers use to find an Acura or Honda. “We hired a VSEO company, to produce and position hundreds of positive videos about our dealership on top of the search. They also post comparison videos for consumers who are searching for competitive brands like Toyota and Nissan, so they can see the advantages of the Honda and visit our website to get an instant price quote,” said Benstock. “Google gives advantage to video results over text results and consumers like video more than text,” said Karry Moore, Owner of www.Car-Mercial.com, the company Paragon uses for their VSEO strategy.

Paragon also communicates with all in-market Honda and Acura consumers by sending custom offers based on their vehicle, miles and position in their ownership cycle. Paragon sends custom campaigns via mail and email to promote all their profit centers, New, Used, Finance, Service and Parts. “We dial into Paragon’s DMS to target in-equity customers and we use variable print technology to send a custom message to each consumer that shows them how they can get a newer vehicle for a lower payment,” said Budd Blackburn, owner of www.TeamVelocityMarketing.com the targeted marketing company that Paragon uses. “We also include offers that promote the service the customer needs, extended service agreements and accessories.”

To further integrate their messaging, Paragon Honda and Acura make it obvious that something is going on at the dealership even if consumers don’t know about their sale, by the merchandising that quickly reminds them they’re lucky to have stopped by at the right time. “We want our customers to see a consistent message through our advertising and our in-store posters, tri-folds, balloons, hang tags and brochures,” said Benstock.

Just as important as communicating an effective and cohesive message to new customers, Paragon works hard to implement a detailed loyalty strategy to bring back customers for service and to resell their customer base more often. “We have a 360° customer communication process from the moment a customer buys to the time they renew into a new vehicle and everything in between,” said Benstock. Paragon uses email, phone, voicemails and direct mail to communicate with their customers when they need service, accessories, an extended warranty or a new vehicle.

Paragon Honda and Acura are the #1 Certified Pre-Owned in the world. Actually, Paragon Honda sells more than twice the certified pre-owned vehicles of the 2nd place Honda Certified retailer and broke Honda and Acura’s all-time record by selling over 300 Certified Hondas and over 100 certified Acuras in one month. “We source most of our certified vehicles from trade-ins because we have increased our new vehicle sales to customers who trade-in 2 and 3 year old vehicles as a result of our targeted marketing,” said Benstock. “We give every customer an autobiography that includes the vehicle’s history, lemon check, service history, and pricing information on competitive vehicles so our customers have a lot of confidence when they buy a Certified pre-owned vehicle from our dealership,” explained Benstock.

To make sure that everything they put into place is working Paragon tracks their advertising, employees, and how their customers are treated by listening to every call that comes into their dealership. “We use a company called www.CallRevu.com to monitor all our calls 24/7 and they send real-time alerts to our managers when a customer is mishandled on the phone,” said Benstock. “Our managers save a lot of deals because they contact customers immediately before it’s too late.”

In A Nutshell

Paragon Honda and Acura grew from #17 to the #1 New & Certified Pre-Owned Honda & Acura Dealer in the U.S. in a short 6 month period during one of the most challenging periods in the history of the automotive industry by redefining their marketing, sales and service strategies that promotes all their profit centers.

WITH COMPANY SITES

• Paragon Honda & Acura use www.Tier10Marketing.com to deliver a cohesive marketing message across all marketing mediums to promote all their profit centers in sales and service.
• Paragon only works with lead providers like www.AutoTrader.com, www.Cars.com and www.AutomotiveAdvertisingNetwork.com that generate a good return and have a lower cost per sale compared to our other 3^rd party lead providers.
• Paragon target-markets to quality single-owner trade-ins for their Certified Pre-Owned program.
• Paragon uses www.Car-mercial.com for Video Search Engine Optimization (VSEO) to optimize videos to appear on top of the search engines for the most popular search phrases their consumers use to find an Acura or Honda.
• Paragon works with www.TeamVelocityMarketing.com to target in-market customers and prospects who have the highest statistical probability of doing business with your dealership today and for the long term.
• Paragon uses www.CallRevu.com to monitor all customer phone calls to ensure sales and service calls are being handled properly – and act quickly when CSI concerns arise.

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Programs boost F&I profit and help dealers hang on to customers

Credit-repair products and services, once strictly tied to subprime or buy-here, pay-here operations, are making their way into finance and insurance departments at franchised dealerships.

Paragon Auto Group's Brian Benstock: Making it easy for customers to do their next deal “is in our self-interest.”

Several changes are driving growth in the segment: financial institutions’ tighter lending practices, stiffer competition among dealers, an increase in consumers with troubled credit histories and stricter rules governing F&I.

While credit-repair products can boost F&I profit, “the bigger picture here is customer retention and differentiation” from other dealers, says Brian Benstock, general manager of Paragon Auto Group in the New York borough of Queens.

Paragon’s Acura and Honda stores are among the approximately 250 dealerships that have signed up with credit consulting company Credit Forget It. The Paragon stores, which Benstock says sell about 1,000 new and used vehicles a month combined, climbed aboard about two years ago — when banks started cracking down on loans and tying approval more closely to credit scores.

