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Implementation – the key to unlocking the power of a strong retention strategy – Key2Key case study

Pic credit: qimono at Pixabay

Before becoming Global Sales Director for Chrysalis Loyalty, Steve Fitzgerald was a customer of the Key2Key customer retention tool. His experience of implementing Key2Key for a major automotive brand revealed that even the most powerful system cannot be simply ‘plugged in’ and expected to deliver instantly optimal results. Instead there are real life variables which must be accommodated in the implementation phase to make the most of the tool and its underlying data.

He explains: “Key2Key offered – in theory – an almost automated solution to retaining and renewing customers without the need to manually calculate where each one was in the renewal cycle. We quickly found out that there was more to it than simply running the tool, calling the customers and saying ‘you’re in a great position to change with little or no change in your monthly payment’.

“For example, we initially found that we were only able to set one appointment for every 15 people we contacted. And only half of those people were going on to buy a car. We quickly learned that we needed to focus closely on the ‘soft skills’ necessary for handling calls and change the objective of the call itself.

“It was becoming clear that immediately talking numbers on the phone risks immediately descending into a wrangle over the part-exchange valuation. Setting unsustainable expectations in the initial call was also common mistake and we realised that this could stem from ill thought out alignment between incentives and outcomes. If the outbound caller is incentivised only on persuading the customer to attend a meeting and has no stake in the eventual appointment they will tend to exaggerate the customer’s advantages, only to set them up for a disappointment.

“The solution was training our callers to focus only on setting the appointment for a face-to-face discussion, without setting expectations. The ratio of appointments made rose to 70% of customers contacted, with 90% actually attending the showroom. And by leaving the dealer fully in control of the discussion of the details around any possible deal available for the customer we began to achieve a conversion rate of 80% into a new car.

“Working this back to the original number of customers initially called the contact to sale ratio rose to 50%. By focusing on training and fine-tuning the quality of every point of customer contact all the way to the reception of the customer arriving in the showroom, we created a sustainable and replicable approach. These lessons now help us implement the Chrysalis process without the pain of inventing it from scratch. The benefits are enjoyed at every level. The manufacturer sells more cars than it otherwise would – typically three cars in six years to a customer instead of two while also maintaining market share and insulating itself from conquest sales by competitors.

“The dealer increases revenue and profit by selling more cars, with sales staff commensurately rewarded more. The more rapid turnover of agreements means the finance company increases the value its portfolio and retains more customers. And, importantly, the customer who wishes to enjoy the benefit of changing into a new car more regularly is happier and consequently more likely to stick with the brand and dealer over time. Perhaps the most remarkable measure of success, however, was the emergence of in-bound calls from customers who had already been through the new renewal process previously and were now anticipating a repeat of the experience. Those customers were also often prepared to put money into a new deal, such was the goodwill generated by their previously agreeable and satisfying experience of changing their car.”

This case study was first published in Auto Retail Profit

More customer retention best practice advice for automotive brands, funders and retailers is available in the free Chrysalis Loyalty white paper. Download it from  www.chrysalisloyalty.com/white-paper/

 

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Customer renewals driving dealer business growth – a Key2Key case study

Alison Roberts – Renewals Centre Manager, Swansway

Customer renewals are too often overlooked as a central strand in a motor retail business’s growth strategy. There can be many reasons for this. It may be that times are good for the business and a plentiful supply of new customers is keeping sales staff busy. This is when positive external economic forces can distract everyone from the value inherent in renewals. However, even when a business has a defined customer renewals strategy in place, our research suggests that it can under-perform simply through missing the opportunities around the very best moments for customer contact. Rigorous processes can also fail to deliver simply due to the wrong staff being tasked to implement them.

We recently published research revealing that it is not as unusual as it should be for a customer renewal strategy to result in only one sale for every ten or even 20 customers contacted. But when a renewal strategy is implemented well, with the right people delivering it, the results can be spectacular. So it is with Swansway, a dealer group concentrated across the north west and selling 13 brands. At Swansway a combination of the Chrysalis Loyalty Key2Key system for understanding the optimal timing based on the customer’s financial position and the available offers to enable them to change car along with a highly skilled call centre team nurturing the strongest customer relationships delivers best-in-class results with one sale to every 1.4 customers contacted.

Alison Roberts heads a team of five, focused exclusively on Swansway’s customer renewals. And last year they brought in 800 sales for the franchise brands with which they are supplied the Key2Key data and dashboard system. Their success stems from a combination of clearly defined process with ‘soft skills’ so effective that many customers are on first name terms with the team – who are also regularly fielding inbound calls from people anticipating the renewal process.

A sign of Swansway’s understanding of the value of such skills is that Alison had no prior background in car sales when she began building the team. Today, with the advice and help of Chrysalis Loyalty, the team is delivering best-of-breed results. Although Key2Key provides unrivalled insight into the options for renewal at very specific moments in a customer’s contract, the strength of the Swansway strategy stems from a holistic approach to the long-term customer relationship.

