A Primer on Beacons and How Dealers Can Benefit From Them

By David Metter

As we head into 2016, one of the most exciting new technologies that some dealers are experimenting with are beacons. Beacons are small, inexpensive hardware devices that can be attached to a wall in the showroom or placed around a dealership's lot. Using Bluetooth technology, the beacon detects nearby smartphone devices and can send customers push notifications with a welcome message, mobile coupons, or promotional information. 

Beacons are already in use at several large retailers, such as Target, Macy's and Simon Mall Properties. Currently, beacons can only communicate with customers' smartphones via an app. For smaller retailers including auto dealers, this has presented a barrier to adoption because most stores don't have their own branded apps. However, the ability to tie beacon technology to Apple Wallet and Google Wallet changes this dynamic. If a consumer saves a dealership's event, loyalty card, or offer to their Wallet app, the dealership can use beacons to activate the app and send updated and relevant offers.

It's important to understand the difference between beacon marketing and location-based mobile marketing. Location-based marketing allows dealers to set up a "geofence" or perimeter size of their choice around their dealership. When smartphones with location services enabled cross the perimeter boundary, ads are displayed and messages can be sent to that consumer. Beacons are only used to target in-store customers.

One type of beacon technology is Visual Light Communications (VLC), a system that turns LED lights into beacons that can pinpoint consumer location with extreme accuracy. Any dealership that has indoor and outdoor LED lighting can implement VLC.

ByteLight is one brand of VLC that uses existing lighting infrastructure and Bluetooth Low Energy (BLE) to communicate with smartphones. As a customer moves through the showroom or across a lot, LEDs emit flickering light patterns undetectable to the human eye but visible to the customers' smartphone cameras or BLE sensors.

While a beacon device can tell you the area or aisle a customer is located, VLC is so exact it can tell you the exact product or vehicle the customer is standing next to. This allows you to send hyper-targeted messaging to every customer.

Another advantage of VLC technology compared to other types of beacons is that they draw their power from the lighting grid so they don't need batteries, which standalone beacon hardware devices require.

In retail automotive, a few early adopters are already experimenting with beacons on their lots. Although some retailers are a little apprehensive about the perception that the technology may be intrusive, it won't be long before this type of targeted messaging becomes the "new normal" for mobile users.

For auto dealers, there are three primary applications for beacon technology:

1) Improve Customer Service: Beacons can detect when a new customer arrives at the dealership, even if they don't come directly into the showroom. If a customer is walking around the lot, the beacon alerts the sales team inside the dealership and displays the customer's location. A salesperson can then be dispatched to that location to help the customer.

2) Track Customers: Beacons can aid in the gathering of big data that will help dealers better understand consumer behavior. When customers arrive on your lot, where do they go first? How do they move around the showroom or lot? Is there a difference between the movements of customers who purchase a car and those who leave without purchasing? In the latter case, if a customer's behavior pattern indicates they're getting ready to leave without purchasing, the dealership could send a sales manager or a push notification with an attractive incentive to stay.

3) Hyper-Targeted Messaging: Imagine a customer who is walking through the lot, then stops to look at a particular vehicle. Suddenly the pricing and monthly payment information for that exact vehicle pops up on their phone. Or, a special interest rate or cash-back offer that is available for that model and that customer based on their credit score and other factors is displayed. The ability to do this already exists. For auto dealers, it's just a matter of time before the mobile customer expects this type of personalized promotion, at which time adoption will become mainstream.

Beacon technology has the potential to completely transform the auto purchasing process. But before running out to implement it, consider where you are in your entire mobile marketing strategy. It's a good idea to master the basics before trying out the latest and greatest technology.

Mobile basics to be mastered first include: What is the user experience for your mobile website and mobile landing pages? Have you created successful mobile ad and texting campaigns? Do you have a good understanding of mobile metrics? Once you get the basics down, then it makes sense to start experimenting with beacons to see how they can improve your customers’ experience.