Customers who don’t receive credit approval or whose applications are approved on less favorable terms based on their credit scores are offered a Credit Forget It Pink Card, which provides 90 days of free services aimed at raising troubled credit scores at no cost to the customer or dealer.

Paragon also sells Credit Forget It’s aftermarket Platinum Card program, which provides 36 months of credit-optimization services, including identity theft prevention, credit education and credit restoration. About 11 percent of Paragon’s customers participate in Credit Forget It’s Pink Card or Platinum Card program, Benstock says.
Customer retention

“We’re all about customer retention. It is in our self-interest to make it easy for customers to do their next transaction with us,” says Benstock, who has seen a rise of as much as 100 points in customer credit scores and repeat business through Credit Forget It. “I don’t want to be in the credit-counseling business per se, but we show criteria and Credit Forget It explains it.”

Paragon, in an urban market, does about a quarter of its financing in subprime paper, Benstock says. But it uses Credit Forget It with all customers, not just the less creditworthy ones. Many have had their credit battered in the recession and want to improve their scores, he says.

The average U.S. credit score is 655, down from 714 in 2006, according to data cited by Credit Forget It. A difference of just 15 points can dramatically change a customer’s APR, monthly payments and lease rates, Benstock says.

Paragon Acura customer Brunilda Vargas-Cruz says that in three months Credit Forget It’s Pink Card program helped her remove some mistakes from her credit report, boost her credit score by about 45 points and get a better refinancing rate, which enabled her to buy the Acura MDX she had been leasing from the dealership. “The experience was great,” she says.

Credit Forget It President Damien Bullard says the New York company charges dealers $269 per customer for the Platinum Card program, with a suggested dealer retail price of $995.

Bullard, who spent nearly a decade as general manager of an automotive group in Brooklyn, emphasizes that Credit Forget It is not a debt consolidator. “We try to promote education and awareness,” he says.

For the past six months, Ricart Automotive Group of Columbus, Ohio, has distributed a credit-repair book and CD-ROM from Recreditpair of Slidell, La., to many new- and used-vehicle customers who fail to receive credit approval.

“The timing is perfect for this product; we jumped all over it,” says Rhett Ricart, co-owner. His group sells 800 to 1,000 vehicles a month, but Ricart says 10 to 20 percent of customers leave his showrooms without approval.

It costs Ricart about $5 to $10 to provide Recreditpair’s self-help credit-repair resources to a customer.

Ricart says at least a half-dozen customers have returned to buy a vehicle since receiving Recreditpair.

About 170 dealerships are signed up with Recreditpair. Jim Longacre, the company’s president, says: “There’s nothing a credit-repair company or attorney can do that you can’t do yourself.”

The cost for a single-point dealership is $12,995, which includes a disc to access the company’s Web-based software, a Recreditpair button on the dealer Web site, live training at the dealership and customizable monthly print ads. Additional stores cost $595. Because customers do everything on their own with the product, dealers are not liable, Longacre says.

About 580 car dealers are signed up for a credit-repair service offered by VertiSEL of Coeur d’Alene, Idaho.

Thielen Motors Finance Manager G.P. Anderson works directly with customers to resolve credit report problems.

The credit-repair work is done by Lexington Law and other law firms. “We are not a credit-repair company, nor is the dealer. We indemnify the dealer by being the middleman,” says Sean McCoy, VertiSEL president.

Dealers, who pay nothing for the service, are asked to present information about VertiSEL’s ScoreDriver credit-repair program to every customer who is denied credit.

“You can give them a soft landing and treat them with dignity,” says McCoy, who adds that “75 to 80 percent of what we do is customer retention and good will.” Within 24 hours, customers receive a call offering a free credit consultation.

VertiSEL also encourages those customers to enroll in ScoreDriver, a 90-day credit-improvement program that costs customers $396, payable over the three months. Dealers receive $20 to $40 for each customer who signs up to help offset the cost of pulling credit reports during the program. ScoreDriver’s “file and forget it” feature notifies dealers when customers hit a target credit score so the dealers can follow up.

John Gentile, a partner in the Bellavia Gentile & Associates law firm in Mineola, N.Y., says dealers should verify that there are no costs or hidden charges associated with credit-repair services. Services should include face-to-face or phone interactions with consumers so dealers don’t run afoul of privacy regulations, he says.

Despite the availability of credit-repair products and services, some franchised dealers are working with credit-challenged customers on their own.

G.P. Anderson, finance manager at Thielen Motors in Park Rapids, Minn., has been working directly with customers and Equifax to help identify and resolve credit report problems. “It took me three years to convince the credit bureau to allow me to do this,” he says.

Anderson reviews credit report items and asks customers if they have documentation on loans or other borrowings they have paid off. He says he has walked hundreds of the dealership’s Chevrolet, Buick and Cadillac customers through the credit-correction process.

“They hug you; they cry,” he says. “There’s not a story you can tell me that I haven’t seen or heard.”