Texas Mazda store learns what’s necessary with relationship-building, sponsorships, advertising.
BY MARY WELCH
With roughly 40,000 soldiers stationed at Fort Hood in Killeen, Texas, about an hour’s drive north of Austin, it must be like shooting fish in the proverbial barrel for a car dealership – right? Not so fast. As other dealerships near bases can attest, it’s often far from easy to penetrate the local military market. Sometimes it’s hostile territory, in fact. How is Mazda Killeen handling the struggles?
“A lot of military have been taken advantage of by the auto industry,” said John Burge, general manager of the Mazda Killeen dealership. “They’ve done a lot of [negative] things such as overselling or giving a higher interest rate. Many dealers see these young men and women with steady paychecks who haven’t made a major purchase before, and they take advantage of them. That’s why a lot of officers tell their people not to buy a car from a local dealer.”
Still, Burge’s dealership has made great headway with the Army base and has object lessons to offer other dealers around the country who covet military business. The dealership owned by Austin-based Roger Beasley Automotive has more than doubled its new car sales since 2011, the last full year under the former ownership, and 70 percent of its new and used units are bought by military.
Burge said it took new ownership six to seven months to counteract the former owners’ reputation at Fort Hood. “We had to make people understand that … we’d treat them like they’re our gold star customers — because they are. The military is our lifeline.”
Mazda Killeen – Reach Out To Build Credibility
So, what marketing and pricing tactics get more U.S. military personnel (of whom there are 2.9 million on active duty around the world, not counting 825,618 in the National Guard and Reserves, according to the Department of Defense) into your dealership and buying a car? Especially since every other local dealership has the same ambitions.
One of the first things Burge tried was to reach out to the Killeen chapter of the Association of the United States Army (AUSA), a private non-profit organization that supports Army causes. He asked how his dealership could effectively get involved with the Fort Hood community. “They’ve done a tremendous job of getting our name out … and letting everyone know that we’re here to serve.”
“Credibility is everything,” noted Ron Taylor, president of the AUSA Fourth Region (Texas, Oklahoma, Arkansas and Louisiana). “Once you’ve lost it, you won’t ever recover.”
Ex-Military Make Smart Hires
Mazda Killeen also got to know its customers by hiring former military. Burge estimated that 60 percent to 70 percent of his 21 employees are ex-military, and others are military spouses or grew up in military households.
“I was in the military, but it was 27 years ago. Things are a little different today. My general sales manager is a disabled vet who was wounded in Afghanistan. He truly relates with these soldiers, and them with him.”
His military-savvy employees know the Army terminology, ranks and titles. His sales manager shows up at each of Fort Hood’s important, and sometimes quite elaborate, deployment ceremonies.
Avoid Temptation To Oversell
The dealership, which posted 2014 vehicle sales revenue of $16.9 million, knows the danger that overselling poses to its long-term success.
“These young guys have bigger eyes than their wallets,” Taylor explained. A prudent dealership knows to “keep them in budget and, if necessary, take the time to make sure they understand their LES [leave and earnings statement]. Do not put a solider in a car he can’t afford. It will have lasting repercussions, not only with him but with the base overall.”
Burge’s salespeople know to review exactly how much of a hit the soldier’s car payment will inflict on his or her paycheck, so there are no surprises. He also follows military suggestions to encourage soldiers to show the contract to their immediate superior officer, or even invite the superior (usually a first sergeant) into the dealership. “We especially do that with anyone under an E4 [corporal], and in about 75 to 80 percent of the time the sergeant is involved.”
Don’t Ruffle This Guy’s Feathers
In the Army, a soldier having a problem with an off-base business is supposed to report it to the base’s consumer affairs officer. Get too many complaints, and the officer not only will talk with your business but might put it on the “off limits” list. “Nobody wants that, because you won’t be in business much longer,” Taylor said.
Thus, forging a good working relationship with the consumer affairs officer is vital, and Burge is working on that. But, “you just can’t walk in and say, ‘Hi.’ They are real suspicious.” Taylor is trying to help Burge as a liaison.
Sponsor, And Sponsor Some More
About 80 percent of Mazda Killeen’s marketing budget is spent on advertising or promotions targeting the military. Burge advertises occasionally on the two base newspapers, but word of mouth can be more impactful. He aims to be a business sponsor of “pretty much anything that the military is doing, and about 90 percent of anything that goes on in this town has to do with the military.”
He also looks for sponsorship opportunities involving military retirees, civilian employees and spouses. An example is a 5K race to raise money for breast cancer research at which Mazda Killeen gave out 250 bags with water bottles, T-shirts and other branded merchandise.
Recently Burge worked with AUSA on a program to donate a used Mazda every 90 days to a soldier. “We thought about giving it to a Gold Star family member but think it will be more beneficial for active Army. We want to pay it forward.”
They also helped form a nonprofit called No DUI of Killeen, and the dealership provides at least one car each weekend so that off-duty soldiers can pick up military personnel who have drank too much alcohol. On an average weekend, at least 100 soldiers are driven safely home in a Mazda, according to Sgt. Mike Nuttall, who heads the effort.
Plus, Mazda Killeen donates $50 from each sale to Wounded Warriors or other military-related charities.
And, while most manufacturers offer a military discount, Burge said Mazda’s is more inclusive and further helps his dealership’s reputation. That discount is $500 discount for all active military, members of the Reserves or National Guard, and military personnel who have retired within the last two years.
“Our store has been more profitable since we became [more] involved with the military,” Burge said. “We cater to them. We want to them understand that they are not only our No. 1 customers, but [also that] we will treat them that way.”