Paragon Honda leap-frogged from #17 in U.S. market share for Honda to the #1 Honda New and Used dealer in the world in only 6 months. “We had a record year for volume and profitability during a record low year for the car business,” said Brian Benstock from Paragon Honda in Queens, New York. We met with Brian to find out in his own words what led to their success. Some of the companies Brian works with are on our Top 10 list this year (Tier 10, Level 5, Team Velocity, CallRevu, Car-mercial and vAuto).
Research
Paragon used historic market research to plan their future. “The marketing company we hired (Tier 10) gave us a market research report that identified which customers had the highest probability of doing business with our dealership in the future. We also relied on important used vehicle data provided by one of our vendors (vAuto) to help us implement an intelligent strategy for buying, marketing and selling used vehicles, which is a huge part of our business,” said Benstock.
Traditional Advertising
“We bought less traditional advertising this year, but took advantage of some good buys on radio, TV and print when they were available. We are also leveraging all of our outdoor real estate by putting campaign messages on our own billboards with our theme of $5 a day and $6 a day for Civics and Accords.”
Digital Marketing
“Our strategy includes search engine optimization and marketing, email marketing, banner ads on popular websites like Facebook, campaign micro-sites and social media marketing. We have a lot of friends and followers on all the top social media platforms including Facebook, Myspace, Twitter and Bebo. Over 70% of consumers use search engines to find their new vehicle so we have a plan for organic search engine optimization, video search engine optimization (Car-Mercial.com) and targeted pay per click search marketing campaigns. We drive consumers to a campaign micro-site where the message, offers, look and feel are consistent with the every other part of the campaign. We have 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. “
Public Relations
“Before this year we did not pay much attention to public relations but I quickly learned that a positive 5 minute story on a major TV network was much better than a 30 or 60 second TV ad. The marketing company I work with helped us create and distribute relevant press releases and they booked me for interviews with the local press. As a result we have been in the Wall Street Journal and New York Times 3 times, NY Post 5 times and included in hundreds of stories on national outlets, including CNN, ABC, NBC, CBS, FOX and the home page of MSN twice.” We Googled Brian Benstock and searched for “Videos” and 2 pages of video interviews appeared. “Our online Reputation Management is our top priority now. We just started to use our marketing company’s automated process to ask all our satisfied customers to share their experience on popular consumer sites like Dealer Rater and Google because otherwise complainers are the only people who complete the reviews. Our online reputation was dramatically improved in a few months time and we are still working to make it better.”
Targeted Marketing
“Each month we contact all the “in-market” customers with a custom offer based on their vehicle, miles and position in their ownership cycle. We send custom campaigns via mail, email and phone to promote all our profit centers, New, Used, Finance, Service and Parts. One mailer informs customers that they can upgrade from their current vehicle into a new vehicle for a lower monthly payment .The mailer includes their exact current payment, the new lower payment and a picture of the new car. This is possible because the mail company we use (Team Velocity) uses our DMS data and their variable printing technology to send a custom message and picture to each consumer. We also develop other successful campaigns to include targeting consumers who need service, extended service agreements and who are coming off lease in the next 3-6 months.”
Niche Marketing
“We built a corporate purchase program that offers employees of large organizations special pricing and service when they do business at Paragon. We send an information package to the HR department of the area’s largest organizations to inform them of this free employee benefit and to offer a communication kit to explain the program. The companies have the option of having brochures customized with their logo and sent to their employees directly so they don’t even need to stuff their payroll envelopes.”
Merchandising
“When I walk into Macy’s during one of their sales it is obvious something is going on. Even if I didn’t know about the sale, the merchandising quickly reminds me that I was lucky to run into a big sale. At Paragon we want our customers to have the same experience when they see our campaign posters, tri-folds, stands, balloons, hang tags and brochures. This year we had great merchandising for every campaign we implemented.”
Retention
“The best customer we can ever find is the one we already have. We implemented a loyalty strategy to bring back customers for service and to re-sell our customer base. The key to this strategy was contacting our customers with the right message at the right time. We use email, phone, voicemails and direct mail to communicate with our sales and service customers when they are in the market. The most effective thus far has been mail - the response rates and closing ratios are higher than other mediums and it doesn’t take any of our time or resources because we outsource it; (Team Velocity). Most of our mailers include new, used, finance, service and parts so we can get the maximum return from each contact. When we target in-market prospects they need to replace their vehicle or they need to do a major service if they keep it longer. “
Paragon Certified Pre-Owned
“We have our own Certified Pre-Owned program for vehicles that are inspected and guaranteed but may not meet Honda’s program requirements. Our goal is to only sell pre-owned vehicles we can certify so our customers never have to be worried about the quality of the pre-owned vehicle they get from our dealership. Our certified pre-owned program and marketing campaign includes ads, merchandising and an “auto-biography” for each pre-owned vehicle we sell.”
Trade Cycle Management
This year has taught us that the loyalty and frequency of your customer activity is essential to survive the ups and downs of this business. We are launching a loyalty management strategy centered around trade cycle management and short term leasing. We will educate our customers on the benefits of a short term lease and we are implementing a renewal process to increase loyalty rates at lease end. Our goal is to build a large bank of loyal lifetime customers who buy a new or used vehicle every 2-3 years. After working through the math this strategy has the potential to double our business every 4 years by increasing the loyalty and frequency of our customer base. The best part is that this strategy will ensure we have a lot of low mileage, late model pre-owned Hondas that we can sell through our certified pre-owned program.
