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Young, Wired Auto Service Consumers Intensely Driven By Price, Convenience

According to new analysis from Daytona Beach, FL-based DME Automotive (DMEA), a one-size-fits-all service marketing approach simply doesn’t work. What motivates shoppers to choose a particular service outlet, and how they want to be communicated with, varies dramatically by age and loyalist type. To send the right message, to the right customer, via the right channel — and effectively reach younger, more demanding, tech-savvy shoppers — means targeting demographic and loyalty segments separately.

DMEA’s latest report, Marketing Success in a Changing Service Loyalty Landscape, is based on a survey of 4,000 U.S. vehicle owners. The firm breaks the participants down into three types:

• “Loyalists” both visit and spend most at a particular type of service center;

• “Swing loyalists” either visit, or spend most, at a service center type, but not both; and

• “Disloyalists” neither visit nor spend most at a given type of service center.

DMEA says that loyalists comprise 23 percent of service center customers but drive 59 percent of service center industry revenue. Loyalists place great value on attributes that their primary store is already best suited to deliver, and there is little overlap between what dealership, independent repair shop and aftermarket chain loyalists value most.

Dealer loyalists value manufacturer-trained technicians, using brand-name parts and following OEM-recommended schedules, as well as premium amenities. Independent repair shop loyalists embrace trust and relationship attributes, essentially valuing friendly, trustworthy people at the shop, as well as signs of trust like upfront estimates. The aftermarket chain loyalist places heavy importance on tangible price and convenience factors, including frequent promotions and parts/service pricing options.

DMEA points out that loyalty programs can be a powerful tool for a disloyal market. While many service providers have not implemented a points-based loyalty program and most imagine loyalty program marketing is only a fit for “true” loyalists, DMEA’s data suggests that openness to a loyalty program is nearly as robust for swing loyalists and disloyalists:

Likelihood to Participate in Service Loyalty Program

                                   Aftermarket Chain……….Dealer ……… Independent Repair Shops

Loyalists ……………………. 32%……………………34%……… ………………22%

Swing Loyalists …………….27%……………………31%……………………….16%

Disloyalists…………………..27%……………………27%………………………28%

Roughly one-third of dealer and aftermarket chain loyalists say they’re likely to join a loyalty program, but so are nearly the same percentage of dealer swing loyalists. And more than 25 percent of dealer and aftermarket chain swing loyalists — and disloyalists — would jump on board given the option. While independent repair shop loyalists and swing loyalists are the least likely to value or join a program, for the rest of the industry, a well-designed rewards program represents an opportunity to keep the best customers close, while converting more non-loyalists into loyalists.

The DMEA survey also captured which sources of maintenance information customers turn to the most and revealed that the young-skewing aftermarket chain loyalist turns to company websites, social networking sites and online message boards/review sites — and prefers emerging digital communications like text messaging and mobile app notification — much more than any service center shopper.

The research also reveals that service selection motivators now heavily pivot around age. All under-35 customers place a high value on convenience (extended hours, online appointments, etc.), and young dealer and aftermarket chain customers (not independent repair shop customers) put a much higher premium on low prices, discounts and coupons versus those aged 35-plus.

In contrast, service customers aged 55-plus are far more likely to demand expert advisors, brand-name parts and full-service extras. Shoppers aged 35-54 exhibit the most variation in their service center selection hot-buttons. For instance, “competitive prices” ranked very high for independent repair shop and aftermarket customers, but very low for dealer customers, in that age group.

And, if one imagines that loyalty programs only have traction with older customers in their prime spending years, the DMEA data reveals that young dealer customers (aged 18-34) actually value loyalty programs more than any other service center shopper. In general, younger consumers shop the hardest. Not only do they heavily value a host of price and convenience factors, they perform more online research before they pull the service center decision trigger. To reach and convert them, DMEA says service centers must exploit database mining, social media, online reviews and loyalty programs. This is particularly so for dealerships, which DMEA says are now least likely to attract young shoppers and need to shed that “senior center” image. As demographics shift and new waves of shoppers enter the market, service centers will need to shift their customer experiences to remain competitive.

Consumers also commented on how often they want to hear from service providers, and most segments expect communication at least every three months with the overwhelmingly preferred channels being mail and email. More than 60-70 percent of all dealer and aftermarket chain customers want communications that frequently via these two channels. Independent repair shop loyalists and swing loyalists were the only customers desiring less communication, yet half still want contact once every three months.

Email ranked as the No.-1 way, and mail the No.-2 way, that all customers want to hear from their service providers — except for independent repair shop loyalists who rate mail higher. These two channels decisively trump live and recorded calls, text messages, and mobile app notifications. And, no customer prefers email communications more than the dealer loyalist: 64 percent of dealer loyalists prefer email, while 29 percent prefer mail; 38 percent of independent repair shop loyalists prefer email, 49 percent mail; and 53 percent of aftermarket chain loyalists prefer email, 38 percent mail.

DMEA is an automotive marketing firm servicing automobile dealerships as well as aftermarket companies. For more information on this and other reports, visit
www.dmeautomotive.com.

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