8 Things Dealers Can Do To Increase Their Show Rates

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When handling Internet leads, the lack of response by customers, the appointments that don’t show and the unrealistic expectations often frustrate internet managers and dealers. Show and closing rates in the low to mid-teens is not uncommon, compared to the total number of leads received.

I thought I would share some best practices from my observations working both in and with dealerships, that can be used to increase the number of customers contacted that actually visit the dealership.

1.    Respond promptly – One of the most common setups in Internet departments is to have Internet sales managers (ISM) also serve in sales positions. A typical pay plan will see an ISM compensated by sales commissions, so that is where there focus will be. Therefore, when a customer comes in for an appointment Internet leads get ignored until the ISM is done with their customer. Which, in the event of a sale, could mean that the leads coming into the CRM are ignored for hours. A quick lead response exponentially increases the chance of contacting and further interesting the customer.

2.    Provide Information – ISMs typically use templates to contact customers once a lead is received, which usually contain information about the dealership and its value proposition, along with an invitation to visit. However, far too often the first e-mail fails to contain the one thing that the customer is expecting – vehicle pricing. It’s important to consider the source of the lead when responding. In most cases, the conversion occurred because the customer was prompted to fill out a form to get the price. If you fail to give the price, customers can perceive your dealership as unhelpful and move on to your competition.

3.    Be agreeable – We all know that some customers tend to have unrealistic expectations when requesting pricing or payment information. It’s not uncommon to find ISMs engaging the customers with reasons NOT to buy. For example, a lead comes in with a customer wanting an unrealistic payment or price. Rather than inviting the customer in to work numbers, the ISM will explain that the requested price or payment isn’t possible. Always remember that sales are a numbers game. With the proper deal structure, a payment can be as low as any customer wants it.

4.    Be consultative – Many times the vehicle that the customer requested pricing for isn’t the one they end up purchasing. Always remember that customers are looking for information and assistance. Failing to provide information puts the salesperson in an adversarial position to the customer. It’s much easier to build rapport and get the customer into the dealership if the customer feels that you are sincerely trying to assist them in finding the right vehicle.

5.    Sell the appointment – When dealing with Internet leads, ISMs will all too often try to sell the car via email or the phone. The key to increasing show rates is to remember that the goal is to get the appointment, NOT to sell the car. Using sales skills and techniques focused on selling the appointment rather than working a deal can help increase appointments set and your show rate.

6.    Go above and beyond – When a customer requests information, always give them more than they asked for. If you are offering vehicle pricing, try including an example payment. If the customer requested information about a new vehicle, include several trim levels in your response. If they are interested in a used vehicle, you may try including some alternate vehicles in your response as well. By providing more information than requested, the customer will understand that you are truly trying to assist them and therefore more likely to choose to do business with you.

7.    Make them feel special/personalize – There’s a reason why many dealers are adopting video in their email responses. If a customer wants information about the condition of a used vehicle, it’s very simple to record a personal walkaround for the customer while mentioning their name. Personalized video responses are valuable for building rapport and help put a face with a name. It’s also much easier than taking 10 pictures of a vehicle and trying to email them to the customer.

8.    Consistent follow up – It’s very easy to understand why ISMs get frustrated trying to contact customers who submitted leads, but are then unresponsive. After days or weeks of emails and phone calls, many salespeople tend to give up on the customer and move on. Keep in mind that chances are the customer is being contacted by other dealers as well. And, those dealers have ISMs who are getting just as frustrated. By not giving up on the customer and continuing to follow up, you could well be the only dealership left doing so. This exponentially increases the chance that the customer responds and ultimately ends up in your showroom.

Regardless of whether your Internet department consists of commission based ISMs, or if it has a full-blown BDC, the right processes, personalized responses and attention paid to detail, rather than simply shooting off boring sterile templates, will show your customers that you are there to help. Consider adopting these techniques into your Internet lead process. I hope that you are able to contact more customers, make more appointments and see more of them show, resulting in more sales.