Historic Manly Honda Has Fresh Ideas for Long-Term Growth

When a company has a long, storied history and has experienced high levels of success, the temptation is to go conservative, rely on what’s worked in the past and double down on tradition. Those are the companies that play defense and try to hold on to past glories. Those are the companies that cease innovating and stop growing.

Manly Honda is not one of those companies.

Despite a declining market, Manly Honda has steadily increased their annual Customer Pay Repair Orders by 13 percent over the last year, giving a large boost to the Fixed Operations bottom line. This proves that a clear, well-defined strategy, along with the right people, processes and tools to increase service revenue, is a critical component to today’s automotive growth and success.

THE CHALLENGE

The forecast is predicting inclement conditions for retailers. Reports indicate consumers will spend $2 billion less on new cars, and the new vehicle retail pace is expected to reach the lowest mark since 2012, dipping 8.9 percent from the previous year.

With the deflated SAAR (seasonally adjusted annualized rate), decision makers are looking for new ways to maximize Fixed Operations to boost revenue.

One of the most significant challenges dealers face is with retaining the customer after the OEM warranty expires. Statistics show that customer loyalty decreases alongside a substantial reduction in communication with the customer after the initial few years. As contact with the customer begins to decrease with the expiration of the factory warranty, there exists a pivotal juncture where the cost of repairs to the vehicle become significantly higher. A loss of communication with the customer equals a loss of major Service revenue.

THE RIGHT PEOPLE

Fortunately, the Manly family has a long history of ingenuity, beginning with Manly Honda founders, Bill and Lori. While on a business trip to Japan, Bill convinced Mr. Honda to ship a Honda 600s to San Francisco. After hitchhiking to the port upon its arrival, Bill drove the car back to the dealership and sold the first Honda ever in the continental United States! Being the pioneers that they were, Manly Honda quickly became one of the largest and best-reviewed dealerships in the state.

Manly Honda maintains their growth and positive public image by not forgetting why they were able to grow in the first place. A focus on customer satisfaction as well as innovation runs through the veins at Manly Honda as the legacy continues with the next-generation owner, Brian Manly. At his right hand is General Manager Jeff Dantzler, who affirms, “The Manly family has always regarded themselves as a customer service business that just happens to sell and maintain vehicles. From the original founders to today, our customers are members of the Manly family, and it shows in everything we do.”

The dealership is stepping confidently into the future because the team isn’t afraid of what’s to come. Instead, they actively seek out new technology and ideas to better serve their customer base. Nowhere is this as apparent as in the Manly Service Department. While sales may make the potential client a customer, it’s service that keeps that customer coming back.

“There are so many Service Departments who just turn the lights on, sit back, and expect people to come in,” adds Luke Ammann, service manager at Manly Honda. “Those are the people who are falling far behind on technology and innovation. The way I look at it is, I need to focus on outperforming the underperformers.”

CUSTOMER SERVICE, LOYALTY AND GROWTH

With the recent report of decreasing retail sales and projections that consumers will spend less on new car purchases this year, Manly execs are focusing heavily on Fixed Operations. To support this effort, they needed an intuitive, aggressive and comprehensive approach to continue to reap success and growth in a stagnant industry.

To stay on top, Manly Honda decided to partner with industry leader Team Velocity, known for their cutting-edge technology, Apollo, and their ability to target consumers with “hyper-personalized” offers throughout all marketing mediums for both sales and service customers.

“Communication has been a key feature of our strategy,” Ammann said, “whether it’s through mail, digital, texting, email or other methods. We’re trying to get ahead of our competition, so that they say, ‘Wow, they’re doing it. They’re still doing it. They made it work. I wonder what they’re doing?’ We want to have them outside looking in trying to figure out what we’re doing that they can’t do.”

Like most dealers, one of the challenges Manly Honda faced was knowing when and how to communicate with service customers who haven’t visited the dealership recently. $340 billion is spent on car repairs in the U.S. each year, yet dealers only capture 20 percent of their service market potential. On top of that, most dealers are seeing 50 percent of their customers service their vehicles away from the dealership…that’s a big missed opportunity. To overcome this challenge, Manly Honda implemented a new service marketing program run through Team Velocity’s technology platform, Apollo, called DrivingLoyalty.

