Using Data to Solve Your Service Absorption Issues




Goals for Service Absorption

 

The issue of their customers defecting and having their vehicles serviced at aftermarket facilities is one that dealerships and their service managers are always working to address. In comparison to OEM customers who continue to service through the dealership, OEMs reward dealerships based on the number of OEM customers registered in their core marketing area. In order for dealers to receive their incentive, they typically need to service about 70% of all brand-new vehicles.

 

Getting Rid of the Defection Issue

 

What can service managers do if service intervals are increasing but dealerships are not informed of customer defections until it is too late? When the warranty on a new vehicle ends, there is a significant defection period because customers begin to service their cars elsewhere rather than going back to your dealership. The dealership will not know who the owner is unless they have the registration information or if the customer decides to visit the dealership for service when the car is sold to its second or third owner. The dealership must wait until the vehicle is registered in their core marketing area.

 

How many of your clients are leaving for the aftermarket, then? How much closer would you get to meeting your OEM’s standard for servicing vehicles in your main marketing area if you could take advantage of these known defectors and be “in the market” for service customers?

 

These Known Defectors are who?

 

People who reside in close proximity to your dealership and drive a specific brand of car are known defectors. Dealerships may now determine when a mobile device has visited an aftermarket location by employing proximity targeting. In order to identify whether a mobile device is in an aftermarket place and to track how long it is there, proximity targeting uses latitude and longitude data. Whenever a customer spends more than 30 minutes at an aftermarket location, they are deemed to be a “known defector.”

 

Additionally, data partners have the capacity to scrape credit card statements in bulk in order to determine whether clients have charges from aftermarket places on their credit cards as well as the service that was rendered. These audiences can be specifically targeted with Facebook and display advertising using this data, which may encourage them to visit the dealership once more when it’s time for service.

 

Exactly how does this operate? Using a real-world illustration Jiffy Lube recently performed an oil change on Peggy. Her phone was found at the aftermarket site, which is in your dealership’s main marketing territory, according to proximity targeting data. Additionally, data partners can see the oil change bill that was charged to her credit card. The following time Peggy needs an oil change, she receives an advertisement for a special deal that encourages her to return to the dealership for service rather than visit the aftermarket facility.

 

How Can You Tell If a Client Is “In the Market” for Services?

 

Data can also assist car dealerships in locating individuals who drive a specific brand of car, reside nearby, and are “in the market for service.” Customers’ internet searches for servicing parts and locations, as well as their visits to various dealerships and aftermarket websites, can all be recorded. As a result of this online behavior, you can send the customer a Facebook or display advertisement to persuade them to visit your dealership. You can now use digital advertisements and other special offers to persuade clients to visit your dealership.

 

For instance, Doug needs a new alternator because his automobile recently broke down. According to the data, Doug is the owner of a Toyota Camry in the key marketing territory of the dealership’s marketing department. Doug has his car towed and asks his friend Ryan to pick him up. They return to Ryan’s home to begin looking up rates and other details. To find out the price of alternators and the expense of having one installed, they can Google “prices for alternators” and then visit aftermarket websites like Jiffy Lube and AutoZone. Doug is now part of the “In the Market for Service” audience as a result of his online behavior, and service advertisements for the Toyota dealership nearby are now displayed to him. Doug then obtains top-notch service from the dealership and decides to stay with them for all future repair needs and vehicle purchases.

 

How Effective Is This New Technology? For a Luxury OEM, it did!

 

Because this technology is new to the market, a high-end OEM just conducted a pilot to evaluate its efficacy. The experiment operated for two months in the OEM’s chosen store’s key marketing areas. Nine stores participated in all, ranging in size from tiny to larger businesses, and they used advertising to target owners of luxury OEM automobiles who were defecting or in the market for service. Dealerships typically received $18 in return for every $1 they spent on advertising. Small businesses reported a $16 return on every dollar spent. Large stores reported an ROI of $22 for every $1 spent, while medium stores reported an ROI of $18. In order to continue catching these known defectors and exploiting the data for optimal service absorption, this luxury OEM is now introducing the technology to all of its locations across the nation.