What is smarter frequency in automotive service marketing?

January 17th, 2013 | Written By: admin

I have two quick questions for you, three really, and then I want to share an “ah ha moment” I had recently.  “Ah ha moments” are exciting to me because they give me mental clarification that provides important direction for the vision I have for our programs and our customers.

The first question is, “How many loyal customers do you have?”  When we consult with dealers about how they should market, many dealers hesitate to spend money on customers that “are already going to come in anyway.”  But my question is, “do you really know how many of “your” customers are completely loyal to you and who they are?”

The second question is, “How many of your customers service their vehicles exactly when the vehicle is due for service?”

This is all leading to an insight that I had about the necessity of frequent communications that is very different than what you might be looking at when you put your marketing plan together.  I don’t want to just offer you my opinion… let me back it up.

The results below are from an actual dealer that was on a limited contact strategy for mail and email, and then came back to Traffic Builders’ Drive™ program after his sales started to drop.  Some service managers and general managers focus strictly on the dollars spent on marketing and lose sight of the return on investment.  In trying to limit their marketing budget they focus on just reminding their current customers to come in for service.  The strategy is to try to send the right message, to the right customer, at the right time. Essentially this is saying that you only mail or email your customers when they are due for their service and sending something to them at any other time is a waste of time and money.  This brings me back to the questions above.  “How loyal are your customers, and how often do your customers service on time?

On our Drive™ program we market to your customers that ARE due for service (reminders) and those that aren’t due for service (mailers).  And here’s why our frequency strategy pays off.

The report below is for a mailer we did targeting all customers that were between maintenance cycles.  It is important to note: on our Drive™ program we target both customers that are due for service, and customers that are NOT due for service.  To be clear, we avoid duplication by suppressing the reminder names from mailer names, but we are aggressively marketing to customers that are supposedly “not due for service.”  This means that if a customer was due for service, their name would have been suppressed from this mailing list and not included in the attached report.  So, how affective was this mailer that was targeted to a segment that is technically NOT due for service?

From this campaign over a one-month period:

  • Total customer-pay revenue: $256,534
  • RO’s generated: 1,468
  • Average RO amount: $168
  • Return on investment for every $1.00 spent in advertising: $51

So my third question to you, “Does it really make sense to ONLY market when the customer is in need of service?

Retention is a hot topic for dealerships – can someone tell me how reaching out to your customers less often leads to more retention?  That is NOT what the numbers say. Your customers don’t always service when an algorithm says they should and they may choose to go elsewhere when they do service if they haven’t heard from you in a while.

The bottom line is that marketing less does NOT produce more.  And if your neighboring dealer is on a Drive™ program, they are in front of your customers 12-15 times/year.  Guess who wins…

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