How this dealership group keeps customers coming back: Text messages

The numbers told a stark story to Helmi Felfel. How many unread emails were in his inbox? More than 5,000. How many unread texts were on his phone? Zero.

In the midst of rethinking his marketing and advertising plans, Felfel, president of Planet Automotive Group, realized he needed to move beyond traditional outreach and include texting in his efforts to better engage customers across his three Charlotte, N.C.-area dealerships.

"You can call them, and they'll put you on 'ignore,' " Felfel said. "You can leave them a voicemail, and they won't listen to it. You can send an email, and they won't open it. People are busy. I know I am. So to ask people to dedicate a certain amount of time to read an email or talk to somebody? Doesn't happen. But on a text — on their own terms — they seem to want to make it happen."

Over the past year, he has been utilizing a digital advertising solution called Chatterspot that has served as a fresh advertising avenue for his two Mitsubishi stores and his Kia store, the latter of which has been in operation only since October 2020.

At once, it has reduced the time and effort Felfel and his staff have devoted to conceiving and executing marketing campaigns. On slow days, an old-fashioned approach might necessitate employees manually combing through records, then cold-calling customers who have not visited the service department in some time.

Chatterspot automates that process. It connects to a dealer management system, harvests the relevant information and emails or texts coupons and deals to the target audience.

Planet Mitsubishi has added nearly 12,000 customers who have opted in for texts in the past 12 months. On specific texting campaigns, the dealership has seen engagement rates of 70 percent. Felfel's dealerships still use traditional methods of advertising, and he concedes that his customers might have been influenced by those collective efforts. But with Chatterspot — which can also send emails — the results are immediate.

"Yes, the customers might have been touched three, four, five different ways," Felfel said. "But the bottom line is with this, they respond."

In a new-car sales promotion conducted in May, the dealerships sent 451 texts that directly generated five sales and $10,000 worth of gross profits, according to Felfel. In a June buyback campaign, he sent 2,705 texts that generated $37,000 worth of gross profits, he said.

"For us, that's a big deal," he said. "You can cut that number in half, and I'm still a believer."

What he further likes is the minimal attention he pays to the advertising. Felfel, 55, says he spends 10 to 15 minutes at the beginning of each month planning scheduled promotions. Then he'll augment throughout the month as needed. If the service bays are open, he'll use that as an opportunity to seek out customers who haven't visited the dealerships in more than a year.

"The coupon from the Sunday newspaper has been replaced with the Chatterspot text," Felfel said.

The root of the success, he believes, is not the text of the text, per se, but the experience provided. The coupons are an online version of a scratch-off lottery ticket — recipients are enticed into taking action to see what sort of discount they'll receive.

Chatterspot's origins lie within the marketing software originally created for wireless retailers. Verizon was the largest user of the software. In 2018, Banyan Technologies Group, a capital firm focused on the automotive aftermarket, began using it in the automotive realm.

About 150 dealerships across the country are now using Chatterspot, according to Tanvir Arfi, chairman and CEO of Banyan.

Infusing the coupons with specificity is what makes it enticing. It's more than a generic offer. Chatterspot understands if a customer hasn't been in the dealership for 12 months as opposed to 15 months, and it knows the individual interest rates customers are paying on their loans.

"It makes the offers much more aggressive," Arfi said. "This is one of the best drivers. If it's just software sending a reminder to come in, that customer might come in anyway. But if Chatterspot sends a dealer traffic from someone who's not been in for 15 months, a dealer will look at that as value."