In the past, warranty work accounted for as much as 70 percent of an auto dealership's service load.8 That number is steadily dropping to around 30 percent. Because of this large decline, dealerships must now proactively target service retention and loyalty among new car buyers. That's where the sales team of Reynolds & Reynolds comes in. Reynolds helps dealerships become more effective at retaining new car buyers as service customers and building loyalty among the customers to keep them coming back. They help dealers to better understand their customer base, figure out who their most profitable customers are, and then target them with focused incentives to get the customers back into the dealerships when service is needed. The Opportunity Bob Sherman, a Minneapolis-area sales associate with Reynolds, and his regional sales manager, Tim O'Neill, along with Chuck Wiltgen, marketing specialist, met with representatives from Ben Frothingham's American Ford Dealership. American Ford was in need of a new retention plan to boost service sales, and Reynolds provided them with one. The group effectively presented their marketing strategies and tied up the deal successfully. Sherman established the contact with American Ford's service department and discussed their options. His next call was more promising and he talked with them more about a new initiative from Ford called "Quality Care Maintenance." They gave him negative feedback, so he suggested that they meet with his boss, Tim O'Neill. By the close of the third meeting, American Ford agreed to have reports run on their customer retention rate and their database system. Precall Planning Before the call, Sherman, O'Neill, and Wiltgen discussed details of the opportunity, roles each would play, and any possible concerns that they anticipated. They decided that Sherman would discuss the reports with the customer, and Chuck would be the implementation guy. Tim would be there for backup. Because they had been working together so long, they basically already knew how to present their information. Stage 1: Report After two reports were run to determine just who the dealership's customer base was, the three met with Carol Bemis, the dealership's new parts and service director, and Brad Greenberg, service manager. Sherman opened the meeting by recapping the set of mutual expectations and handing out copies of the reports. Sherman had calculated that in the previous year, the dealership lost $144,000 from customers who did not return for service. Sherman calls this the "lost opportunity" for that year. He explained that if American Ford had done business with every one of its new car customers from the past five years, the service department would have brought in an additional $1.3 million. O'Neill and Wiltgen confirmed these figures, and Tim recommended that the company run these reports every 90 days to use as a diagnostic tool. Stage 2: Analysis Sherman then shared the database information with Bemis and Greenberg. He discussed with them the number of customers they have on the database that were considered active, meaning that they had been in for service in the previous six months. The report also divided the customers into where they come from, broken down into area codes and the top nine nearby zip codes. They discussed problems they were having with their marketing strategies, and they all came to the conclusion that the dealership needed service reminders. In response to specific questions, the Reynolds sales team explained that (1) with more than 100 different coupons, mailers could be easily customized to suit changing needs; (2) mailings to customers could be sorted by area code, American Ford service advisor, or zip code; (3) the American Ford logo could be placed on the new mailers; and (4) copies of all the coupons available for use could be made available for Bemis and Greenberg to review. Stage 3: Program The Reynolds team then helped them to figure out the best way to implement a "Preferred Customer Card" program. Sherman explained that in other dealerships with the program, they generally have the service advisors ask the customers up front if they have the card. If they do, the advisor knows that the customer is already in the database and does not need to be added to the list. Reynolds calls this "data hygiene," meaning they are helping companies cleanse their databases so that their service reminder program really hits the mark. Stage 4: Returns The team then presented Bemis and Greenberg with Reynolds's "Direct Drive" program. This program allows the dealership to customize its mailings for the customers who are active and those who are inactive. It also sorts customers by vehicle so that each customer will receive a mailing that is specifically designed for his or her needs. This suggestion rolled the conversation over to the topic of cost. Sherman went over the monthly fees for the Direct Drive program and the costs per mailer and phone call for service reminders. Greenberg and Bemis discovered that they were spending about the same amount on the poor results they were getting from their current vendor. Sherman then calculated that if the dealership did implement the program, they could gain $30,750 of additional business in a single month with only a 5 percent response rate. Stage 5: Close After Greenberg looked over the figures, he showed genuine enthusiasm for what Reynolds could do for American Ford. O'Neill added that his company's programs cover all angles of the customer base-the actives, inactives, and new customers. Bemis and Greenberg agreed to move forward with the service reminder program for the entire database of active customers. They also decided to go with the Direct Drive program to target their inactive customers. This was more progress than the Reynolds team had expected from the account. The meeting closed with Greenberg and Wiltgen hammering out the fine print of the agreement, while O'Neill, Sherman, and Bemis set up a timetable for the next step in the process.
Questions
1. How is the effectiveness of team selling demonstrated by the Reynolds team, and what are some of the disadvantages to this method in this particular case?
2. How did the Reynolds team successfully execute the following critical roles in sales: client access, client education/persuasion, and fulfillment?