Auto Retail Stakes on Customer Loyalty

It is business diversification and focus on maintaining customer loyalty by means of customer service and reassignment of marketing budgets from outdoor advertising to loyalty program development.

While earlier the majority of profit was accounted for by new car sales, amid economic difficulties it was the used car and after-sales service market that saw vigorous growth. Those that could not accommodate quickly were forced to leave the market. During 2008-2009, the auto retail market saw 30% dealerships close in Russia including: Mashinniy Dvor, Fast Motor, Auto Land, Elex-Polus etc.

Nowadays every dealership has its own loyalty program focused on its customer base. Their bases abound with various data because car purchase, sale and service presuppose provision of a mass of personal data, and the deal value suggests financial income of the customer. All this data is used to retain customers and promote new sales.


Car dealerships make use of a vast variety of marketing tools depending on their objective: newcar sales usually require that merchandise is shown to the best advantage – billboards and plasma panels, video commercials on the Internet and in mobile advertising. Similarly, after-sales services are usually promoted via outdoor and mass media advertising. In their direct communication with existing customers, dealerships promote their services by means of loyalty programs. And the key tools here are call-centers and bulk SMS. According to the market average estimate, the level of marketing expertise in bulk SMS messaging is very high. Car dealers have always had access to personal customer data and have accumulated extensive experience of communicating via SMS messages.


An effective and natural way of collecting a legal database for promotion of a dealership’s goods and services is obtaining consent to notification by incorporating the corresponding clause into the Contract. Prospect customer data may be obtained directly from the dealership visitors through consultants or special stands. A form on the web-site with a good motivator also yields results. Existing and prospect customers are very interested in prompt notification during their preparation or search for a good bargain.


According to the law, subscribers have to confirm their consent to receive bulk SMS with certain information. Such consent to bulk SMS must clearly identify the person (full name, birthdate, signature, phone number, e-mail). Confirmation of consent is considered to be filled-in questionnaires which should be stored indefinitely as web-site logs, electronic copies or paper documents. Another way of consent confirmation may be a customer phone call recording. Where consents are obtained via SMS (e.g. by sending messages to a short number), they can be arranged to be stored with the SMS messaging service provider. If consents are obtained without regard of legal norms or the database is several years old, it can be legalized using the Database Update service.


Car dealers make use of various types of bulk messaging: advertising messages with special offers and new arrivals and service messages supporting different service stages.


Service messages serve to build customer loyalty to the dealership. Inthisarea, negativeimpressionsspreadveryquicklywhilepositivecommentscustomersusuallykeeptothemselves. That is why an excellent way of collecting customers’ feedback is by receiving messages to a short number. If a customer is dissatisfied with the service provided, there is always a chance to promptly follow up on the situation and curb the spread of negative comments. By receiving messages to a dealership-assigned short number it becomes possible to send customers notifications on the prices and merchandise availability and receive test-drive requests. SMS messaging may support various service stages: start and finish of works, automobile readiness etc.


The use of customer data obtained by car dealerships at deal making allows for organizing maximum effective promotion messaging. Knowing the automobile mileage, state and price band, one can create and test various customer-related hypotheses. Dealerships inform customers about all their paid services: arrival, auto pawnshop, maintenance and insurance. Great significance is attached to contact frequency and message copyright. While attitude to copyright may remarkably vary among companies and segments, all of them are consistent about the maximum possible contact frequency being 2 times in a month.