DrivingLoyalty helps dealers build customer loyalty and boost retention from day one. Most dealers have a service marketing strategy that is loosely based on the last time a customer serviced at the dealership and their estimated mileage. This means, by the time a dealer deems a customer “lost” it could be 12 months or more. With DrivingLoyalty, Manly Honda knows when their customers service elsewhere, what services were completed, and more, enabling them to make better and smarter decisions about how and when to engage customers.

DrivingLoyalty allows Apollo to send out hyper-personalized and relevant messaging to its customers based on the exact vehicle services they need, at the exact time they need them. Apollo also creates personalized websites for every customer, where they can claim service offers and schedule service appointments at their dealership.

By understanding the unique needs of every customer, Manly Honda is able to present more directed, attractive marketing to them. The marketing budget is also made more efficient through ownership verification — offers are not wasted on customers who no longer own that specific vehicle. By using constantly updated consumer data, waste is drastically reduced or eliminated. This level of sophistication allows Manly Honda to deliver real-time relevant messages to the right customer at the right time.

Since implementing DrivingLoyalty, Manly Honda has generated outstanding results:

• Customer Pay Repair Orders are up 13% over last year
• Fixed Operations grossed an additional $127,000 last month on 644 customers that were servicing away from the dealership
• Averaged 84 new active customers per month
• Increased lost customer conversions by 25%
• Averaged 56% new Conquest VINs per month to their active database

This relationship between the service department and its customers has also helped Manly Honda take advantage of opportunities to sell vehicles out of the service lane. Since 2011, the dealership has used Team Velocity’s Apollo platform to target in-market customers before they begin the shopping process. Apollo uses Upgrade Matrix, a piece of technology that enables Manly Honda to target customers in equity positions that would allow them to leave with newer vehicles for the same or even lower monthly payments. In fact, Manly Honda regularly sells 40 to 55 cars a month out of the service lane. In May, 60 percent of the vehicles Manly Honda sold were generated from Apollo’s Opportunity Dashboard and sales from the service drive. Increasing vehicles in operation out of the service lane is just one great way Manly has found to maintain and grow its customer base.

THE RIGHT QUESTIONS, THE RIGHT ANSWERS

“What we try to do is ask the right questions as opposed to having the right answers because we feel the right question will lead us to those answers,” Dantzler said. “Team Velocity asks the right questions when they develop new applications for Apollo, like DrivingLoyalty. They think, ‘What would consumers want? Would customers benefit from pickup and delivery? What do our customers need? How can we engage customers sooner? How can we improve the customer experience?’ These are great questions that we ask as opposed to thinking that we have all the answers. I really think it starts with the right questions.”

Manly soon learned that one major concern their customers have is transportation while their vehicle is being serviced. To solve this problem, the dealership recently eliminated its shuttle service and found another, more efficient method to keep people moving while their car is in the shop. “We’ve switched to Uber Business for one-on-one pickup for customers,” Ammann said. “We call it the Manly Valet Service.”

The dealership also offers loaner vehicles when that option makes more sense for the customer’s specific situation. “Honda has a trademark — ‘Providing service at the speed of life.’ When I first heard it, I took it as truth,” Ammann said. “We provide service at the speed of life and if you do that, you can’t stop what a mom of three is doing to have her car serviced. We’ll come to you and say, ‘Here’s a five-passenger vehicle. You continue on. Transfer your car seats over and go to the game, go shopping or do whatever it is you need to do. When you’re ready to be home or come back, your car will be ready for you.’”

THE RIGHT TEAM AND THE RIGHT ATMOSPHERE

Both Ammann and Dantzler realize that, no matter how intelligent the marketing is or what programs the dealership offers, if their team isn’t on board, all the other work will be for nothing.

