Friday, January 16, 2015

The Missing Piece of Dealer Service Marketing
by Nate Chenenko

I recently bought a certified pre-owned vehicle, and not long thereafter I received this email from the selling dealer. Looks good, right? It tells me what I need to know – my vehicle needs its 50,000-mile service. And it’s actionable – there are links right in the email to schedule an appointment and to get directions.

There’s only one problem: my car doesn’t have 49,223 miles. In fact, I received this email about a month after I bought the car, and when I got the email my car had fewer than 37,000 miles on it. We know that inaccurate mileage estimates are a problem in these service reminders, but, in this case, both the dealer and the OEM knew the actual mileage of the car.

This example shows that we have problems on two levels.
  • On a micro level, the problem is that we’ve got the wrong mileage estimate
  • On a macro level, the problem is that our service marketing isn’t as effective as it could be.
Leveraging a telematics system can help OEMs address both points. On the micro-level point, telematics provides the necessary mileage data to the OEM. No more estimation is required – OEMs now know the exact mileage of each vehicle. The macro-level point is far more important. Telematics nullifies the need for email service reminders in their current form.

Think about the process necessary for a customer to take action on an email service reminder:
  1. Open email program/website
  2. Click on dealer email, which likely looks like spam
  3. Read the entire email to see that service is required – and check that the email has the correct estimated mileage for the vehicle
  4. Click or call to schedule an appointment
  5. Go through appointment scheduling process
Whereas, if a telematics system is fully leveraged for service initiation, the process looks like this:
  1. See a service reminder pop up inside the vehicle
  2. Use the in-vehicle appointment scheduling feature/tool to set up an appointment
This shorter process with more targeted information (better mileage estimates; more local dealer recommendations) is more likely to drive customers to the dealer for service. There are still pros to the old email approach – you can actually look at your calendar, at your convenience, before settling on an appointment date and time. Some owners may opt out of the telematics system entirely. But the improvements telematics can make to the service reminder concept will result in higher service retention.

Bottom Line: In addition to its other benefits, telematics will solve some existing service marketing issues by targeting regular service reminders to those who really need them, and by making those reminders more accurate.

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