Four customer loyalty and profitability wins

By James Lever, director, client services, TekCor4

The tension between achieving short-term profitability targets and nurturing long-term customer relationships is a constant challenge. Ensuring a positive customer experience often requires you to provide competitive pricing, superior service and a raft of additional benefits, which can reduce profitability.

Balancing these investments with the necessity to meet bottom-line considerations can be a true head-scratcher, so what’s the solution?

The short answer is data. The long answer is, of course, more nuanced than that. This article explores some of the key strategies and tools that can empower your retailer to harness the full potential of data using predictive software. By leveraging data effectively, you can ensure that every customer interaction is a step towards increased satisfaction and sustained business growth.

1. Prioritise data accuracy

Before you do anything else with your customer data, the first step is to ensure it is accurate and up to date. Without accurate data, you are just taking a shot in the dark.

The reality is that manual integration of vehicle data into a DMS can all too often lead to poor quality of information. As a result, the data on record can be drastically inaccurate, with estimates suggesting that, on average, 40% of MOT dates on a DMS are incorrect. The statistics are similar when it comes to routine servicing, with 34% of service dates out of date by over 60 days.

Just think about that for a second and consider how much of a barrier this might be to building relationships with customers beyond the initial sale. Our data tells us that a staggering 50% of active workshop customers do not return to the same dealer for their MOT, but is that really a surprise if 40% of them haven’t been contacted at the right time?

To build long-term relationships, it is pivotal that you prioritise data accuracy to create personalised experiences that foster long-term loyalty and trust. 

2. Clarify your message

Accurate data is vital for customer retention, but it won’t boost your profitability on its own. It’s how you use that data that really matters – and here we’re talking about messaging and communication. Accurate data provides the best possible foundation for crafting clear and compelling messages and it also enables you to contact customers at exactly the right time.

For this scenario to be possible, you should consider exploring avenues beyond your basic DMS. With predictive software at your disposal, for instance, you will know what the required message is, how it should be delivered and when – for every individual customer. How? Because the software does the job for you.

Armed with this data, you can stay on top of every customer’s journey with ease and maximise every profit opportunity. Whether it’s an MOT, a service, or a brake or gearbox oil change, you can deliver a tailored message at precisely the right time for the customer.

3. Create additional touchpoints (especially when it comes to EVs)

So, you have accurate data and can harness it for tailored and timely communications, but how do you use it to drive profitability? The key is identifying more customer touchpoints to generate additional profit.

The typical new car has over 200 variables when it comes to managing its aftercare, far beyond just basic services and MOTs. A traditional DMS with inaccurate service information is barely able to scratch the surface of the profit opportunities from these variables. To generate additional revenue, you need a software solution that uses data to engage customers beyond the obvious maintenance and repair routes.

Predictive systems evaluate multiple variables, including mileage, age, vehicle specifications and components to identify opportunities for customer interaction. For instance, they can flag when brake pads are wearing or when tyres likely need replacement. These are clear opportunities for you to contact your customers and get them in to have potential issues checked and resolved – opportunities that would not consistently present themselves without predictive software.

The need to maximise customer touchpoints is even more pressing as the electric vehicle (EV) parc continues to grow. According to research undertaken by TekCor4, 78% of vehicles under three years old will be EVs by 2030. Our research also suggests that EVs only provide 60% of the touchpoint opportunities in the first ten years of their lifecycle compared to internal combustion engine vehicles. Logically, this should lead to a reduction in the number of customer visits, which would also see labour hours, oil sales, and parts sales fall.

In a market where the opportunity to sell labour, parts and services looks set to diminish, predictive data can help you give customers reasons other than their routine service to engage and visit.

4. Manage efficiency and resource allocation

Efficiency is a key driver of profitability, but with such a variety of touchpoints across the customer journey, a basic DMS just isn’t sophisticated enough to track and record every update to a driver or vehicle status. In many cases, this can lead to inefficiencies and wasted resource.

A prime example of this is private changes in vehicle ownership. Between 15 and 25% of vehicles change owners every year, either privately or via the many available sales channels. As a result, central DMS records rapidly become out of date. Without appropriate investment in essential data cleansing, much of the advice above becomes obsolete, because you can no longer be sure who you should even be contacting about a vehicle.

This situation can lead to an enormous amount of wasted resource that could instead be directed to nurturing active customer relationships and acquiring new business. Predictive software can again be a solution to this issue, as it can directly access DVLA information and quickly identify when a vehicle sale has taken place, enabling you to update your records accordingly.

In summary

The journey to harnessing your data and keeping your customers engaged and loyal – while creating opportunities to profit – begins by using accurate data to inform your customer interactions. From here, it is a matter of combining that data with the appropriate messaging to deliver the right message at the right time – and utilising it to identify more opportunities to get your customers through the door. As we’ve seen, data is also a valuable asset in preventing wasted time and resource. If your dealership incorporates predictive software, it will take big strides towards mastering these crucial factors and retaining its customers for the long haul.