Courtney Evans

Company: Affinitiv

Courtney Evans Blog
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Courtney Evans

Affinitiv

Apr 4, 2019

Customer Loyalty: Playing the Long Game

How long does it take to build customer loyalty? It might start with a great sales experience, but if a customer feels like they've been taken advantage of in the sales process, it will be hard convincing them to come back for service. True customer loyalty is built over a period of several years in the service drive.

But providing a great customer experience in the service lane is not enough, on its own, to build loyalty. Just because I receive good service somewhere doesn't make me a loyal customer. In order to become loyal, I've got to like and be able to identify with the brand. I also want to feel like my business is appreciated and receive special offers designed just for me—that I can actually use.

That's why your marketing program is such an important part of building customer loyalty. Marketing provides you with the opportunity to tell the story of your brand. Who are the people behind the dealership name? How are they helping out in your community? How do you demonstrate customer appreciation? Are the offers that you send out to customers relevant and personalized, or are they just randomly selected and blasted out in email campaigns with the hope that you'll get a two percent response rate?

Just because a customer redeems a coupon and comes in for a service does not make them loyal. If the only reason they come in is because they got a great deal for a service, guess what? At some point, an independent repair facility will offer them an even better deal, and that customer will defect. The reality is, they were never loyal in the first place.

Building loyalty requires playing the long game with a strategic customer retention process. This process requires seamless integration of your brand story, customer experience in your service lane and marketing messages.

Consider the following facts:

In 2018, 82% of registered vehicles were serviced at a 3rd-party service center
85% of those visits included maintenance
36% of those visits included repair
7% of those visits included enhancement

Dealerships cannot afford to lose this many customers. Yet, most dealers do not make the necessary investments in service marketing to win their customers' loyalty. The path to loyalty is a long one, and your marketing goals need to align with the customer experience at every step.

Step 1: Customer Enters Purchase Cycle

This phase includes customer awareness, need, research, product selection and the actual purchase. Your marketing goals during this period are to build brand awareness, win customers over, encourage customer action and ensure that your dealership is in consideration.

Step 2: Customer Ownership Experience

This phase is when the customer is driving the car in their daily routine and they start coming in for standard maintenance. Your primary marketing goal in this phase is to establish yourself as a trusted and knowledgeable resource for their vehicle needs. At this stage it's also critical to deliver on the promise of an excellent customer experience in the service lane. This is best achieved with technology designed to boost productivity and better manage your dealership.

Step 3: Service Needs Increase

As the vehicle ages and/or goes out of warranty, service needs and spending rises. This is a critical customer defection point, but also the greatest opportunity for retention.

Let's analyze who actually brings their vehicles in to get serviced at dealerships:

  • 75% of 0-2 year old vehicles

64% of 2-5 year old vehicles
43% of 5-10 year old vehicles

You can see by these statistics that customer defection greatly increases once the warranty expires, and once the vehicle is in the hands of a second owner. Does your current marketing strategy address warranty-end customers and second owners?

Prior to warranty expiration, your customers should receive messages of appreciation, along with your very best offers for anticipated repairs on their vehicle. This is a critical defection point so you want to do everything you can to keep them coming in.

To find 4- to 6- year old vehicles in the hands of second owners, search registration records in your primary market area (PMA) and use tactics like screen scraping to locate and target potential new customers. Also add service conquest campaigns to replace the inevitable defections that do occur.

By now, you should be established in the customers' mind as a trusted resource and the first place your customers think of when it's time for service. At this stage, equity mining campaigns are also helpful to identify which customers might be good candidates for new vehicle offers.

While it's important to provide customers with a great experience in the service drive, those efforts must be integrated with a marketing strategy that aligns with that experience. Winning customer loyalty requires a strategic approach that targets customers with relevant and personalized offers, as well as marketing messages that tell your brand story and establish your expertise. This takes time, so be sure your marketing strategy is designed to play the long game.

