Fixed Ops Journal - June 2019 - F18

FIXED OPS JOURNAL

SPECIAL REPORT

COUPON BOND

Promotional text messages boost service business,
save dealers money by targeting likely customers

MARK ELIAS

foj@autonews.com

ext messages are becoming effective devices for dealership service
departments to send customers discount coupons and notify them of
other sales promotions. Advocates say such
digital marketing enables dealers to boost
service business while saving money by focusing on favored consumers.
But detractors assert that marketing by text
message cheapens an important communications channel and overlooks older customers
who prefer more traditional marketing appeals.
Hawkinson Nissan, in the Chicago suburb
of Matteson, Ill., says it did nearly $168,000 in
additional service business over seven
months last year by texting a coupon for a
$34.95 oil and filter change to about 2,400
customers who asked for it via a link on the
dealership's website. Nearly 1,000 coupons
were redeemed, and they generated an average of $168 in service work.
"We send out over 400 text coupons per
month," says T.J. Blough, service director of
Hawkinson Nissan and Hawkinson Kia, also
in Matteson. "We probably redeem 230 or so. I
am an advocate of it."
Since the dealerships started texting coupons about two years ago, the number of customers who approved additional service work
after previously declining it has increased by
38 percent, Blough told Fixed Ops Journal.
The number of so-called orphan customers
- vehicle buyers who returned to the dealership for service for the first time after getting a
coupon - rose by 22 percent.

'Unbelievable' numbers
Hawkinson's vendor is Text2Drive of Chicago, which works with more than 1,400 U.S.
dealerships. Text2Drive charges dealerships
$349 to $499 a month, depending on their
size, to use the platform.
The company's CEO, Gregg Owen, notes that
dealerships must take care not to run afoul of a
federal law that prohibits businesses from
sending unsolicited text messages to consumers. They also must exercise discretion in the
number and nature of messages they send, he
says, so that customers don't get annoyed.
But once customers agree to receive such

PAGE 18

JUNE 2019

Get the message

Sending text messages offering
discount coupons to service
customers offers these advantages to
dealerships.

 Can persuade customers to agree
to service they previously declined

 Texts are especially popular among
millennial consumers
 Can stimulate service sales when
shop business is slow
 Offers incentives to customers to
return to the dealership
 Establishes communications link
with customers

messages, Owen says, "the numbers through
text marketing are unbelievable."
Text couponing is especially effective with
younger customers who are more accustomed
to doing business on their smartphones and
mobile devices, analysts say.
Other vendors that enable dealerships to
send text marketing messages to service customers include Cox Automotive's Xtime and
MobileDealer. On some platforms, customers
can receive texts from a service department by
downloading an app on their smartphone.
The app enables them to search for services,
specials and coupons that they can redeem at
the dealership or when they pay by phone.
Dealerships can send text coupons to customers for services they previously declined, such as
replacing a cabin air filter, or to stimulate service
and parts business when shop traffic is slow.
Sheehy Auto Stores, which operates 22 dealerships in Virginia, Maryland and Washington,
D.C., has used Text2Drive for nearly a year. "It's
part of our strategy to improve our engagement,
so we can reach [service customers] the way
they want to be reached," says Lauren Culbertson, Sheehy's director of marketing.
Other dealerships that offer text coupons
say they do so selectively.
"We sell high-end vehicles, so we aren't a discount type of group and [couponing] doesn't
necessarily fit in our model," says Brian Milleman, vice president of aftersales for New Country Motor Car Group, which operates 23 dealer-

Text coupons appeal to customers
"the way they want to be reached,"
a marketing executive says.

ships, most of them selling luxury brands.
But he adds: "If I want to put a low-hanging
offer" to reclaim service customers who have
drifted away from a dealership, "I would do it
and it works well, depending on the brand."

'Sacred' texts
Text couponing can attract hostility.
"I refuse to do marketing on text," says Ujj
Nath, CEO of myKaarma.com, a software supplier whose platform enables nearly 900 dealerships to communicate digitally with service
customers and accept payments online.
"Text is sacred," Nath says. "Today, that's the
only way you can get to a consumer. If everything else fails, I can text you and you're going to
answer. I would hate to pollute that channel."
And while text couponing is a useful marketing option for service departments, some
skeptics say it's not about to replace traditional print advertising and mass mailings, especially among older customers.
"I don't think mailings have gone away,"
says Sunil Mariola, vice president of product
management for Spireon Inc., which uses
telematics to allow customers to schedule service appointments digitally. "The market is
going through an adjustment, but the dealers
aren't that quick to change. It will take some
time for management to come around to
switching the way they do things.
"It's a case where the dealers and the consumers will need to learn and adapt. This is a people
challenge, not a technology challenge."

http://www.myKaarma.com

Fixed Ops Journal - June 2019

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