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Young, Wired Auto Service Consumers Intensely Price and Convenience-Driven - and Most Receptive to Dealer Loyalty Programs - According to New Study

DMEa's "Marketing Success in a Changing Service Loyalty Landscape" findings include:

-- Loyalty programs are not just for loyalists: Over 25% of "swing loyalists" and disloyalists would participate

-- Communicate! Most customers want to hear from service providers AT LEAST once every 3 months, including 70%+ of dealer and aftermarket chain loyalists

-- 2 in 3 dealer loyalists prefer email communications - more than any service customer, even young aftermarket chain loyalists


News provided by

DMEautomotive

Mar 28, 2012, 08:30 ET

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DAYTONA BEACH, Fla., March 28, 2012 /PRNewswire/ -- DMEautomotive (DMEa), the science-inspired, results-based automotive marketing leader, today released the second in a series of white papers, "Marketing Success in a Changing Service Loyalty Landscape." This new report analyzes the complexities behind service center selection today; consumer communications preferences (by frequency, platform, and service outlet type); and the role that loyalty programs play in retaining loyal, and conquesting new, customers. It's designed to provide dealerships, independent stores and aftermarket chains with the foundational data and best practice communications strategies to drive more revenue, not only from their profitable (minority) loyalist base, but from even higher-opportunity "swing" and disloyalist customers.

Continue Reading

The new white papers (including DMEa's first report, "The Changing Service Loyalty Landscape," analyzing loyalty and industry share-of-wallet realities) represent the most comprehensive window into the $215 billion U.S. auto service market[1] to date. Both are based on a recent DMEa survey of 4,000 U.S. vehicle owners.[2]

"The overwhelming takeaway is that a one-size-fits-all service marketing approach just doesn't work. What motivates shoppers to choose a store, and how they want to be communicated with, can vary dramatically by age and loyalist type," said Doug Van Sach, Vice President, Strategy & Analytics, DMEautomotive. "To send the right message, to the right customer, via the right channel - and effectively reach younger, more demanding, tech-savvy shoppers - means targeting demographic and loyalty segments separately. And with the service business of 77% of customers now in play, those providers that adopt a more nuanced marketing mindset, and reach beyond traditional mass-market and direct marketing tactics, will take market share."

Report Highlights:

Store Selection: What Motivates Those Profitable Loyalists

DMEa's research identifies three service customer types: "loyalists" (who both visit and spend most at a store type); "swing loyalists" (who either visit, or spend most at, a store type, but not both); and "disloyalists" (who neither visit nor spend most at that store type). While loyalists only comprise 23% of customers overall, they drive 59% of industry revenues. Given their massive contribution to each industry player's bottom-line, the report dissected how each loyalist group ranks 30+ service center attributes. The top five attributes for each loyalist type are:

(Photo: http://photos.prnewswire.com/prnh/20120328/FL77804 ) 

It's clear that not only do loyalists place great value on attributes that their primary store is already best suited to deliver, but that there is little overlap between what dealer, independent and aftermarket chain loyalists value most. Dealer loyalists value a "brand/amenity constellation": they want manufacturer-trained technicians, using brand-name parts, following OEM-recommended schedules – and premium amenities. Independent loyalists embrace trust/relationship attributes, essentially valuing friendly, trustworthy people at the store, and signs of trust, like upfront estimates. The aftermarket loyalist places heavy importance on highly tangible price and convenience factors, whether frequent promotions or parts/service pricing options. And given that DMEa's previous white paper found that dealers and independents are now bleeding significant business to aftermarket chains, addressing the price/convenience equation would represent a key strategy to take some market share back.

Loyalty Programs: A Powerful Tool for a Disloyal Market

While many service providers have not implemented a points-based loyalty program, and most imagine loyalty program marketing is only a fit for "true" loyalists, DMEa's data suggests they need to act and think otherwise. While loyalty programs do rank very high for aftermarket loyalists (their #1-indexing attribute is a "frequent shopper" program) and dealer loyalists (rating among the top-10 most important store attributes), openness to a loyalty program is nearly as robust for service centers' swing loyalists and disloyalists:  

Likely to Participate in Service Loyalty Program

 

Aftermarket

Dealer

Independent

Loyalists

32%

34%

22%

Swing Loyalists

27%

31%

16%

Disloyalists

27%

27%

28%

Roughly one-third of dealer and aftermarket chain loyalists report they're likely to join a loyalty program, but so are nearly the same percentage of dealer swing loyalists. And over 25% of dealer and aftermarket swing loyalists - and disloyalists - would jump on board given the option. While independent loyalists and swing loyalists are the least likely to value or join a program, for the rest of the industry a well-designed rewards program represents a powerful opportunity to keep the best customers close, while converting more non-loyalists into the loyalist column.

