After years of lagging behind other industries, customer relationship management (CRM) has become mainstream for the automotive aftermarket, says Brian Warfield, a senior product manager for Mitchell 1.
Simply put, CRM marketing initiatives aim to help shops stay in contact with their customers, Warfield says, and many shops are working to implement these types of strategies in their regular marketing and customer service campaigns.
There are roughly six or seven major companies providing CRM services to auto repair facilities nationwide, Warfield says, each with between 3,000 and 5,000 customers participating in their various programs. He estimates there are between 25,000 and 30,000 shops across the country using full-time CRM marketing campaigns.
It’s a staggering number, especially when you consider this statistic: According to Google research conducted last year, 98 percent of all vehicle owners say they do not receive follow-up phone calls or emails from their regular shop for service and maintenance reminders—the most basic of CRM communications.
Test the math: Roughly a third of the industry is a part of a CRM campaign, yet only 2 percent of all consumers acknowledge receiving any direct contact from shops.
That should stand out as a red flag for the industry, says Uwe Kleinschmidt, CEO of industry marketing firm AutoVitals Inc.
“That perception seems accurate,” Kleinschmidt says. “That number could be slightly off, but that definitely is the perception [customers] have.”
“Shops think they are doing this, and they are paying for services to do this, but many are missing the target,” he adds.
So, where’s the disconnect? Both Kleinschmidt and Warfield: It comes down to a shop’s processes.
Need a Reminder?
Customer relationship management is still a very large struggle for many shops today, says Uwe Kleinschmidt, CEO of industry marketing firm AutoVitals Inc. And Google’s “Road to Winning Drivers - Aftermarket Service” backs up that claim. According to Google data, roughly 71 percent of vehicle owners do not rely on their auto service provider for service reminders.
How do you determine it’s time to service your car?
-I maintain my own service calendar — 31 percent
-Sticker reminder from service center — 26 percent
-When my odometer notes a particular mileage — 22 percent
-Dashboard light reminder — 18 percent
-Email or phone call reminder from mechanic — 2 percent
Relationship Marketing
CRM is really as simple as it’s name suggests, Warfield says. The goal is to create a stronger bond with your customers to create loyalty. “It’s relationship marketing,” he says, and that relationship needs to stretch long after that car is returned following a repair.
Today, technology offers avenues for businesses to do that in ways that weren’t available before.
Companies like Mitchell 1, AutoVitals, Demandforce, MechanicNet, ALLDATA, and a number of others provide systematic, targeted email campaigns that can not only act as service follow-ups (thank-yous, quick reminders, etc.), but also can keep customers updated down the road on what their vehicles may need.
Email marketing to “current” customers (those who have already had work performed) can be an extremely effective way of keeping in touch. Warfield says shop owners can typically see somewhere in the range of a 3-to-1 return on their investment. And Kleinschmidt says the ability to segment customers based on previous work and really direct specific, personal emails at each customer gives shops a powerful tool in an effort to retain their future service work.
AutoVitals uses a sophisticated model in measuring retention based on its CRM campaigns, factoring in only how customers follow a shop’s recommendation in its marketing material. (It’s based on timestamps, type of work requested, frequency of phone calls, and a number of other factors.)
Kleinschmidt says the “best shops” in the company’s program see retention rates between 60 and 70 percent. A minimum benchmark for any shop using the tools should be 40 percent, he adds.
Lost Connection
So, if even the most basic of CRM initiatives can be so effective, why are shops missing 98 percent of customers with this type of communication?
Most customers simply aren’t aware they are getting them. And, for shops, that’s all in the execution.
“All the tools and bells and whistles you can buy aren’t going to be effective without you working in the shop to begin building that relationship,” Warfield says.
CRM doesn’t start when the customer leaves, Kleinschmidt adds. It begins the moment they call the shop the very first time.
“It’s one long continuum of connection with that customer,” he says. “You have the initial phone call, the estimate, the updates, the pickup of the vehicle—each of these touch points is a part of the process. Shops have to focus on building that relationship at each step.”
Vehicle delivery is the most important, both Kleinschmidt and Warfield agree. Front-desk employees need to communicate the follow-up process to customers; they need to tell them that they will receive a check-in call about the repair in the next day or two, and an email follow-up there after. Kleinschmidt says that shops in the AutoVitals system have above a 50 percent open rate on emails when they inform the customer when it will be coming.
And then, he says, shops need to take a tip from dentists and pre-schedule the next appointment.
“Most service advisors look at that backwards,” he says. “They think it’s an intrusion of privacy. But it’s simply not adequate today to not ask.
“Almost all shops are a local business, and everything needs to be about building relationships. If you build that relationship, then these forms of communication are just a continuation of that relationship. Asking for an appointment isn’t an intrusion then. It’s expected, and if you have the relationship and loyalty, they’ll trust it.”
