Sell Around the Orange Barrels

It can bring showroom traffic to a standstill when road crews set up orange traffic barrels and dig up the street in front of a dealership. Bulldozers, barricades and backed-up traffic hurt auto sales when would-be customers take the path of least resistance and head elsewhere.

Maureen McDonald

May 1, 2007

7 Min Read
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It can bring showroom traffic to a standstill when road crews set up orange traffic barrels and dig up the street in front of a dealership.

Bulldozers, barricades and backed-up traffic hurt auto sales when would-be customers take the path of least resistance and head elsewhere.

“At some point, many dealership managers and sales people become buried in resignation and despair. They endure the problem instead of getting out ahead of it,” says Doron York, president of the Business Edge Group, a Detroit-based sales consulting firm.

But some dealers have taken action to blunt the effects of having customer access hindered by a roadwork that seemingly lasts forever.

Despite being besieged by a 3-year road-construction project, Sands Chevrolet in Glendale, AZ, managed to average $140 million a year in sales and rank No.16 in the country for Chevrolet.

It required an all-out plan to maintain annual sales volume of 4,000-5,000 new and used units while U.S. 60 and overpasses on the west side of Phoenix underwent major reconstruction.

“This dealership has operated 75 years in the same location. We couldn't afford to have our customers go somewhere else and forget about us,” says Jerry Moore, Sands' vice president.

With help from sales and service managers, he implemented the following 7-step plan:

  1. Set up a satellite location. Moore purchased an empty dealership on nearby Glendale Avenue for around $2 million when none of the vacant stores would lease property. He obtained temporary permission from Chevrolet to operate both stores simultaneously and trumpeted news of an alternate choice in newspaper, TV and radio ads.

    “Sure it was expensive, but we wound up having some of the best years in recent history,” he says. “If we had lost market share, it would affect our placement in the Chevy community zone-wide and nationwide.” He gained permission for a six-month overlap of the two stores until customers migrated back to the original point.

  2. Hold off-site tent sales. If numerous customers expressed concern over taking a test drive around traffic snarls, Sands Chevrolet would accommodate them. The dealership staged tent sales on rented parking lot spaces at the edge of a local shopping mall. To drum up traffic Moore sent flyers to every home within a five-mile radius of the mall and dealership.

  3. Mine the database. With access to 60,000 names in the store's data base, opportunities abounded. Sales personnel promised deals to new-car customers and equal payments for customers choosing to upgrade to a new model. Three fulltime service clerks called customers to schedule warranty procedures, offering a free tank of gas and a car wash for spending more than $150 on service. The goal was scheduling 50 service appointments a day.

  4. Create access. Construction detours made it periodically impossible for customers to arrive via the existing entrance, so the dealership created another entrance on a side street, assuring access at all times. Ads on three billboards showed customers how to dodge barrels for deals. Moore invited two radio stations a month to broadcast live from the satellite dealership, including a contemporary Hispanic, rock and country music. Customers stopping in had a chance to win a free used vehicle.

  5. Track advertising. Moore says don't assume one source of marketing is better than another. Create a separate e-mail account and a toll-free phone number for consumer reaction to ads. Moore found mining the dealership's existing data base and blanketing the neighborhood with ads as the most effective sources of information.

    “In a way, a situation such as a construction zone forces dealerships to evaluate their advertising,” says Steve Emery, a consultant to the National Automobile Dealers Assn. “With a slowdown in business, dealers must apply dollars effectively by evaluating what advertising actually generates sales,”

  6. Create a buzz. An “amber-alert” campaign proved one of the most popular in a series of community-based events at the satellite dealership to draw attention. Civic volunteers and police officers helped fingerprint and photograph children while experts led talks on child safety. Sands also held a seat-belt awareness day and charity fundraisers.

    “Activity creates activity,” Moore says of investment dollars well spent.

  7. Show your best. As backed-up traffic inched forward on available lanes, motorists saw plenty of hot cars on display, carefully selected by the sales team by most popular colors and styles. Prices were displayed in bold letters.

Consultant Steve Waterhouse, president of the Waterhouse Group in Atlanta, applauds Sands Chevrolet for creativity in the face of adversity. “Even in the worst of times, people are making a lot of sales,” he says. “It takes more thinking, not just price slashing.”

Waterhouse, an advisor to dealerships, corporations and large retailers, suggests dealers make a game out of dodging the orange barrels.

“Have a game on your website,” he says. “Have customers click on the moving barrel. Offer service discounts to winners.”

Waterhouse says some dealerships set up lunch counters, offering free pizza and specialty coffees, during construction season.

“Emphasize value,” he says. “Call your really special customers and invite them in on a Friday night after closing for appetizers, drinks and a chance to see the newest models.”

Think beyond the familiar approaches, says sales consultant York. “Offer to pick people up at home and drive them to the dealership or take a car direct to them.”

Emery suggests setting up a flashing road sign to entertain slow-moving traffic with amusing slogans, celebrity birthdays and special prices. He also says dealers might place orange barrels atop display vehicles to add merriment to the situation.

Endurance alone wasn't an option for Moore, who suggests other dealers get ahead of the barricades with creative ideas.

“I fought the battle. It was brutal,” he says. “We advertised ‘construction reduction sales’ and other incentives, but mostly we prayed for clear weather so the construction would finish as soon as possible.”

Construction Zone Coping Tips from Dealers Who Know

Five car dealerships in metro Detroit faced slow sales and even slower traffic when Michigan Department of Transportation closed a major overpass at Eight Mile Rd. and Woodward Ave. for several months.

Here are some coping suggestions from three of the affected stores:

Ferndale Honda: John Mertz, general sales manager, says construction was actually a plus for his team because regular traffic often sped by and barely saw the dealership. With the overpass closed and motorists diverted to service lanes, more would-be customers saw cars on display, offering special lease prices and hot models. ”We offered sales people cash incentives to move different vehicles,” says Mertz. “We paid a straight bonus per unit. When a salesperson closed a deal he got $50 on the spot, in his hand. If he closed three in a day that was $150 for the wife-doesn't-need-to-know fund.”

European Auto Sales: Rene Nunner, general sales manager for Ferndale Mazda and European Auto Sales, put up a big banner offering “orange-barrel savings.” Customers negotiating through the traffic received a $500 discount on the purchase of any new vehicle, helping offset a 20% drop in business.

For high-end used cars, such as the Mercedes-Benz S500, Nunner worked harder to sell other dealerships and car fanciers via the Internet. “At least 40% of our sales are on the Internet. We sometimes drive the car to the customer.”

Ed Schmid Ford: “We've been around 44 years and a lot of old-time customers keep coming back, despite construction,” says Ed Schmid Jr. He had little latitude to make deals because so many Detroit-area customers have family with Ford employee discounts in the auto maker's home region.

The Schmid staff staged live remotes in front of the service garage and offered free hot dogs and balloons to customers. The dealership began opening Saturdays from 9 a.m. until 3 p.m. to accommodate more business. Fortunately, Schmid notes, the construction delays lasted months, not years.

“The highway department did everything possible to keep traffic flowing,” he says. “That helped.”

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