Honda of Downtown Los Angeles LA’s Rising Star
How LA Honda Went From Zero to Top 100 in 24 Months LA Honda’s success story plays out like a Hollywood movie. Joe Shuster, relocated from New York to Los Angeles to revive a dying store in one of America’s most competitive markets. When construction on his new store begins, Shuster encounters unexpected challenges that force him to reinvent his strategy. Shuster hires Tier10 and together they beat the odds, moving the dealership up over 1000 places in Honda’s national rankings to become one of the most successful dealerships in the country.
When Shuster bought Honda of Downtown Los Angeles (known as LA Honda) in 2011, it was a deteriorating facility that was bankrupt and operating exclusively as a vehicle service center. With no inventory and no sales team, he was literally starting at zero in one of America’s most competitive markets. Worst of all, getting the facilities up to speed would require a significant capital investment at a time when America was in the midst of an economic downturn. However, where others saw disaster, Shuster saw opportunity. He used the dealership’s lack of infrastructure as a blank slate to introduce a new sales team and implement a bold “one dealership” management strategy that helped him turn a struggling service facility into a full service dealership generating over 200 deliveries per month. Shuster quickly discovered that his new “blank slate” had its pros and cons. On the pro side,
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there were no long-term software contracts or bad sales habits to break. On the con side, there was no meaningful local brand to build on and there were no benchmarks to draw from to help him create his game plan. He would have to hire a new sales team, create a new local brand and design his sales and marketing strategy from scratch and all while managing the construction of his new building. “It was a crazy time”, says Joe Shuster, President and Dealer Manager of Honda of Downtown Los Angeles. “I needed a sales team that I knew could deliver so I invited my top performers from New York to join me in California. I told them that they could stay at my house until they got on their feet and, thankfully, many of them took me up on it. We were sleeping on couches and working crazy hours but we were making it happen. It was great!” With his sales team in place, Shuster and Tier10 began putting their sales and marketing strategy together. “We quickly discovered that LA and New York are very different markets”, says Shuster. “California is very tech savvy – more so than New York. These consumers require a different approach to marketing. Everything is online. We had to explore different types of media in order to create an effective strategy.” The stakes were high so Shuster brought in Tier10 to do a thorough market analysis and help him design a comprehensive marketing strategy that combined traditional and digital media sources to drive business to all of his profit centers. Af ter careful consideration, they decided to execute a strategy that would target customers with the highest statistical probability of buying and servicing at their dealership and implement a cross-depar tment approach that focused on delivering consistent branding and messaging across all tiers of marketing - research, traditional, digital, targeted direct mail,
publicity, reputation management, niche, merchandising, and retention. The key to their success would be avoiding the traps that were causing other deal er s hips to rec eive dim in ishin g returns from expensive and difficult-tomeasure mass marketing. In contrast, LA Honda would focus on seizing new profit and growth opportunities by expanding their advertising into areas where their competition wasn’t being effective.
what they saw in the showroom, etc.. This increased conversion rates across the board and also closed the communication gap that often occurs between the marketing department and the sales team.
“We knew we were on to something when we sold 143 cars in our first month”, says Shuster. “By Q3, we were selling 200 vehicles a month which allowed us to finish our first year at 134 in the national rankings. In 2013, we continued to build on this strategy and increased sales by 15% which put us in the top 100. We have a long way to go but that’s not bad for a store that literally started from zero.”
Executing a complex digital marketing strategy that has many moving pieces can be confusing and very time consuming, especially if a dealership is trying to coordinate campaigns across multiple vendors. To avoid this problem, Joe Shuster identified the components he felt were essential to his strategy and sought out a partner that could execute all of his campaigns as part of a single solution. Doing this allowed him to easily execute complex campaigns across multiple platforms without having to compromise performance due to product overlap and without having to spend hours of time each month juggling reports to figure out who actually delivered the desired results.
The first thing Shuster and his team did was pull the metrics from all of his campaigns into a single, easy to understand dashboard. This allowed them to identify what was working and what was not working without having to make sense out of 20 separate reports.
“One of the biggest advantages to this approach is the extra hours I get back each week. Having a single point of contact allows me to spend more time managing my store and less time juggling meetings and phone calls”, Shuster added.
The next step in their strategy was standardizing the dealership’s branding across all departments and across all media sources. This allowed them to create a consistent brand experience for their customers so that what they saw online matched what they saw in their mailboxes and what they saw on TV was the same as
A perfect example of LA Honda’s integrated marketing strategy is their “ Vehicle Exchange Program”. This is an ongoing program that remains in place year round and serves as the backbone for all of the dealerships seasonal promotions.
“We knew we were on
to something when we sold 143 cars in our first month.”
- JOE SHUSTER
HERE’S HOW THIS PROGRAM WORKS First, they standardized all of their creative assets across all advertising sources so that everything the customer saw looked like a national brand. Next, they identified all the ideal prospects that live in their ideal market area. These are customers who can upgrade into a newer vehicle for a similar or lower payment who live in zip codes that have historically generated the highest gross profits in sales and service.
Honda of Downtown Los Angeles
From there, customized messages are sent via email and direct mail to every qualifying prospect that compares the customer’s current vehicle to the suggested upgrade vehicle and outlines the advantages of upgrading. These messages drive customers to a special offer site that shows all of the dealership’s sales and service offers. This site is specially designed for conversion and generates up to 500 leads per month. To support these campaigns, targeted search, display and pre-roll campaigns are launched to increase traffic from search engines, social media sites and 3rd party sites.
Finally, the campaign is reinforced by “Exchange Program” point-of-sale signage that the customer sees when they enter the dealership from the showroom and in the service lane.All of this works together beautifully to turn in-market shoppers into prospects, prospects into ups and ups into customers. Every campaign LA Honda does follows a similar formula and the results are extraordinary. On average, this strategy delivers 500 web leads, 1200 phone calls and adds 200 active customers to the dealership’s database every month.
“Every dealership says, that’s my customer. What you want is for customers to say, that’s my dealership.” said Justin Byrd, President of Tier10.com, LA Honda’s marketing and advertising partner, “We’re there every step of the way to achieve that goal.” “Being in the top 100 is a great feeling but the work here is just beginning”, says Shuster, “We believe getting into the top 15, 10 or 5 is achievable and we look forward to the challenge. We are a team so whatever we achieve, we’re all going to celebrate together.”
Honda of Downtown Los Angeles
“We add nearly 200 active customers to our database every month.” – JOE SHUSTER 202
JUMPED SPOTS IN 12 MONTHS
0 DEC 2011
MONTHLY RETAIL SALES
ACTIVE CUSTOMERS ADDED IN 2013
IN A NUTSHELL
LA’s Rising Star
How LA Honda Went From Zero to Top 100 in 24 Months • Identified areas of weakness and opportunity by pulling data from all marketing sources into a single dashboard. • Increased internet and phone leads by unifying marketing messages across all advertising mediums and targeting customers with the highest statistical probability of buying and servicing at LA Honda. • Increased average revenue per customer by focusing on cross-promotional advertising that targets customers based on their historical interactions with LA Honda and presents offers from all of the dealership’s profit centers. • Increased overall productivity by using a single full-service marketing agency, like Tier10.com, to simplify the execution of marketing activities across all tiers of advertising. Å READ FULL STORY