“We have a very tight team,” Ammann said. “We are extremely tight, not only as coworkers but as friends outside of the dealership. People here help people move, buy their first home… some of our people had a fire issue during the recent firestorm who needed a helping hand. It all builds employee satisfaction. But I think the direct relationship from (Manly President) Brian Manly to his managers trickles down to all of our employees, and this dealership still has that family-owned feeling, and not the corporate-owned dealerships like a lot of businesses do now.”

“It’s all about purpose,” Dantzler said. “That’s why we’re here, both for the people who work here and for the people in our community. When you attach purpose to what you do and how you’re doing it, when you see how your success can lead to the success of others, it begins to be a lot easier and a lot more exciting to wake up in the morning. You can’t wait to get to work because you’ve got a purpose to it.”

“Our efforts are all aimed at making service easy for our customer,” Ammann said. “We call it the ‘Manly Advantage.’ Having the pickup and delivery, having loaner cars, having choices that are easy… we provide our customers with what is recommended and what is needed, and there’s no pressure to have them make a decision. When they’re ready, we’re ready.”

That feeling has paid off with great reviews and positive word of mouth from the dealership’s customers. “We’re one of the most reviewed dealers in California,” Dantzler said. “And any way you look at it, we’re in the top three. We’re definitely on the podium in the entire state of California when it comes to online reviews. We think it’s really important to know what our customers know. We’ve said it a lot, but it’s not really about what we say; it’s about what the customers say, especially today.”

While proud of its past, Manly Honda isn’t afraid of the future. “Our people understand the vision,” Ammann said. “If we fail, we fail, but we won’t know that unless we try.”

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Turning in the Right Direction

Les Nunez and Lou Bachrodt Mazda plot a course for future success and growth.

Sometimes, to make a difference and turn things around, a leader must throw out the old playbook and write a new one.

That is exactly what General Sales Manager Les Nunez did two years ago when he arrived at Lou Bachrodt Mazda, located in Coconut Creek, Florida. Fast forward to today, and those changes are showing up on the bottom line.

“Before I came in, they kind of ran it like an old-school store,” Nunez said. “The customer came in, they started negotiating and you just grinded and grinded until you made the transaction. Don’t get me wrong; there’s nothing wrong with that approach. It’s just not the proper approach for the clientele we have here.”

Nunez, who has worked for 21 years at various dealerships in manager and general sales manager positions, specializes in taking struggling dealerships and turning them around. “I bring it back to specs and make it profitable again,” he said. “That’s kind of my niche.”

Part of Nunez’s new playbook was making the customer’s visit more of a boutique experience at the dealership. “The complete culture of the store has changed,” Nunez said. “We’ve made it a more family-oriented business. Customers come in and our friendly, helpful staff shows them the vehicle. Once they like the vehicle, we go over numbers. We’re pretty much a one-price store. We don’t negotiate too much. We advertise the lowest price possible and we give the lowest lease possible up front so the customer doesn’t feel pressured once they get here. When they come in, they pretty much know what they’re paying for the vehicle — we just have to tell them the reason to do business with us.”

Nunez said that he believes the auto industry can learn a lot from other industries. “When you go into the Apple store to buy an iPhone, do you negotiate the price on it? You pretty much know what the price is. You just must meet a salesperson or staff member who will show you the features and benefits on the phone and explain to you why you should pay the $599, $699 or $1099 for the phone. They made the experience tailored to the way you wanted it because your price expectation was already there. I’ve taken that philosophy into the car business and it works well, especially for a Mazda customer, because they’re kind of a niche buyer.”

GETTING BUY-IN FROM THE TEAM

Part of the change in philosophy Nunez initiated was to change the pay plan on the sales floor. “The car industry, for many years, was on a strictly commission basis,” he said, “so for the longest time, the whole idea was to try to get as much out of the customer — to put as much money in your pocket as possible. I changed it up. My team, regardless of what the transaction pays the store, gets a flat pay. This means that, no matter what happens, they just have to treat my customers right, show them all the features and benefits of the car, and they’re still going to get their money. This isn’t an industry first — I brought it from my other store — but it was something new to this place.

