As younger, more tech savvy consumers are shopping “harder” – doing more research online prior to making service decisions – automotive service providers must take advantage of database mining and social media, particularly dealers who need to shed their “senior center” image, according to research from DMEautomotive, Daytona Beach, Fla.
According to DMEautomotive, service providers’ best opportunity for growth lies with “swing loyalists,” who service providers can convert into loyalists by realigning some strategies.
Over a third of dealer and aftermarket loyalists expect service providers to offer a loyalty program (34 percent of dealer loyalists and 32 percent of aftermarket loyalists), according to a DMEautomotive survey of more than 4,000 vehicle owners. Over a quarter of swing loyalists and disloyalists would also participate if given the option.
“A robust rewards program is key to protecting your loyalist base (who account for the majority of a service provider’s revenue) and can also increase share of wallet with those best customers,” the research says.
Over 70 percent of dealer and aftermarket loyalists prefer communication at least once every three months via e-mail and traditional mail.
To stay ahead of the competition, DMEautomotive recommends that service providers treat each loyalty segment separately and move beyond traditional mass media and direct marketing tactics.
Low loyalty rates industry-wide require service providers do more to protect their loyalists, which account for the majority of their revenue. Even though loyalists spend most of their dollars and visit most often at a particular provider, they still go elsewhere on occasion and are always at risk of leaving.
What loyal customers value most in their service experience is important to each service provider type. They tend to choose dealers because they are the brand experts with manufacturer trained technicians. They use brand name parts and fluids and offer premium amenities such as shuttle service, loaner vehicles and expert service advisors, according to DMEautomotive. Independent loyalists choose independent repair facilities because they value the relationship with the store and have confidence in the store’s ability to deliver honest and reliable service. They can perform any service needed, provide an estimate before services are performed and always fix the car correctly the first time. Aftermarket loyalists choose the aftermarket because of price, promotional events, convenience and an abundance of parts and service.
“To retain your loyalists, you need to reinforce the reasons they choose you at every touch point. The mistake many service providers make is not placing enough emphasis on store attributes that are important to loyalists,” the research says. “You also need to provide reasons for your loyalists to believe you and avoid empty promises that your service center can’t deliver. Service providers also need to develop and employ marketing strategies and programs tailored to the desires and needs of swing loyalists and disloyalists, who offer the highest level of opportunity along with the highest risk.”
Each service provider must focus on a combination of factors to get more revenue from their swing loyalists, or to move them into the loyalist column, DMEautomotive says.
One factor that does stand out for dealer swing loyalists is that they are more likely to visit a dealer because services are covered under warranty. For the independent swing loyalist, a combination of location and service speed tip the scales in the independent’s favor. Fast service and competitive prices, will entice aftermarket swing loyalists to visit a store. The store selection process also revolves around age with approximately half of aftermarket service provider loyalists being under 34, while around half of dealer loyalists are over 50.
This is an important factor in devising communications strategy, DMEautomotive says. If automotive service providers become complacent and do not take steps to mitigate this loss of their aging loyalists as they begin to exit the marketplace, it could represent a loss of $310 million if they are not replaced.
“The automotive service consumer is shopping “harder” as they continue to struggle in the midst of a slow economic recovery. This means service shoppers are doing more research prior to making service decisions,” the research says, adding that digital media is becoming more of a source for this information . “Forward thinking service providers should take advantage of advances in technologies such as database mining and social media platform development as they develop more effective marketing programs. Dealerships and independents would be right to consider moving beyond simple oil change and routine maintenance reminders.”