After completing a lengthy study of the chat providers in the automotive industry, I thought that I would take on a smaller but equally debatable topic - gift cards as incentives to come to the dealership.

As far as I know, there is Hook Logic, Showroom Magnet, and Intice. Am I missing any? If you've used any of these, what was your experience?

I'm a big fan of the concept but I have never really taken a deep dive into the process and results. I am going to be meeting with two of the three next week for certain and if I can nail down a time with the third, it's on. This is going to be quicker than the chat exploration because of the limited number of companies involved, but it might be even harder. From what I've heard so far, all three seem like excellent choices.

If anyone has any insight into any of these services or if you know of others out there, please let me know via email or here in the comments. Thanks!

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We have found them to be counterproductive.

 

It drives traffic that only wants the gift card and has zero interest in buying cars.

 

DS

JD. Like any mass marketing product there may be a lot of "waste" forcing the program to be counterproductive with very little return. (Like a mass marketing mailer). Sometimes you hit. Sometimes you don't.

But let me talk very briefly how I have used "gift cards" on the fixed ops. side.

Although I am talking about smaller volumes here I can say I have had a good deal of success using introductory, special offer "gift cards" to generate more overall business and slightly increase RO count.(We all need an increase, no matter how small!)

At the dealer level I had set up a template in a word program for the letter/card which could easily be updated and changed to suit the target with just a few key strokes and could be printed of as needed. They could be used for any particular item or service you are trying to drive. (Parts, accessories, maintenance, repairs, services, rentals etc.)

Distribution would be at : -

Charity drives.

Auctions.

Raffles.

Fund raisers.

Sports activities.

Auto shows.

Vendor give aways.

Distributed at parts and wholesale counters and other department in your dealer group. (Driving consumers from one department to another)

Or : - Designated for birthdays and holidays.

Or any appropriate gift giving activity.

Though small compared to many marketing activities, it can be easily controlled and targeted and a hidden benefit -  it gives the dealer some kudos regarding community activities.

Hey JD & Bernard - 

From a marketing perspective, before you start any promo/campaign of any kind, you always need to have a target market in mind (professionals don't spray & pray). Consider the demographic a dealership is actually targeting with a price/gift card-driven campaign - the penny-pinching, price-driven crowd. Not that that's a bad thing, mind you, but it absolutely will not produce long-term customers who are loyal to your brand. 

As soon as your competition has a better offer or a lower price, your "customers" are no longer yours...and what would you rather spend ad dollars on - producing long-term customers who are loyal to your dealership or producing a one-time quick buy because you gave them a screamin' deal?

I actually wrote a blog post about this recently & the benefits of content marketing versus doing price-based campaigns.

http://www.flexdealer.com/dealership-best-practice-blog/online-mark... 

I'd love to hear what you think & if you've had any experiences that support the benefits of steering clear of B2C price-driven campaigns.

- Ashley

We have also found it to be counterproductive as a sales tool. Taking up time that sales staff could better be using following up on actual buyers rather than test driving someone who is just interested in getting the gift card and distracting thinking about where they are going to spend it after leaving the store. We have, however, had great success with gift cards in other scenarios. We give them away on delivery of each new and pre owned car. We don't advertise this, we just do it. This has been a very successful tool for driving referrals. We underplay it and present it as an "oh by the way, this is our little gift to you to say thanks for choosing us". Customers really like it and feel appreciated. It is done after the sales person is finished presenting the car for delivery and each sales rep handles it differently. One of our people hands it to the customer and tells them that they can go out to dinner in their new car, on us.

That's a great idea, Sue.

Sounds like you've found the sweet spot by offering your current customers a reason to be loyal & love your dealership, yet avoiding attracting large numbers of folks who only want a free gift from you.

Cool idea & neat to hear that it works in practice, too.

We tried HookLogic for several months. For locals, it was pretty much as has been outlined. The mooches come out. But where it did work (at least nominally) was with out-of-towners. We would up the value of the card to $50 or so to people in zip codes an hour or more away and they would be notified via email. These people would mostly be actual buyers. Mooches won't generally drive an hour or more, spending all that gas and time, just to get a gift card.

We use gift cards to enhance show rate once our call center - Cloud BDC -  sets the appointment.  Our statistics on dealers who utilize gift cards in this manner show a higher appointment show and an average of 20-30% more cars sold during any particular campaign.  These stats have been compiled over the past two years and include direct mail and ongoing internet based lead gen campaigns.

 

Been there and done all that until I discovered Braman Group. Melissa Terzi. The gift cards provide a genuine irresistible and compelling reason for customers to show up for their appointment. When used properly you eliminate handing out gift cards to non buyers and our show rates nationally have increased substantially. The math is simple. The more showroom opportunities we can generate through gift card integration the more cars our dealers are going to sell. 

JC

Use a gift card or a gas card for the people who call or are online and hesitent to come into your dealership.

The key is to keep the cost per acquisition down.  You need a high value, low cost - so you can afford to give it to all customers who show up.  Incentives in general consistently show a lift in response and the amount of lift is based on the ad copy and call to action.   Several of our clients have nailed that process and ad copy so people respond favorably and the response is evident.   We offer a quality gift card program that is up to 90% off face value, so instead of paying $25 for a $25 card, we offer a tremendous discount off face value on gift cards that are good at select online retailers with brand name merchandise.   Because the cost is such a discount off face value, dealers are able to offer more consumer value for less cost - all while increasing response rates (due to the higher value).   Of course none of that would work if the customer wasn't satisfied, so our gift cards offer excellent consumer value.   Brand name products, free shipping, no registration process - just straight gift card value at a huge discount.  Bottom-line is that when a consumer is in the market to buy you want to grab them anyway that you can before they go to the competition.  Then you want to make them feel like they got a great deal on the car AND the gift.  Offering valuable and cost effective incentives allows you to do just that.

It all comes down to buying qualified leads.

Whether you pay $23 per lead, $25 for a gift card, pay hundreds on pay per click keywords on Google or Bing it all comes down to marketing dollars for cost of customer acquisition.   Dealers need to look at the marketing focus.

Do they want a quick sale and no opportunity for service business?  (short term thinking) Or do they want to provide an incentive for local buyers that have potential for service, parts and additional sales?    Any incentive can work to some degree and there will always be some mooches but a good BDC or selective wording can weed some of those out.   You could word the promotion, "If you are buying a vehicle this month, we will give you a $50 gift card for a local restaurant to test drive one of our vehicles. If you choose to buy somewhere else, just come back with your new vehicle and we'll present you with our Gift Card for the local restaurant of your choice." 

That insures you are working with real buyers. 

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