The Young, Wired Aftermarket Chain Customer

The survey captured which sources of maintenance info various customers turn to the most, and revealed that, despite significant adoption across most customer segments, the young-skewing aftermarket loyalist turns to company websites, social networking sites and online message board/review sites - and prefers emerging digital communications like text messaging and mobile app notification - much more than any service shopper.

"These white papers provide an abundance of data that the service market is volatile and rapidly changing, and that many complex factors shape how consumers decide where to service and how they should best be targeted," noted Van Sach. "We live in the era of personalized, information-based marketing, and sending out sporadic, cookie-cutter maintenance reminders is no longer a viable service marketing 'strategy.'"

Young Consumers: Price and Convenience-Driven

The data reveals that service selection motivators now heavily pivot around age. All under-35 customers place a high value on convenience (extended hours, online appointments, etc.), and young dealer and aftermarket customers (not independent) put a much higher premium on low prices, discounts and coupons vs. those aged 35+. In contrast, service customers aged 55+ are far more likely to value that "brand/amenity constellation," demanding expert advisors, brand-name parts and "full-service extras." Shoppers aged 35-54 exhibit the most variation in their store selection "hot-buttons": for instance, "competitive prices" ranks very high for independent and aftermarket customers, but very low for dealer customers, in that age group.

Young Customers: Key Dealer Rewards Program Targets

And if one imagines that loyalty programs only have traction with older customers in their prime spending years, the data reveals that young dealer customers (aged 18-34) actually value loyalty programs more than any other service shopper. In general, DMEa's new data provides ample evidence that younger consumers "shop the hardest": not only do they heavily value the host of price and convenience factors, they perform more online research (at more platforms) before they pull the service decision trigger. To reach/convert them, providers must exploit database mining, social media, online reviews and loyalty programs - particularly dealerships, that are now least likely to attract young shoppers and who need to shed that "senior center" image. As demographics shift, and new waves of shoppers enter the market, providers will need to shift their service experiences to remain competitive.

Communications Wanted at Least Every 3 Months

Consumers reported on how often they want to hear from their service provider(s), and most segments expect communication at least every three months - with the overwhelmingly preferred channels being mail and email. More than 60%-70% of all dealer and aftermarket customers want communications that frequently via these two channels. (Independent loyalists and swing loyalists are the only customers desiring less communications, and yet half still want contact once every three months.)

No Shopper Prefers Email More Than Dealer Loyalists

Email ranks as the #1 way, and mail the #2 way, that all customers want to hear from their service providers - except for independent loyalists who rate mail higher. These two channels decisively trump live and recorded calls, text messages and mobile app notifications. And, surprisingly, no customer prefers email communications more than the dealer loyalist. Sixty-four percent of dealer loyalists prefer email, while 29% prefer mail - 38% of independent loyalists prefer email, 49% mail - and 53% of aftermarket loyalists prefer email, 38% mail.

To request the full report, click here: http://www.dmeautomotive.com/solutions/marketing-success-in-a-changing-service-loyalty-landscape-whitepaper-request.aspx

About DMEautomotive

DMEautomotive (DMEa) is the industry leader in science-based, results-driven automotive marketing, and provides turnkey marketing to the largest and most innovative automotive organizations, from automobile dealers to many of the largest aftermarket companies in the U.S. DMEa's uniquely panoramic view of the complete automotive sales and service market, combined with its cutting-edge, science-based marketing programs, increases customer yield, conversion and retention.

DMEa does not take marketing performance on faith, and each product and service is measured by a simple, precise scientific approach: Is it true? Prove it. Will it work? Test it. Does it generate results? Show it! Supported by DMEa's proprietary, cloud-based Red Rocket Technology Platform, the DMEa product suite includes science-based, data-driven, multi-channel customer acquisition and retention marketing programs; best-in-class campaign reporting; data management and analytics; auto-focused Customer Interaction Center solutions, and complete on-site mail and email fulfillment services. Headquartered in Daytona Beach, Florida, DMEa also has major operations in Jacksonville, Fla.

[1] AAIA data, 2011

[2] Conducted late 2011. All respondents were responsible for service-related decisions on their primary vehicle(s), and purchased auto service within the last year.

SOURCE DMEautomotive

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