Along with making the shopping experience better, this change was well-received by the staff as well. Nunez has retained 95 percent of his team in the two years after taking over at the store.

“Once you get the buy-in of the staff, they pretty much just follow the beat,” Nunez said. “They know to treat the customer right, do the right steps and show them all the right vehicles, because they know they’re going to get a paycheck no matter what. So, they just must do it. They present everything properly. It’s pretty easy. Believe me, the problem with this business is that we just overthink everything. It’s basic — treat the customer right and put them in the right car. They know the price. They know the payment. Move forward. That’s all you need to do.”

The numbers coming in show that Nunez’s approach is working. “We’ve taken this store from selling 60 units a month, new and pre-owned, to more than 150,” he said. “Our Mazda store closes at an average of 62 percent with walk-in traffic, so most of the people who make it in the door leave with a car.”

GETTING THE WORD OUT

While the closing rate for incoming customers is impressive — and proves the new sales approach works — it’s crucial that those new customers keep showing up. And, while the dealership’s location has advantages, there are also challenges.

“We serve Coconut Creek, Parkland, West Boca and Coral Springs, and it’s an extremely affluent area,” Nunez said. “The median income in areas like Boca & Parkland alone is about $180,000 for a family, and the houses are about $800,000. Also, I really don’t have direct competition next door; there are only two other Mazda stores within 20 miles of us.” In most industries, a lack of competition in an area is a good way to corner the market and maximize the bottom line. In auto sales, however, being the only game in town can have a downside. “It is and it isn’t (an advantage), and here’s why,” Nunez said. “It would be a little better if we had more stores because we’d have better access to inventory.”

To make the most of every opportunity, marketing is a key element of Lou Bachrodt Mazda’s plan. Recently, the manufacturer revamped its marketing co-op package, and the dealership had to adjust its strategies and make the most of its budget. “The game changed back in September,” said David Lowitz, Marketing Director of ValuInsight, the dealership’s in-house agency, “and we’ve had to change with it.” For the past six months, with the exception of a unique direct mail campaign, almost all marketing the dealership has done has been digital. “No radio, a bit of cable television and nothing else,” he said.

To assist them and to bolster those marketing efforts, the dealership brought in Team Velocity last year to assist with various types of digital marketing. “Team Velocity has been a huge part of our growth.” Lowitz said. “Their platform has allowed us to completely focus on reaching our best targets in the right geographic areas at the right time, then ‘capture’ those people and help us get more deals done. Team Velocity has become the focal point of our marketing.”

“What we’ve done with Dave’s help and with Team Velocity is expand our customer conquest map,” Nunez said. “We attract the customer with a good hook through a combination of direct mail, email and retargeting. Then we bring them into the store, show them the way we do business and it works.”

“I think we really hit our stride with Team Velocity in the beginning of the year, and I’ll give you some examples,” Lowitz said. “Q1 ’18 vs Q1 ’17 we’re up nearly 80 units. This March we did 100 new versus March of ’17 when we did 62.”

To be truly effective, Nunez said, marketing and the sales approach need to complement each other. “Here’s the thing; unless the customers know where you’re at, unless they know what you’re willing to do, they won’t come in the store,” he said. “The
days of people just going from store to store ended years ago. SEM, targeting, area targeting, customer targeting… it’s the business. That’s what it comes down to. That’s where we are today.”

“I think a big part of the store’s success has really been Les’s philosophy first and then the advertising second, specifically the marketing we’re doing with Team Velocity,” Lowitz said. “Without his philosophy, I don’t think it would’ve worked as well as it has.”

MAINTAINING AND BUILDING RELATIONSHIPS WITH SERVICE

In addition to marketing, service is the other way dealerships can keep customers coming in and building all-important relationships. As with the other elements of his strategy, Nunez and his team have taken an aggressive approach to making sure the customer has a great experience.

