In most cases a loyalty program can be beneficial even for a one-outlet dealership — depending on local competition, he said.
“Location is a huge factor to deciding on the automotive care. The idea of building equity with the brand, we feel Meineke was really the first national chain to market with a loyalty program like that.”
Mr. Rose said that “with the customers they had enrolled and built equity with, the other national competitors are going to have a harder time gathering that share of wallet or retaining that customer, compared to Meineke, because (Meineke) already started and blazed the trail, if you will.
“The same happens on the small, more local level in that if they're competing with two or three guys on the road and you're getting the customer in the door through acquisition methods and having the ability to actively bring them in the loyalty program, build that equity and continue to communicate with them, it's going to work the same on that smaller level as it is on the national level.”
Getting the right data
He said a frequent challenge for auto service shops is obtaining the right data and building the database the right way. The common goal for the dealerships, that usually see a customer only two or three times a year for maintenance, is to communicate with that customer after and in-between visits.
“So for the most part we see out there these automotive service chains don't have the ability to do so, other than the batch-and-blast mentality that they're kind of used to. So having something running in the background that's continually communicating with customers — even put the discounts and coupons aside — keeping the brand top of mind is, again, one of the bigger challenges that we're solving today,” Mr. Rose said.
A multi-channel platform of data collection, reminders and marketing can be handled by an outside digital marketing service. Mr. Rose said Clutch's program is mostly automated and all data that the service desk collects is transmitted to Clutch — “meaning if I come in and bring my car in for service and I check out, that transaction runs through the POS and a copy of that transaction makes its way to Clutch.”
He added that “in most cases there's not anything different that the person behind the counter needs to do to be able to operate the program.”
However, in the case of promoting the business' loyalty program, a service writer may need some scripting on how to encourage customers to sign up for the program.
He noted that small businesses may not be computer savvy and may expect such data collection and marketing programs to be cumbersome and added work, “so that's the focus of the platform is ease of use for the users,” Mr. Rose said.
Every business is a little different, he noted, but they usually have one of two goals — increase their car count to fill their service bays or, having sufficient traffic, increase a customer's spend on additional products and services.
“For the former, it might just be coupons for a cheap oil change to get a customer in the door to get a car in the service bay. In the latter, the service bays are full, so how do we get those oil change customers to purchase tires or brake service or other preventative maintenance and be their go-to garage?
“These are the two categories that we see them falling into,” Mr. Rose said.
Clutch, for example, sets out to understand the business and goals before creating a scalable program, he explained.
“Before the platform is rolled out, we're looking at historical data with the brand, we're looking at their strategies, what they've done previously that worked and not worked.
“So usually at the end of that process, again before the platform is rolled out, we have a pretty good understanding of the percentage of customers that we're going to drive more business out of and line that up with an economic model to say, ‘The program is going to be economically feasible that the costs aren't going to outweigh, obviously, the expected rate of return.'”
To reach this reporter: [email protected]; 330-865-6127; Twitter: @kmccarr