Part 1: Q&A With Hyundai Of St. Augustine General Manager, Andrew DiFeo

Part 2: Q&A With Hyundai Of St. Augustine General Manager, Andrew DiFeo

DrivingSales News recently sat down with Andrew DiFeo, the general manager of Hyundai of St. Augustine, which opened in May 2008. In part one of a two-part interview, DrivingSales News sought to learn how DiFeo has found such strong success. DiFeo has made a name for himself as a truly innovative dealer who has led his award-winning store using hands-on leadership. The conversation with DiFeo is presented in a Q&A format.

Q: What are the founding principles of your store?

DiFeo: “We wanted to start with three founding principles when we opened the dealership in 2008. We The first one was, the CRM system was going to be the backbone of the dealership … I observed at most dealerships all of the data from sales to service perspective wasn’t being entered into the CRM and if it was being entered nothing was really being done with it. So, our first founding principle was everything that we did, whether it be in sales, service, parts, F&I, etc. was going to be documented in the CRM system.

The second founding principle was in 2008, we wanted to make sure that we were very focused on digital marketing at the start (beginning) of our dealership.

The third founding principle was that we really wanted to focus on our online reputation. Online reputation wasn’t that big of a thing back in 2008, but word-of-mouth advertising is the best form of advertising because it’s relatively free. On the flip side of that, it could also be the most dangerous because if you have a bad reputation that could spread quickly. Before the Internet existed, it could spread but not as quickly as it can with the Internet.

Q: What reputation management sites do you track and follow?

DiFeo: “We were very early adopters of DealerRater. We ended up winning the dealer of the year for the Hyundai brand in the nation for three years, for 2010, 2011, and 2012. The other sites that we look at are Edmunds and Cars.com. Again, just because these are sites where people are researching vehicles. We want to make sure we have a presence there. Now, over the last couple of years we’ve really increased our focus on Google and Facebook. We focus on the reviews on Google and Facebook. We listen to Twitter for mentions about our name and we respond obviously very quickly if there are any negative mentions.”

Q: How do you monitor social media?

DiFeo: I do it internally as the owner, dealer principal and general manager of the dealership. That’s our reputation on the line. By having the general manager or the principal address those concerns, they have the total authority if they feel that it is necessary and they can turn a dissatisfied customer into a satisfied customer. The quicker you can address a customer’s concern, the more likely that dissatisfied customer will turn into a satisfied customer.

Q: How has reputation management affected your bottom line?

DiFeo: We started (in 2008) only selling about 50 or 70 cars a month. Today, we average during the good selling months, over 200 new and used cars a month and typically we’re around 180 new and used. Our record, we did over 240 new and used in one month in 2013. We have a high amount of repeat and referral business. Almost 60 percent of our business on a given month could come from referrals and our repeat business. Our retention rate is close to 65 percent on our repeat customers and in service.

Q: In most dealerships, there can be quite a big divide between sales and service. It sounds like you include the service manager on a lot of the same meetings as your other managers. How has this helped you make long-term customers?

DiFeo: The old adage of, Sales sells your first product, Service will sell every future product is part of our core reason for being. The Sales Department understands that there has to be cohesiveness between Service and Sales for them to have repeat referral business. Once a customer does purchase a vehicle from us, we feel it’s very important to set that first service appointment. It’s really important to get that first service reservation in there. The statistics show that your loyalty rate goes up significantly for both service and future sales when that customer makes at least two visits into your service department. We hover around 90 percent setting up a first service appointment at time of sale, which is about 10 percent higher then what the region and the nation are. We feel like we’re doing a pretty good job there.

Q: What has your experience been with data mining?

DiFeo: When it comes to Sales, we use Revenue Radar, which is part of DealerSocket’s CRM system. We also use our Captive Finance Company. Hyundai Motor Finance provides us on a monthly basis a variety of lists of customers that are good candidates to trade in their car or when their leases are up. We also do data mining through our CRM system on the service side as far as, customer’s predictive mileage and when they might be ready for their next service. On 36-month leases our return to market is 21 months. Finance contracts that typically hover on average of around 65 percent for 60 months, our return to market is 28 months. On cash deals and drafts our return to market is 31 months.

Q: Who does the data mining?

DiFeo: It’s automated through Revenue Radar, but then there are alerts that pop up on both the salesperson and sales manager’s desktop everyday of what customers are eligible for that. On a weekly basis, we review the lead list from Hyundai Motor Finance to make sure that those customers are being followed up with. Then, our service department or service manager on a weekly basis will send out the mailers to these customers. We also have a lot of automated systems to both DealerSocket and Hyundai’s communications systems to reach out to the customers.

