A more engaging way to 'clutch' sales

AMBLER, Pa. (April 27, 2016) — In today's competitive auto service market, it's not enough to just advertise in the local newspaper or direct mail the same coupon to hundreds of recipients.

The latest marketing strategy focuses on identifying a customer's buying habits and personalizing offers.

Digital marketing companies, such as Clutch Holdings L.L.C., are offering integrated platforms for automotive service businesses to collect customer data and create marketing geared to personal needs and service history.

“Our customer marketing platform has offered an end-to-end process in technology, especially in the automotive services industry, to capture data at the point of sale, to understand the customer, their vehicle, all the services that they may have purchased in the past or are due for in the future, and then drive the communication as a result — via email, direct mail, SMS, for example — to send customers personalized offers, reminders for service, etc.,” said Ryan Rose, director of business development for Clutch.

• This article appeared in the April 25 print edition of Tire Business.

“So we've been able to centralize it and give those dealers and service chains one platform to execute everything from end to end.”

Last year Clutch, a cross-channel customer engagement firm founded in 2012, helped the Meineke Car Care Center chain overhaul and manage its loyalty program and tailor messaging to its customers based on type of vehicle, purchasing habits and other profile points.

Clutch also has worked with small and regional automotive businesses and said the platforms are scalable to the size of the company and its marketing budget.

“Interestingly enough, there are a lot of similar challenges, not relative to size, just more about the process in the business. In most cases the person behind the counter is not really meant to be a sales associate,” Mr. Rose said.

“Most of them are mechanics also working in the shop. They understand the vehicles and what needs to be done—but not as much about the process of capturing that customer data and understanding how it's going to be used.

“So as a starting point one of the challenges is really just capturing more and better data on the customer at point-of-sale. In a lot of cases we see that even the email capture rate is quite low, under 30 percent in some cases, meaning even though we sell you and we got your vehicle information, we might not even have a great way to communicate with you as a customer.”

Mr. Rose told Tire Business that, “typically, in most cases, what we see is that building the data base is the first priority.” Often a successful way of obtaining a customer's email address is to tell the customer the information is needed to register them for a new loyalty program.

“Just with that simple implementation of a customer loyalty program, we typically see those email capture rates soar from maybe the 30-percent range to the 70-percent range. This gives you a vehicle now to communicate with the customer,” he said.

A loyalty program can collect customer data and provide discounts and offers that are personalized for that customer based on their visits and purchases.

“A lot of the players in the space today are heavily leaning on coupons and blanket discounts that is for everyone, which certainly have their value.

“However, our approach is—rather than raining coupons from the sky and everyone gets the same one—sending one to a customer when they need them based on where they are in their life cycle. Ultimately that's going to drive a higher response rate and bring you closer to the customer.”

‘Smarter' means of contact

Loyalty programs not only are useful for obtaining email addresses, but also developing equity with the customer and communicating with them, such as reminding them when a vehicle service is due. Mr. Rose said that not only do mailings keep the business top of mind with the customer, they may also generate a better response because they have become more relevant and personalized.

“Instead of sending out millions of mailers to everyone in the entire database, we're getting smarter about who we're sending them to, about what services, including what offers," Mr. Rose added. "So we're scaling down the volume that's being sent but increasing the response rate and, overall, increasing the ROI because there is not as much waste in what we're sending and we're also seeing greater returns.”

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.'”

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To reach this reporter: [email protected]; 330-865-6127; Twitter: @kmccarr