She explains: “Three years ago we began making calls at two, eight and 14 months, just to keep in touch and understand what their needs are.  Even if we can see they are not in a great position now we can get a clearer understanding of where they will be in the future. They are never surprised to receive the calls because we give the customer a booklet when they first buy their car, explaining how we will maintain contact with them and why. It’s very softly softly, with no hard sell and the customers appreciate it. They may have had problems with something like pairing phones with their car and we help them with things like that. Only about a third of the calls we make are with the intention of setting a renewal appointment.

Alison Roberts (2nd from left), with members of the Swansway renewals team.

“Key2Key shows us exactly where they are in terms of their opportunity to change and in the cases of brands where we do not have the Key2Key data it is a much less qualified call – more a stab in the dark. Having insight into the customer’s exact position also gives us as callers more confidence and so those calls are more professional. It means there is no risk of wasting their time and that means our own time is spent more efficiently too.

“One brand just took Key2Key and we have literally been able to move on from using a spreadsheet and a phone to manage those customer contacts to a clear window on where they are in their contract and their opportunities to renew.

“We also use Key2Key as a communication tool between sites, sharing notes about the customers, vehicles they are potentially interested in, or if they have a life change that necessitates changing their car. Everybody who has access to Key2Key understands that customer.

“Many customers now know us by name and the conversations are very pleasant and friendly because they trust us to have their interests at heart. Even people who are a little wary about why we are calling them at first are happy with the contact when they understand what is happening. We have even started to receive inbound calls, now that customers know us, asking when they can have a chat about their renewal.”

This case study was first published in Auto Retail Profit.

More advice from Chrysalis Loyalty on how to implement a transformational customer renewal strategy is available in the recently published white paper ‘How to create loyal customers and drive real growth in sales and profitability: A Chrysalis Loyalty guide to best practice for automotive brands, funders and retailers’. The white paper can be downloaded, free, from www.chrysalisloyalty.com/white-paper/

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Chrysalis Loyalty expansion continues with two new key appointments

EXPANSION continues at international finance retention specialists Chrysalis Loyalty, with two key appointments in sales and customer training.

Stephanie Falconer joins the business as UK Account Director and Lyn Howdon has been appointed to head Chrysalis’s Global Academy.

They are the latest in a series of major appointments this year signalling the company’s ambition to be the recognised world leader in motor finance retention.

Independently owned and UK-based Chrysalis Loyalty currently operates in 12 countries, helping more than 2,500 motor retailers maximise repeat sales by optimising customer communication for dealers, brands and finance providers.

Chrysalis focuses heavily on helping its customers implement customer loyalty programmes through technical and soft skills training to optimise the power of its Key2Key system for users. Lyn Howdon, who most recently led the  UK Academy for leading automotive video services provider CitNOW, will now draw on her 28 year automotive track record to head this function for Chrysalis.

Lyn is one of the pioneers of automotive customer loyalty strategy, having previously developed retention programmes for US-based Half A Car which were successfully implemented across 600 dealerships in the UK, Europe and Australasia.

She went on to lead dealer training for Kia Motors internationally, building the brand’s Worldwide Sales and Service Academy covering 163 countries across five regions.

Her other roles have included running her own successful business focused on training and consultancy to improve customer loyalty and implementing dealer and manufacturer retention programmes globally for Loyalty Logistix.

Stephanie Falconer’s automotive career spans a Who’s Who of leading data and decision-support providers, including CAP-HPI, EurotaxGlass’s and Jato Dynamics. A specialist in software and consultative services, Stephanie has strong relationships with vehicle manufacturers, retailers and finance and intermediary system providers across Europe and the UK. She joins the business from Cox Automotive where she has worked across business divisions serving financing, re-marketing, software solutions, media and insight.

Chrysalis Loyalty founder and CEO Jolyon Barker said: “Stephanie and Lyn are leaders in their respective fields and a perfect fit for Chrysalis as we drive the business toward our ambition of being the recognised world leaders in automotive customer retention.

“Our success to date has stemmed from understanding the challenges and needs of our customer, helping them to implement world class customer loyalty systems and then run them as effectively as possible. The skills they bring – and their commitment to understanding and properly serving the needs and interests of customers – will be invaluable as Chrysalis transforms the customer retention landscape in the UK and beyond.”

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Chrysalis Loyalty steps up integration with best-of-breed 3rd party systems through its open API

A DRIVE to integrate more 3rd party systems with the open API of Chrysalis Loyalty’s Key2Key customer retention system has been announced.

Chrysalis says the move will enable its dealer and captive finance customers to dramatically boost the quality and impact of their customer loyalty programmes.

The Key2Key API has always been ‘open’ for integration with best-of-breed 3rd party system providers operating in the field of customer loyalty.

Photo by rawpixel on Unsplash

But fresh technological developments around the industry are opening up new possibilities which Chrysalis say they are determined to enable as quickly and easily as possible.