“Early in the year, we introduced a maintenance plan at a very discounted rate,” Nunez said, “and I’m talking an extremely discounted rate — almost as a gift to our customers so that they come back to us and service with us. Yes, the initial hit of selling the package costs the store a little bit of money, but if you look at it in the long run, we retain those customers.”

In addition to this service, Lou Bachrodt Mazda is also making efforts on the marketing side to bring existing customers back and bring new ones in. “We now are targeting customers in different ways using Team Velocity in intervals of 60 days, 90 days, 9 months and 12 months. We also signed up for a package where we try to target customers in our area, within a given radius of our location. We target various consumer types to bring them to the store for service. For instance, customers who have not been to our dealership for a long time will get a different offer and different coupons than someone who has been here recently.”

Lou Bachrodt Mazda uses Team Velocity Marketing’s Apollo Technology Planform® to manage integrated marketing campaigns for sales, service and equity mining. Apollo automatically generates and deploys campaigns across mail, email and digital advertising, offering consistent messaging and branding, and provides a web-based dashboard to track results in real-time.

PRESENT SUCCESS AND FUTURE PLANS

While Lou Bachrodt Mazda is enjoying a surge in sales, Nunez knows that to maintain growth and keep the numbers moving in the right direction, he and his team must keep an eye on their efforts, plan for the future and make adjustments when necessary.

“If you want to be successful, you have to know what you’re fighting against and how you’re going get there,” he said. “You can’t just go blind. It’s fun though. I’ll be honest with you; when the car business stops being fun, it’ll be a different day for me. As long as it continues to be fun, though, we’ll keep doing it. There’s no a doubt about it.”

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Equitable Deals from Equity Data

Morehead Honda Finds New Ways to Drive Sales

Founded one year after World War II, Morehead Honda is steeped in tradition. The family-owned dealership, located in Newburgh, New York, has served generations of drivers in the Newburgh, Poughkeepsie and Monroe area. Through the years, the dealership has seen many changes in the auto sales industry — both in automotive technology and in the way consumers shop for vehicles.

To stay relevant and meet the needs, desires and demands of the modern automotive customer, Morehead has had to develop new ways to provide sales and service opportunities to its customers, including creating a position that would have been unheard of just a few years ago: an equity consultant.

Nikkole Daya started with the company in 2013 in the BDC department. As her skills grew and the dealership started seeing the potential of selling cars from the service lane, her transition to the newly formed equity consultant position was a natural step.

“When I was hired at Morehead Honda, I had no experience in the car business,” Daya said. “I started as a BDC agent and thought it was going to be a simple telemarketing job. But then I ended up doing a lot of business development and lead generation.” When the BDC department was reorganized, the dealership’s leaders chose Daya to head a new initiative — one they hoped would help the dealership grow in the future. “They made this position for me, which involved data mining and using equity tools. At first, though, no one had any idea how to use the tools. It was just me attending Webinars and trying to see what would work.” From these unsteady beginnings, however, Daya started to build a presence.

“We turned out to have great success with it,” she said. “We’ve made a lot of money.”

TURNING EQUITY INTO SALES

“As an equity consultant, what I do is data mining,” Daya said. “I reach out to customers. Some of which are people in our service drive and appear to be in good equity position to roll over into a newer car. In other cases, I’ll do a lot of cold calling just to see if they’d be open to an appraisal. My approach is that we can either try to buy their vehicle outright from them if it fills our inventory need or roll their existing equity over into something newer or different for them.”

This approach is new for a lot of Morehead’s customers, and Daya has found a lot of success by just informing potential sales customers of their options. “A lot of times, when people are not really educated about the car business, they find out they can get a really good deal,” she said.

While selling to consumers who aren’t even in the market for a new vehicle is great for the dealership’s profitability, Daya maintains her focus on making sure the customer is getting the best deal they can and is satisfied with the process. “It’s nice to see how it works,” she said, “to see what people would be open to. I get so much gratification when people realize they can upgrade to a nicer vehicle when they weren’t even thinking about it in the first place. It’s a great sense of accomplishment.”

