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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/