Two auto companies are bolstering dealer service departments with extra advertising during October to get customers into the shop to prepare their vehicles for winter.
American Honda Motor Co. Inc. and Subaru of America Inc. chose October because they could get more bang for their bucks. The auto industry recognizes October as National Car CareMonth, a time when businesses and civic groups promote vehicle maintenance and repair.
For example, independent garages in Minnesota and Washington state have promoted “Lights On” days, when they will change burned-out bulbs on customers’ cars for free.
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“We want to fly on the coattails” of a national event, said Ginny Newkirk, fixed operations advertising and communications manager for Subaru. “I don’t know why other manufacturers don’t participate in National Car Care Month.”
Manufacturers also increase promotion because they want to boost customer loyalty to dealer service departments. Dealers lose many service customers after the new-vehicle warranty expires. But if they promote free inspections every October, dealers pick up business that would have gone to independents.
About 70 percent of Honda owners return to dealer service departments in the first year of ownership; 60 percent return in the second and third years after purchase. After four years, however, only 40 percent of Honda owners come to dealerships for service.
“We are trying to get customer retention up in the next three years to 45 or 46 percent,” said Jim Roach, vice president of service operations for Honda.
Honda promoted free 45-point vehicle inspections on Saturday, Oct. 2, at 758 dealerships on its Web site and through a direct-mail campaign to 2 million Honda owners. The campaign, which is called “Customer Appreciation Day,” is a first for Honda, but the automaker wants to make the campaign an annual event. The theme is “welcoming old friends” and the mailers say that “old friends get in free.” About 80 percent of Honda’s dealers are participating in the event.
The company expected the invitations to generate a 4 to 7 percent response rate based on similar promotions Honda has done.
Honda also expects dealers to pick up some business. Based on previous promotions, about 30 percent of customers who come to the dealership for free vehicle inspections wind up purchasing service work.
Honda also provided dealers with free-oil-change coupons to distribute to customers. “We help dealers on that by covering the cost of the oil filter,” said Suzan Fairchild, assistant manager of service marketing for Honda. Other point-of-purchase materials such as banners, posters, hats and children’s coloring books are available for a nominal fee, Fairchild said.
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Subaru has been promoting National Car Care Month for the past six years. Though it does not track response rates, the company measures success by growing dealer participation. “More than 50 percent of our dealers (about 300) are participating,” said Newkirk. “In the first year, only a couple dozen dealers participated.”
Subaru encourages dealers to host free car-care clinics for Subaru owners from October through December. Subaru owners are invited to visit the dealerships for a free inspection that includes a checkup of all major operating systems and a written report of the vehicle’s condition.
Subaru is promoting the clinics on its Web site, press releases and a toll-free number. The company also discounts the direct-mail program it provides for dealers by 10 percent from September through November and pays 50 percent of the cost of the event, including refreshments and small giveaways.
Dealers also pay a nominal amount for a merchandising kit that includes point-of-purchase displays, posters and signs.
To prepare for the fall promotion, Subaru gave dealers the chance to stock up on parts during the summer, offering discounts up to 10 percent on the fastest-moving parts.