Courtney Evans

Affinitiv

Vice President of Product Marketing

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Courtney Evans

Affinitiv

Jan 1, 2019

How to Grow Loyalty with Service Marketing

For car dealers, the opportunity to create loyal customers might start with a sale, but true loyalty is created in the service department. According to a 2017 IHS Markit study, the average length of car ownership is nearly seven years. That's a long time to maintain a relationship with someone until the next sales cycle.

So, the focus must be to keep the customer coming back for service. How is this best accomplished? Let's look the four types of loyalty and what drives customers to choose your dealership versus another dealership or an independent repair facility (IRF).

1) Relationship. This is where your customers get to know and like a service advisor and other service employees.

2) Needs are met. This is when the customer feels that every time they bring their vehicle in, the problems are identified and solved. They don't have to worry about something going wrong after the fact.

3) Convenience. Some customers are loyal to dealerships based on location or hours.

4) Value Proposition. You might believe that cost is a major factor in loyalty, but this is actually not the case. I personally drive past five or six IRFs every time I drive to my dealership to get my car serviced. I know I could get an oil change for cheaper somewhere else, but I like the fact that my dealership uses OEM parts and I can wait in a comfortable waiting room.

Some, if not all of these factors contribute to customer loyalty, but the common denominator in all these types of loyalty is trust. Trust is a sacred bond in any relationship, and once broken is not easily rebuilt.

What's the best way to build trust with your customers?

There are three steps involved: engagement, relevant messaging and omnichannel marketing.

Engagement starts in the dealership, but only 30 percent of customer interactions with your dealership actually happen in the dealership. Once the customer leaves, how do you continue that engagement? You must be able to engage your customers with relevant, consistent messaging in places where customers spend their time.

When it comes to service marketing, relevancy is critical. If you tell a customer in the service lane that they need new brakes, but then send the a coupon for an oil change, that doesn't make sense.

The frequency of your message is also important. In marketing we have something called the Rule of 7, which states that a customer needs to "hear" your message at least seven times before they take action to buy a product or service.

That's why omnichannel marketing is the most cost-effective means to deliver your message. Omnichannel marketing combines the power of customer data, vehicle service history, online behavior and predictive analytics to deliver the right message to the right customer at the right time.

These days, it's especially important to include social media in your service marketing strategy. The average person spends 135 minutes a day on social media platforms and even more time on the Internet. Are you service messages being delivered to customers via social media? If not, you're missing out. Take a look at these response rates using different marketing channels.

  • Direct mail campaign alone - 6%
  • Direct mail + social display - 20%
  • Direct mail + email - 27%
  • Direct mail + email + social display = 37%


The more channels you add, the higher lift you will see in ROs and the more service revenue you will generate. For example, adding social channels alone to service marketing adds an average 3.9% lift in ROs and nearly $300,000 in RO revenue per year.

To achieve these results, start with your manufacturer's owner retention program (ORP). Make sure you maximize everything your OEM is offering.

Then, look for a digital marketing provider that can add social display, display advertising, additional email campaigns and PPC for service. Make sure the provider can align their messaging with your ORP messaging.

Additionally, leverage the power of triggered communications. Based on mileage or vehicle service history, these automatic reminders are sent to customers when it's time to bring their vehicle in for service. Because they're so personalized, triggered communications are most cost-effective when delivered through email and social media.

Finally, consider a customer rewards program. Programs that allow customers to accumulate points that can be redeemed towards additional service or aftermarket products are ideal, because they encourage multiple visits to your dealership.

Building trust with your customers requires continuous engagement, consistent messaging and an omnichannel marketing approach. Generic service offers that are sent via email and direct mail aren't compelling enough to keep customers returning to your dealership for the next seven years, until they're ready to buy again. Does your service marketing program leverage these strategies to build loyal customers?

Courtney Evans

Affinitiv

Vice President of Product Marketing

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