Chrysalis founder, Jolyon Barker, said: “No matter how well designed and comprehensive, it is unrealistic to expect one system alone to best-of-breed in every aspect of the increasingly sophisticated processes used in automotive retail.

“That is why the right thing for us to do for our customers is to encourage the best 3rd party providers to integrate through our open API by being as accommodating and supportive as possible.”

As an example, Jolyon Barker points to a project under way in Europe in which an enterprise email marketing system is being integrated with the Key2Key platform to increase transparency for dealers and their brand’s captive finance arm around customer communications.

The integration will eradicate poorly timed or inappropriate communications by ensuring dealer, brand and finance provider effortless transparency as well as instant analysis of the effectiveness of their customer contact.

In a recent white paper detailing customer retention best practice Chrysalis Loyalty highlighted the importance of ‘joined up’ data and communication between dealers and their brands in generating the highest possible sales renewal rates – and proving the best customer experience.

Chrysalis believes that its users are best served by enabling integration of best of breed 3rd party systems to its market-leading customer retention tool.

For example, by integrating two-way data sharing between Key2Key, which highlights the optimal moments to contact a customer for renewal, and a sophisticated call tracking and conversation sentiment analysis tool, users get the benefits of both systems – and additional benefits from combining data to leverage powerful insights that can help transform their performance.

Jolyon Barker said: “Businesses like our own can choose between insisting on developing proprietary solutions to every improvement in their service, or they can do what’s right and work with the best to create maximum value for their customers.

“Because information sharing is so vital to profitable and efficient operations in automotive retail it is wrong to force users to develop their own workarounds when the integration of data between tools can make each one exponentially more valuable.

“Our latest integrations will start eradicating timed or pitched customer communications by creating unprecedented transparency and insight. Our customers will see results within a very short timeframe because we have encouraged the integration of a best-in-class tool through our API.”

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New motor finance retention study reveals big opportunities for funders and dealers

DRAMATIC increases in customer retention are within reach for most funders, even in a falling market, according to new research.

A unique study of current practices among dealers representing 17 automotive finance brands, conducted by loyalty and retention specialists Chrysalis Loyalty, has revealed that big gains are available through optimising customer contact strategy.

Dealers confidentially shared facts and figures to reveal their ratio of cars sold per customer contacted, along with descriptions of their approach to customer relationship and renewal management.

While the most successful dealers achieve one new sale for every 1.4 customers contacted many more are reporting only one sale for every 10 customers contacted and even, in a significant minority of cases, one in 20.

But outside of the highest and lowest performance figures, the key finding by Chrysalis is the consistently high performance of dealers who focus in the most structured way on customer loyalty. Measured over an 18 month period, the global average among 2,500 dealers across all the countries in which Chrysalis operates was one sale for every 2.8 customers contacted.

This average was achieved regardless of a country’s position in the automotive economic cycle, including performance in markets which were falling or static overall.

The key finding of the latest research was that renewal rates in dealerships which run a dedicated customer contact strategy are far higher than in those which approach the issue on an ad hoc basis – for example, when instructed to by a brand or finance provider.

Major factors in the success of the contact strategies of the most successful dealers were a clearly defined approach, disciplined implementation, careful integration with existing CRM approaches and a strong focus on individual skills for staff focused on customer renewals.

As new car sales in Britain fall for the second year running, Chrysalis says their findings are good news for the majority of dealers who still have room for improvement in their customer retention processes – and offer the chance of transformational growth for those who have not yet implemented one.

The other major finding in the latest Chrysalis research is that even for dealers with a defined process for renewals, contact is too often limited to one moment in a customer’s journey through a contract. Evidence shows that a more rigorous approach – beginning the moment a customer is first qualified – consistently results in more renewals.

“This is all good news for most funders and dealers because it demonstrates that many of the new customers they need are already hiding in plain sight,” said Mark Fretwell, of Chrysalis Loyalty.

“We have been able to establish a clear link between the lowest renewal rates and a lack of process for some dealers, who often report that their customer contact strategy relies entirely on being instructed to mount a campaign by their brand or finance provider.

“But even when we drill down into the approaches of dealers with a more structured process we see big opportunities for increasing sales to existing customers – backed by real evidence of what works.

“Despite the industry’s reliance on data analysis for many operations there is still a lack of focus on the most effective change points. As an example, we know from analysis that many customers will renew well before they reach a point in their contract where the cost to change may be zero, or when they pass the point of owing less finance than their car is worth. And yet many funders and dealers with a defined retention strategy limit their customer contact to one of those points.

“In contrast, the evidence shows that maintaining a consistent contact strategy throughout the life of a customer’s finance agreement is what maximises renewals.

“Increasing retention is a vital part of business growth and it is striking to see how opportunities to do that are still wide open across the automotive financial services sector.”

Chrysalis Loyalty has made a white paper detailing this latest research as well as best practice advice – backed by case studies – and tips for implementing an effective customer loyalty programme freely available to funders and dealers. 

Download your copy here