By Courtney Evans, VP Product Marketing, Affinitiv
Most auto dealerships do some or all of their service marketing through manufacturer owner retention programs (ORPs). The purpose of ORPs is stated in the name — to retain customers. But how well do these programs deliver on that promise?
The results from ORPs are all over the board. Some dealerships effectively use their ORPs to increase customer retention, while other dealers experience lackluster results.
The main reason why many ORPs underperform is due to a “one-size-fits-all” marketing strategy. It’s not uncommon for dealers to create offers based on what they think the customer wants, instead of what the customer needs.
To turbocharge your ORP marketing results, you may need to modernize your service marketing strategy so you can send relevant, personalized campaigns to customers based on where they are in the ownership lifecycle. Here are a few strategies to help you get started.
Use Data to Increase Relevancy
The only way to accurately predict a customer’s needs is to leverage customer data and predictive analytics. If a customer recently had an oil change, they don’t need a coupon for an oil change one month later. When a customer is approaching their 30,000-mile maintenance, they should receive an offer, not only for that specific service but an additional offer based on other services they’ll likely need, based on their vehicle make, model, and mileage.
Predictive analytics automatically generates the best offer for a customer based on that person’s previous actions and behavior. When a customer clicks or doesn’t click on your offer, if a coupon is redeemed or ignored — all this data can craft the next offer that’s more relevant for that customer.
Increase Reach x Frequency
Many dealerships spend a disproportionate amount of their ORP budget on email and direct mail, but not all customers respond to these channels. This approach limits the reach x frequency of your communications. In marketing, it’s well known that the greater your reach x frequency, the greater your response rates and ROI are.
While email campaigns can be effective, millions of people spend hours a day on social media and/or YouTube. Being able to drop service reminders into a Facebook or Instagram feed, or include a video pre-roll on YouTube will increase the percentage of your customers that see your message.
BDC campaigns are also highly effective and worth the investment for higher ticket repairs. Even direct mail campaigns are still effective for certain types of communications and often reach a higher percentage of your customers than email campaigns alone.
To increase the effectiveness of your ORP, expand media channels, and use an omnichannel strategy to deliver the right message to the right customer via the right channel at the right time.
Measure ROI with the Right Metrics
Many dealers continue to measure the ROI of individual service campaigns based on dollars spent vs. dollars generated. This approach fails to consider how the overall ORP is working towards its stated goals. You cannot measure customer loyalty by the number of coupons redeemed.
The purpose of an ORP is to build long-term relationships with your customers. Therefore, your ORP should deliver frequent communications so that you stay top of mind between service visits.
To keep customers engaged, you must focus on what’s in it for the customer, instead of what’s in it for your dealership. Educational information and “thank you for servicing with us” messages are great for building customer relationships and trust. These campaigns may not generate immediate ROI, but they go a long way in increasing loyalty and retention metrics.
Since the purpose of an ORP is to increase customer retention, it makes sense to monitor ORP effectiveness by measuring and tracking customer retention. There are several ways to do this. One way to measure customer retention is to assign a loyalty score to each customer in your database and then track the cumulative average of that score over time. Another way is to assign a status to a customer, such as inactive, active, or lost, based on how long it’s been since the customer visited your dealership. The more active customers you have, the more effective your ORP strategy is.
These strategies will help you to deliver a better customer experience and stay top of mind when service is needed.
ARTICLE BY Courtney Evans
Courtney Evans is the VP of Product Marketing for Affinitiv, where she oversees product suite performance, product development and new product launches. In her time with Affinitiv, she has served in several roles including Director of the Client Care team and member of the Dealer Product Service team. Courtney’s expertise includes process efficiencies, platform development, contract development, client relations and major OEM programs. She has more than 10 years of automotive and leadership experience.