Service Marketing 2010: New Solutions for New Challenges
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Service Marketing 2010: New Solutions for New Challenges

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Presented by DriverSide in partnership with R. L. Polk & Co., this white paper "Service Marketing: New Solutions for New Challenges," discussed:...

Presented by DriverSide in partnership with R. L. Polk & Co., this white paper "Service Marketing: New Solutions for New Challenges," discussed:

* The latest research findings on the challenges facing service marketing.
* Simple and effective marketing solutions that can help you overcome these challenges.
* How advances in data mining and incentive optimizations can increase your sales.

This study is authored by Kevin Root, VP of Product Strategy at DriverSide, a frequent keynote speaker on automotive eCommerce and service performance improvement.

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Service Marketing 2010: New Solutions for New Challenges Service Marketing 2010: New Solutions for New Challenges Presentation Transcript

  • Service Marketing 2010: New Solutions for New Challenges Kevin Root, DriverSide December 15, 2009
  • Agenda Service Marketing • The Situation • The Challenge • The Solution
  • The Situation
  • Market Factors Impacting Service Revenues Growth: Vehicles >10 yrs. old Consumers Keeping Cars Longer Average length of ownership (number of months) Average Age of U.S. Light Vehicles
  • Service Retention Declines As Vehicle Ages Source: R. L. Polk & Co. / AAIA Fact Book
  • The Challenge
  • Consumer Service Spend is Changing Where the Service Dollars are Spent Today: Other , 19% Dealership Service Dept 44% Indpependant Repair Shop, 37% Source: NPD Research May 2009
  • Consumer Service Spend is Changing Where the Service Dollars are Spent Today: Other 19% Dealership Service Dept 44% Independent Repair Shop 37% …but independent repair shop business is 37% and growing Source: NPD Research May 2009
  • Attack From All Sides - Example: Orphan Owners Where service customers go when their new vehicle dealership closes… Somewhere Else DIY 3% 10% Unsure Where 12% Dealership Service Departments 51% Independent Auto Service Center 24% Source: NPD Research May 2009
  • Consumer Perception Research: 660 Consumers Perception of: Dealership Service Departments National Light Repair Centers Locally Owned Independents Source: DriverSide/Kelton Research October 2009
  • Consumer Perception: Highest Quality Repair If price were equal, which of the following types of service providers do you think would provide the highest quality of repair? Light Repair Center 14% Locally-Owned New Car Repair Center Service 46% Department 40% Source: DriverSide/Kelton Research October 2009
  • Consumer Perception: Best Value Which of the following types of service providers do you think would provide the best value for your money? Light Repair Center 23% Locally- Owned New Car Repair Service Center 53% Department 24% Source: DriverSide/Kelton Research October 2009
  • Consumer Perception: Overcharging Which of the following types of service providers do you think would be most likely to overcharge you for the work done? Locally- Light Repair Owned Repair Center 18% Center 16% New Car Service Department 66% Source: DriverSide/Kelton Research October 2009
  • Reality Research: 230 Mystery Shop Calls to: •Dealership Service Departments •Light Repair Centers •Locally Owned Independents 2 Basic Repairs / 2 Typical Cars - R&R new Radiator - R&R new Front Rotors & Pads Compared time to MRRT Source: DriverSide/Sorgenfrei Research September 2009
  • Reality: When compared to published standard time tables reflecting Manufacturers’ Recommended Repair Time: 71% of repair facilities over- quoted the repair time on Accurate 4% average Under Quoted 25% Over Quoted 71% Source: DriverSide/Sorgenfrei Research September 2009
  • The Newest Challenge…
  • Social Media: Service Reviews
  • The Power of Consumer Influence & Role of Social Media • 74% of consumers choose companies and brands based on what others say online about their customer service experiences. (Society for New Communications Research, May 2008) • 86% of consumers read online business reviews before making purchase decisions; 90% of whom say they trust these reviews (Kudzu.com survey of 600 users, December 2008) • Nearly 49% of shoppers have made a purchase based on a recommendation through a social media property (Razorfish, October 2008) • Almost half of US online adults read ratings and reviews at least once a month and 19% post them. Nearly twice as many read reviews compared with 2007. (The Growth Of Social Technology Adoption, Forrester, October 2008)
  • Will Ratings & Reviews Impact Service Business?
  • It Impacts New Car Sales….
  • The Solution
  • To build a ***meaningful*** relationship with the customer
  • Consumer Perception: Ongoing Relationships Question: Which of the following types of service providers do you think would be most likely to try to develop an ongoing relationship with you? Light Repair Center 13% New Car Service Locally-Owned Department Repair Center 26% 61% Source: DriverSide/Kelton Research October 2009
  • Consumers Reality: • Service Reminder Post Cards? • Generic Coupons & Flyers? • Simple “Time Based” Mailings?
  • Relationship Building: The three success drivers of new service marketing: Relevancy Reputation Results
  • Relevancy Drives Retention Relevancy Foundation for Relevancy: Reputation Results – The medium – The message – The incentive – The consumer/prospect profile
  • Delivering Relevancy
  • Relevant Information = Consumer Value • 500+ Articles • 50+ Videos • “Ask A Mechanic” • Diagnose A Problem • Community • Ratings & Reviews • Dealer Branded, Customized + Service Incentive Optimization
  • For Smart Marketing – Go Beyond RO Mining RO Records/ Values Sales History Customer DIY/DIFM & Rating Prospect Profile Lifestyle Profile Social Network Profile
  • For Smart Marketing – Go Beyond RO Mining Advanced profiling – connect this to service data Key Influencers Source: Rapleaf
  • For Smart Marketing – Go Beyond RO Mining RO Records/ Media Values Sales Response History History Incentive Customer DIY/DIFM Response & Rating History Prospect Profile Customer Value Lifestyle Score Profile Social Network Profile
  • Delivering Service Marketing Relevancy • Use an automated service – “set it and forget it” • Includes service records analysis – Mined for key profile info including: loyalty indicators - increasing/decreasing engagement, etc. • Delivers Intelligent Marketing Campaigns – Optimized service incentives based on frequency of visit, declined maintenance and response history – Delivers service prospect marketing based on advanced target profiling
  • …But does it work?
  • Relevancy Dealer Results: • Higher Service Frequency: Reputation Results 27% increase in annual service frequency (from 1.54 to 1.96 service visits per customer) • Increased Service Revenue: $107 increase in annual service revenue per customer • Lost Customers : 22% of service revenue contributed from recaptured “lost” customers
  • And What about Reputation?
  • Reputation Management: Relevancy The newest trend in service marketing Reputation Results
  • Transparency is Rewarded Relevancy Your Reputation becomes your brand… Reputation Results … and your best new media marketing tool
  • Summary of Key Points • Service customer base under attack from all fronts - including consumer perception. • Social media rewards transparency in service dept. • Focus on Relevancy, Reputation and Results. • Mine data more aggressively, go beyond RO’s - think predictively. • Optimized service marketing delivers impressive, measureable results – for service and new car departments.
  • Thank You. kroot@driverside.com To learn more about DriverSide’s service marketing solutions, please visit: driverside.com/sales