Most dealers have been using an owner retention program (ORP) for years. Sometimes referred to as a service connection program or trigger-based communications, the goal is to stay in touch with sold customers, bring them back for service and continue servicing them until they’re ready to buy again.
These messages are a great way to communicate with customers in a timely and relevant manner without having to life a finger, which is why these programs are well known and widely used.
However, many ORPs still use a dated, generic approach to marketing. If you’re sending the same ol’ messages using the same ol’ channels—typically coupons and service specials sent via email and direct mail—it’s time to modernize the way you communicate to your customers.
Ways to modernize your ORP include:
1. Use “Big Data” to add relevance
Many dealers ORP underperform due to “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 actually needs. The only way to accurately predict a customer’s need is to be able to leverage customer data and predictive analytics.
Customer and vehicle data is used to create personalized, relevant offers. If a customer recently had an oil change they don’t need a coupon for an oil change one month later. If a customer is approaching their 30,000-mile maintenance, they should receive an offer designed just for them.
Predictive analytics predicts the best offer for a customer based on that individual’s previous actions and behavior. If a customer clicked or didn’t click on your previous offer, or if a coupon was redeemed or ignored—all this data should be used to craft the next offer that’s relevant for that customer.
2. Add channels to 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 reach x frequency of your communications. In marketing, it’s well known that the greater your reach x frequency, the greater the response rates and ROI are.
The fact is most emails today are deleted, but 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. And believe it or not, direct mail campaigns are still highly effective for certain types of communications, and tend to reach a higher percentage of your customers than email campaigns alone.
To increase the effectiveness of your ORP, add an omnichannel strategy that leverages customer data and predictive analytics to deliver the right message to the right customer via the right channel at the right time.
3. Measure ROI of the program, not campaigns
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. Customer loyalty can’t be measured by the number of coupons redeemed.
The purpose of an ORP is to build long-term relationships with your customers. Therefore, your ORP should be used to deliver frequent communications so that you stay top of mind between service visits.
To keep customers engaged, you have to 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 much ROI, but they go a long way to increasing loyalty and retention metrics.
Since the purpose of an ORP is to increase customer retention, it makes sense to measure ORP effectiveness by measuring and tracking customer retention. There are several ways to do this; or you can use your own method.
- Assign a loyalty score to each customer in your database, and track the cumulative average of that score over time.
- Assign a status to every customer, such as active, inactive or lost, based on how long it’s been since the customer has visited your dealership. The more active customers you have, the more effective your ORP is.
- Measure and track revenue per units-in-operation ($/UIO).
4. Be flexible with budgeting
Many dealers set ORP marketing budgets based on a random amount they think is appropriate; such as $1,000 for this email campaign and $2,000 for that direct mail campaign.
But when you put a monetary cap on each campaign, you’re essentially telling some customers they’re less important than others and that it’s not worth communicating to them. Rather than limit the spend, limit the number of communications you send out.
For every campaign, review your strategy and select the best communications and channels to achieve your dealership’s goals. For example, if retention is down, prioritize service reminders and inactive customers instead of a ‘New Car Thank You’ piece or other type of interim communication. If you’re having problems with the customer experience or negative reviews, emphasize CSI and ‘Thank You for Service’ pieces.
If you are on a budget, consider what you are hoping to accomplish with your overall marketing strategy. Piecemeal, inconsistent campaigns do not work and send a fractured message to customers. Choose the best pieces that will make your strategy work for you.
And remember, when it comes to retention, you have already achieved one of the most difficult marketing challenges: converting a contact into a customer! Doesn’t it make sense that you would allocate a large share of your budget to strengthening those relationships so they will visit again and again?
5. Consolidate providers
Many dealers use several vendors to execute their ORP marketing campaigns; e.g. one vendor for email, another for mail and another for digital communications.
This strategy results in a fragmented and inconsistent customer experience. Customers respond well to a logical and progressive sequence of messages that are relevant to where they are in their ownership lifecycle. The best way to ensure this happens is to allow a single vendor to coordinate and deliver all of your dealership’s ORP campaigns.
When signing with a new vendor, commit to six months to a year to gauge results. If you haven’t seen any improvement in your customer retention metrics after one year, it’s time to try another vendor.
Today’s ORPs are not the same product that your dealership subscribed to years ago. If your goal is to increase customer loyalty and retention, modernizing your ORP and the way you communicate with your customers is key.
Marketing | April 15, 2021