Morehead Honda uses Team Velocity Marketing’s Apollo Technology Platform to manage integrated marketing campaigns for sales, service and equity mining. Apollo automatically generates and deploys campaigns across mail, email and digital advertising, offering consistent messaging and branding, and provides a web-based dashboard to track results in real-time.

To assist her in these efforts, Morehead Honda has used several technology tools to find customers who might be receptive to a sales presentation. They recently put into place Team Velocity’s Apollo platform, which allows Daya to identify prospects who could be in the market for a vehicle based on their equity position. It also allows the dealership to generate dynamic marketing campaigns in multiple channels and track their progress and efficiency.

“Apollo has been a great tool for me because it helps me filter customers who might be interested in getting into a new vehicle out from the rest,” Daya said. “It also allows me to view their recent vehicle information and identify their equity position before I contact them.” With the help of Team Velocity, 30% of sales with a 49:1 ROI have been attributed to Apollo.

This technology allows Daya to be proactive in her presentations. “We have a portal that will literally show me if someone is clicking on certain models on our Website,” she said. “It gives me an instant notification of consumers who are displaying any interest at all. Often, I’ll be able to reach out with an email to let them know we’re here to help.”

When she first started in her position of equity consultant, Daya sold an average of six vehicles a month. Now, with more experience and new tools like Apollo, she’s averaging 20 to 25 vehicles each month, a 316% increase. “It’s something we’ve nurtured for so long over the years,” she said, “that we’ve learned what kind of process is needed for this kind of sale.”

Daya has also found that selling from an equity position can be a cross-generational success. “There’s no real direct audience, as far as age range goes,” she said. “It’s all about the timing. Someone might have just gone through a divorce and they want to get rid of their car and get into something newer. They might have a son or daughter going to college and they’ll need something to ride around in or they might have recently retired and want something different that meets their new needs. This program can reach everyone.”

By offering something customers might not have even known they wanted, Daya said that this kind of sales approach can also rehabilitate some of the negative stereotypes that often goes along with sales. “Sales guys have gotten such a bad rap over the years,” she said. “There are times when we might get a customer saying, ‘Why should I buy a Honda instead of a Subaru?’ They might think we’re trying to put one over on them, or something like that. Once you show people that you actually care about their situation, you pull that wall down. They have a pleasant experience and that leads to referrals and even more people.”

Sometimes, the best thing someone in sales can do is simply ask for the business. “The important thing is just having someone to break down the barrier and let them know their options,” Daya said. “I leave them with no obligations, but once people sit in the new car, they really sell themselves.”

COMMUNITY STANDING

This outreach is important to maintain Morehead’s position in an aggressive market. The Honda dealership faces direct competition from nearby Nissan, Kia and Toyota dealerships. “We’re contending with some really good brands that are up and coming and who have brand new showrooms that we’re competing with,” Daya said. One of the dealership’s major strengths, however, is its position in the community. “The Morehead family name is really something that has been built to last for quite some time now,” she said. The dealership has been a familiar site to the Newburgh area for more than 70 years and is very visible because of its community outreach. It sponsors, among other things, charity golf outings, cruises, ethnic festivals, pet rescues and concerts. This reputation allows for better sales because the community is familiar with the dealership and has a certain amount of trust in the company. Daya wants to build on this trust with the customers she contacts.

“I love what I’m doing now and how my position has transitioned into because I can nurture customers more than ever before,” she said. “I really love making them feel comfortable and making sure they have a great time with us. I really try to take care of them. It’s near and dear to my heart because it’s something that I put myself into every day. Obviously, the results are there. If you take care of people, they’ll take care of you.”

The family atmosphere generated by the Moreheads is also key to this trust, not only in the community but on the Morehead Honda team, as well. “The Morehead family has been so great to me,” Daya said. “That’s why I love coming to work. When you love what you do, it’s going to show.”

While she is a department of one now, Daya said she receives tremendous support from the dealership’s team and envisions a time when her department will not only expand in future growth but in profits as well. “I’m just really proud of how far we’ve come over the years,” she said. “We have a good team in place, and I’m so excited for the years to come.”

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