Six strategies to help boost long-term retention

Volatility in new car sales over recent years has meant there are fewer prime first- and second-owner vehicles entering franchised workshops. To enhance profitability and service bay utilisation, there is, now more than ever, merit in reaching out to owners of older vehicles.

Indeed, older vehicles can offer greater profit potential through their increased maintenance and repair requirements – even when it is necessary to apply a discounted labour rate. In addition, owners of these vehicles can be targeted by the sales team, offering a no-obligation valuation, and encouraging them to consider their next vehicle purchase.

But how do retailers make the most of the opportunity? Jeremy Evans, CEO of Marketing Delivery, has six top tips.

1: Optimise your Data Quality

The first step for encouraging customers into the workshop is to make sure you can contact the appropriate people. That means having accurate, relevant customer data. According to Marketing Delivery analysis of customer records held by UK franchised retailers, nearly 28% of ‘keeper details’ are inaccurate, with vehicles having either changed ownership (26.3%), been scrapped (1%) or stolen (0.4%).

Routine data cleansing can ensure the retailer reaches the right people with the right message at the right time. Communications should always be timely – contacting a customer about a service or MOT when they no longer have the car or when they are not due an appointment can be counter-productive and diminish consumer confidence.

One retailer that has seen the benefit of addressing this data challenge is Rossetts Commercials, a Mercedes-Benz commercial vehicle dealer operating in Surrey and Sussex. “It engaged Marketing Delivery in 2023 to evaluate its customer database,” says Jeremy, “a process that established approximately 30% of records – relating to over 21,000 vehicles – needed to be updated.

“Manually processing this volume of records would have taken one member of the Rossetts team around 1,050 hours – that’s seven months of work. We automated the entire process, checking Rossetts’ customer records against the DVLA database and other data sources to amend relevant details.”

2: Get the timing right

In a nationwide survey of motorists commissioned by Marketing Delivery, 70% of those questioned about their contact preferences said that they ‘agree’ or ‘strongly agree’ with the statement: “I would be more likely to book my car in for a service or MOT with a dealer that monitors the date on which it is due and makes the effort to contact me about it in advance.” 

This underlines the value of timely communication, along with consumers’ appetite to be contacted and reminded about upcoming vehicle maintenance dates to avoid being caught out.

“Our VoiceBox system can access DVSA records to retrieve correct MOT dates and, as a Keyloop Approved Partner, it can automatically upload them to the dealer management system, offering significant time savings for data administration teams.”

3: Customise messaging for older vehicles

Another opportunity to enhance retention is by offering cost-effective service and maintenance packages, or discounted rates for older vehicles, as well as flexibility with payments. Such options help reassure customers they are getting plenty of value for money, and that they don’t necessarily have to pay a lump sum once a year when their car is due a service.

This can be particularly important for the customer because the required outlay for remedial red and amber work can increase as the vehicle gets older. It also helps retailers to create a pipeline of aftersales work for years into the future.

However, retailers must take into account communication preferences. “According to our survey, almost a third of motorists prefer to hear from their chosen workshop via SMS – yet reaching out to customers in this way can be both difficult to manage and costly when using mobile handsets. Make sure your digital communication tools are capable of sending SMS messages, and also allow for two-way communication – essential when the customer responds with a question.

4: Don’t miss the hidden opportunity in recalls

No matter what the age of the vehicle, recalls for safety, technical and software updates will continue to crop up. Recall activity can generate revenue in its own right, but it also affords essential opportunities to conduct vehicle health checks to identify other red and amber requirements.

Crucially, it also provides the basis to reactivate lapsed customers. “An example of this can be seen in our work for Sandown Group. In the last 12 months, the business has secured almost £350,000 of additional workshop revenues by proactively engaging with lapsed aftersales customers who own vehicles subject to an outstanding safety recall.

“By cross-referencing the Group’s customer database with current OEM recall data, we were able to identify those vehicles with an outstanding safety recall and issue an automated communication tailored to each customer’s specific circumstances. 

“There were 5,558 vehicles identified with an unresolved recall that were owned by customers who had not visited a Sandown site within the past 24 months. From this campaign, Sandown also incentivised lapsed customers to revisit the aftersales department with specialised offers. With this, the Group saw almost 50% reactivation from safety recalls.”

5: Think outside the box

Other than contacting customers with the usual reminder when MOT or service work is due, how can communication be stepped up and optimised to maximise retention?

Retailers can promote periodic safety checks, as well as share offers around those dates when customers might be in a spending mindset, such as the change of seasons in spring or autumn. This is where data quality once again comes into its own, ensuring vehicles are still owned by the customer you have on file, to minimise wastage of resources.

6: Use automation to sharpen the strategy

Once the workshop has accurate data in place, automated marketing communications can be used to distribute messages, at scale, to the correct customers in a timely and personalised way.

“Automating emails and SMS messages are well proven for boosting aftersales bookings and customer retention. We found that, for cars between five and seven years, bookings that result directly from an email reminder rose from 22.8% in 2022 to 26.8% in 2023. For cars over seven years old, the conversion rate increased even more significantly – up from 18.9% to 23.6%.

“By having the right data, tools and processes in place, and by broadening the target market to incorporate older vehicles, retailers will be ideally placed to enhance aftersales revenues and retention.”