New and Used Retail Customers
New and used retail customers are those who did not purchase a service contract at the point of sale. These customers are an important target group for lifecycle marketing, as they may be more receptive to a service contract offer later in their vehicle ownership lifecycle.
Timing is key when targeting this group – waiting until 90 days after the sale can avoid competing with follow-up from the F&I department. Personalized messaging that highlights the benefits of a service contract and addresses any concerns or questions can also improve response rates.
According to a recent study by Ally Financial, customers who purchased a service contract from their dealership had a lower likelihood of canceling their contract and a higher likelihood of purchasing another vehicle from the same dealer. This highlights the importance of targeting new and used retail customers with a lifecycle marketing approach for service contracts.
Service Department Customers
Service department customers are those who may not have purchased a vehicle from your dealership but have utilized your service department. This group is important to target as they have already established a relationship with your dealership and may be more likely to purchase a service contract in the future since they are fully aware that unexpected mechanical issues and repairs may happen.
Accurate data collection is key when targeting this group – using the current mileage and service data shown on the most recent repair order can help ensure accurate targeting. This is also a key time to gather other customer data and learn about their driving habits.
Personalized messaging that highlights the value of a service contract and addresses any concerns or questions can also improve response rates for service department customers. According to a study by DealerSocket, targeted email campaigns to service customers can result in a 15% conversion rate for service contracts.
Expiring Service Contract Holders
Expiring service contract holders currently hold a service contract and own a vehicle that their family plans to keep. This group has the highest response and closing rate and can even generate new vehicle sales.
Timing is important when targeting this group – incentivizing renewals before the contract expiration date can improve response rates and increase customer satisfaction.
According to a study by IHS Markit, customers who renew their service contract are more likely to return to the same dealer for future repairs and maintenance. This highlights the importance of targeting expiring service contract holders with a lifecycle marketing approach for service contracts.
Rev Up Your Revenue with Post-Sale Vehicle Service Contracts
By targeting key customer groups with the above approach, automotive dealerships can increase their chances of re-capturing missed sales and generating new revenue streams. New and used retail customers, service department customers, and expiring service contract holders are all important groups to consider when implementing a lifecycle marketing strategy for service contracts. Post-sale vehicle service contract marketing can assist any dealership.
We encourage dealers and agents to consider partnering with a trusted provider, such as APC, to help optimize their marketing cycles and maximize revenue opportunities. Reach out to us today for a free program demo.
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