Volkswagen of Oakland is a single-point store in the heart of downtown Oakland, California. The area is enjoying tremendous growth, thanks to new technology companies setting up shop, an overflow from San Francisco and new neighborhoods being built to meet the demand of people moving to the city. While being located in the middle of a growing city doesn’t sound like much of a problem, the reality of being a one-roof store competing with much larger dealer groups might make you think differently. This reality, however, hasn’t slowed Chris Murphy, sales manager at Volkswagen of Oakland. His father, Mike Murphy, bought the store 20 years ago when it was selling 20 cars a month. Since then, they have supercharged the entire dealership and now sell more than 200 cars a month.
This growth did not happen overnight, though. Volkswagen of Oakland had a challenge competing with the neighboring dealerships that are part of big dealer groups. Those dealers have a significantly larger ad spend budget, and that discrepancy in budget posed a problem when Volkswagen of Oakland wanted to compete on a digital front. They had to think of a way to both spend less and spend smart. They knew they needed to communicate to the right customers and get their message out to the community.
Another challenge facing the dealership was leveraging the service department as a tool to increase growth. Service in any dealership can be a challenge if it is not utilized correctly. It’s a crucial part of the dealership that can be a huge growth generator, but is often overlooked and pushed to the side. It can be hard to mesh the efforts of the sales and service departments and get them to pull together for the good of the dealership as a whole. Chris Murphy knew that one of the greatest assets at their dealership is the loyal customers who frequent the dealership’s service department. He wanted to come up with a way to restructure the department where they could convert that experience into more sales and do it on an advertising budget that Volkswagen of Oakland could afford. He knew there had to be a better way to not only service a car, but make it a full-service sales cycle. He knew that this idea needed to focus on a specific audience, as well. How could he create a program to transition current customers into new vehicles?
Here’s how they did it…
THE RIGHT MESSAGE, THE RIGHT TARGETS
With the help of TeamVelocityMarketing.com, Murphy and his team were able to crack the problem and accomplish it all. By using Team Velocity’s calculated formula to target Volkswagen of Oakland’s unique market, the dealership was able to effectively and efficiently market its message through both traditional and digital forms of advertising. This is important because, while the average age of their dealership’s customers is in the mid-40’s, the dealership is expecting a demographic shift. With the growth in the market, Murphy knew that his dealership needed to also pave the way for the Millennial customers who are starting to come through the door. By combining multiple forms of advertising, Volkswagen of Oakland is able to reach all of their unique customers using data recommended from Team Velocity.
GETTING ON THE SAME PAGE
Once advertising increased the dealership’s traffic, it was time to get everyone in the dealership on the same page. There often seems to be a divide between sales and service, but this was eliminated at Volkswagen of Oakland though communication — the dealership’s management held meetings with employees, went over numbers and statistics,provided training and generally explained the big picture and everyone’s part in it.
UPGRADE FOR TRADES
The dealership also incorporated an Upgrade Program for their store. Once a customer comes in for service, they are greeted,updated and educated on the opportunity to upgrade to a new vehicle for little or no extra money. The end game is to get more vehicles in the sales cycle, upgrading the customer into a new vehicle and reselling their old vehicle. This creates a long-term vision for Volkswagen of Oakland, rather then a series of short-term solutions, by providing a full-service sales experience.This new vision is not only incredible for the dealership, but it is exciting for the customer,as well. This increases the customers’ loyalty to the dealership and keeps them coming back to the store. Volkswagen of Oakland started the upgrade program in May 2015 and, by August 2015, the dealership had the biggest sales volume in its history.“We are delighted to have an engaged partner like Volkswagen of Oakland, who has taken the liberty to dive right into the Upgrade Program,” said Justin Byrd, president of Team Velocity Marketing. “They were hands on during the integration process and have truly embraced the Upgrade Program, which has made this a success.”
MAKING A DIFFERENCE
Recently, Mike Murphy has taken a larger role in running the dealership’s philanthropy efforts. Mike founded the Love from MargotFoundation, a charity that provides financial,medical and spiritual support to low-income and under-insured women who have been diagnosed with cancer and are struggling to pay the bills while undergoing treatment.Mike started the foundation after his wife,Margot, passed away from breast cancer several years ago. Going through that experience, Mike saw the hardships families encountered as they navigated the hospital stays and doctor visits, and wanted to find a way to help. (For more information about the charity, visit LoveFromMargot.com.)
In the meantime, Chris has since started to run the dealership and strives to stay one step ahead of the competition. Now that the dealership’s Upgrade Program is successful and, on average, sells from 25 to 33 cars out of the service drive per month with an average of 938 CP and WP, he is focusing on staying at the top of their customers’ minds by creating monthly service specials, using the same calculated formula that Team Velocity determines. This is just one more way to bring customers into the dealership on the service side. “The service department customers are the best and they are the customers we want to keep,” Chris said. “It is definitely our top market.”
The Upgrade Program has become the cornerstone for Volkswagen of Oakland. In utilizing this tool, the dealership now has an advantage to compete with the surrounding larger dealer groups. Since they implemented this program in 2015, the dealership has seen an increase of 29.82 percent in sales, 21.93 percent in pre-owned and 42.04 percent in same-brand trades.
Through utilizing the tools already at hand— and seeking help to use those tools more efficiently — Volkswagen of Oakland is coming out ahead, even while facing bigger, better-funded competition and a changing customer demographic.