Dealer Magazine | By: Mike Gorun | March 2013, Vol. 20, No. 3
The herd is homogenous and impersonal. An exclusive member is an individual who feels they are receiving some form of special treatment. Recently, I received three different $50.00 gift certificates from Nordstrom, Frontgate and Pottery Barn.
While the certificates were designed to drive incremental sales for these retailers, they were accompanied by personal letters that made me feel my past purchases were being recognized; that I was receiving ‘VIP” treatment. I am confident not all customers received these certificates.
For most dealerships, the herd simply drives and services vehicles. Dealerships that employ membership programs that recognize their most profitable customers on a more personal level know details such as “this customer drives a red 2011 Ford Fusion with 13,342 miles and is due for an oil service next month”. They know the last time this customer was in for service; and they know what services the customer is pre-disposed to purchasing.
E-mail marketing results depend on whether you’re blasting to the herd or targeting exclusive members who’ve already invited you to do so and enjoy that occasional recognition. Is your service marketing chasing the herd or are your exclusive members looking forward to it because its value is focused clearly on them and their vehicle service and maintenance needs?
This kind of special treatment is increasingly in need in a market where customers are becoming “fatigued” by the constant barrage of bland, non-personal service marketing that has become the norm.
Most retail customers participate in their “favorite” loyalty programs. It’s a proven marketing and retention tool for retailers – a tool that adds continuous profits to the bottom line.
Why are customers responding positively to these personal types of loyalty based communications? Loyalty member communication is often perceived to be of higher value because it’s personally tailored to the customer that has opted-in to receive it.
Most customers no longer perceive much value in general service and sales marketing communications. Numerous, non-segmented e-mail campaigns compound this perception. Make it a priority to create a loyalty initiative that stands out from the rest. Ensure your customers will perceive it as valuable.
One effective way to convey this value is through opt-in e-mail marketing as customers “invite” the dealership to send it to them. Don’t spam your members. These are your best customers who have entrusted you with their e-mail addresses. Be sure to only send selective, segmented, relevant e-mails. It may be more work to segment your members or customers into groups with specific preferences, but it will pay off.
Superior response rates
Because opt-in loyalty program customers have provided their accurate e-address, and will continue to do so should it change, their contact information and the dealership database is up-to-date and more productive.
Bounce rates for this type of e-mail are extremely low – as little as 7/10th of 1%. Opt-in e-mails are not being blocked by e-mail filters, dumped into spam or intercepted by overzealous service providers.
This type of opt-in marketing, used by both domestic and import dealerships, generates open rates of 24.58%, on average. Customers open and read them! The industry average for automotive related e-mails can be as low as 4% and seldom exceeds 12%.
At Berge Ford, Mesa, AZ, a repeating, precisely targeted oil-service mailer is bringing approximately 40 customers per month, many who also get additional customer-pay parts and labor work performed.
Because these e-mail messages are generated automatically based on pre-set parameters in the loyalty program, neither the dealer nor staff spend much time preparing and managing these important loyalty campaigns.
A loyal customer’s value
Statistical service and sales transaction data verifies that dealership customers who are enrolled in specially designed rewards-based loyalty programs improve dealership service and sales performance.
In a multi-year industry study, customers who have become active members in an automotive loyalty program visit their dealership every 4.26 months compared to every 6.82 months for those customers who are not participating in the program.
- This represents an increase in visit frequency of 60% annually.
- Members’ annual spend mirrors the increase in visitation, with a 97% increase in overall retail spend.
- Dealerships using loyalty programs have an average retention rate of 56.98% for active members.
Customer engagement review
Customers receiving opt-in e-mail tend to engage with the dealership long-term, spending their dollars with your dealership versus another dealership or the aftermarket. This loyal customer engagement marketing works so well because:
- It targets customers already loyal to the dealership but encourages their more frequent engagement, increasing opportunity for the dealership to provide value and retain customers’ business.
- It is permission-based: recipients have accepted your invitation to engage them on a recurring basis, so open rates are high.
- It’s specific and targeted to individuals and their specific vehicle needs so there is a greater value for both the customer and dealership
- Higher-than-average e-mail open rates leads to more customers taking advantage of the offer. This return rate means more vehicles on your service lifts being inspected and more opportunities to up-sell in the service department.
Remember those $50 gift certificates? I used all of them while spending an additional $600! A little bit of recognition and incentive can go a long way to driving sales you may not even know are out there waiting just for your store.
What type of e-mails are you sending customers to build loyalty?
Are you currently using a loyalty program? Why or why not?