Q: How do you gauge customer retention?

DiFeo: We typically just look on a monthly basis, how many of the cars we sold were of existing customers because there’s got to be a certain amount of customers that you conquest. So, you have find people new to the brand and you also have to have your loyal customers. We hover around 55 percent to 60 percent of our business every month is from our current owner base.

Q: What’s your digital marketing strategy?

DiFeo: Right now our marketing mix is 75 percent digital and then 25 percent other, which consist of direct mail, to both our current owner and some conquest marketing, our local community sponsorships that were a big part of the community and then we just added back in some cable television.

Q: How did you come to that percentage split of 75 percent digital, 25 percent traditional?

DiFeo: We look at organic search traffic as a great way to determine whether you need to rake in more traditional forms of awareness advertising. When you start to see that trend downwards, it might be time for a little bit more traditional media to create that awareness. If it starts to trend upward, as long as you’re comfortable with your ad budget, you can keep doing what you’re doing or you might even reduce a little bit if you just want to put a little bit more to the bottom line. Again, as soon as you see organic traffic starting downward, there needs to be some more awareness advertising.

Q: Who does your marketing? Do you outsource it? Do you have an internal digital marketer?

DiFeo: The marketing is done by me. I don’t need an ad agency expense. We save money there and all of our digital partners will work with us on creative. We do have just a part-time person that handles our digital creative, but it’s a minimal expense. I’m pretty hands on with everything. You’ll find that in successful businesses or successful dealerships the leadership is hands on and maybe not doing everything, but at least have a good awareness of everything that affects the business.

Q: Do you use third party leads?

DiFeo: We do. I feel that third party leads are a good part of our marketing mix. We have over the years narrowed our use of third party leads to just select sources. TrueCar being our best performing third party lead source because they’re much more qualified customers then some of the other lead sources out there. We also lean on Hyundai’s lead provider partner Trilogy leads as well as the OEM leads. Those are our main lead sources from a third party.

Q: Can you share what some of the best digital marketing campaigns you’ve done recently and conversely what hasn’t worked for you?

DiFeo: One of the things that we’ve been doing over the last couple of years is conquest email blast campaigns that have worked really well for us. We’ve developed pay-per-click and display advertising campaigns focusing on aged inventory that has not had VIN views. We really want to try to drive the consumer to the vehicles that we want to sell through those campaigns and it’s worked out really well.

Q: Is there a digital marketing campaign, let’s say in the last six months that you’ve been surprised about that’s really helped your business?

DiFeo: The email marketing over the last couple of years has really helped grow our business from a conquest perspective. Another thing that’s really hot is the whole idea of having the transaction done online. For years most websites have had a trade and appraisal tool, a payment calculator, and a finance application, but it’s not been an all-in-one neat package for the consumer. A lot of companies are facilitating that. We’ve been using that for about six months now. A company that we use is called MakeMyDeal, which is part of Cox Auto. We’ve been pleased with the performance. We do see higher close rates with customers that do come through the MakeMyDeal platform on our website because they do seem to like the ability to handle as much of the transaction online, prior to coming to the store or us delivering the vehicle to their home. We do deliver about 10 percent of our business every month outside the dealership to the customer’s home or business.

Q: Has your online transaction strategy helped you extend your customer base outside of your general area?

DiFeo: Over 50 percent of our traffic to our website comes from over 50 miles outside of our store location because we’re not in a major metro market. But, we’re close to a major metro market, so we do offer free delivery anywhere in the state of Florida or Georgia. We let consumers know that, all the transactions will be done over phone, fax, email, scan and the car can be delivered to their door. We always have an F&I manager talk to the customer over the phone to do their value presentation on things like warranties and gap insurance. We can offer those products and sell those products on those deals where the customer isn’t physically in the dealership.

Q: I know you’re more of a volume store and there’s not much negotiation on price, but are there other branding techniques?

DiFeo: One of the initiatives that we are working on this year is, we do need to do a little bit better on branding ourselves and creating our “Why Buy?” message on our website and having our staff page updated. One of the things is to differentiate your brand without telling the customer that you’re branding different. Just by having an easy to navigate website, with the prices upfront. Not a lot of lead submission forms. If they want to get great prices, just give it to them. Don’t ask for their information. Having photos of your new car in inventory. Having vehicles without, “call us for price,” or three or four photos. Things like that.

Be sure to keep on eye on DrivingSales News next week when we will publish the second installment of this interview.