ŠKODA UK Uses PolkConnect™ to Build Aftersales Loyalty and Profitability
This European auto market leader is helping a group of retailers grow market share by achieving a response rate of 27% (well above manufacturer’s average), earn £1.9 million in revenue over 9 months, surpass their annual projections by £0.5 million+ and realize a 14:1 return on marketing investment.
Improve aftersales customer retention, market penetration and sales
Automotive, driven by Polk – IHS Markit PolkConnect™, an integrated marketing and measurement solution
- Enabled pioneer group of retailers to:
- Achieve a reported response rate of 27%, well above manufacturer's average
- Earn £1.9 million in revenue over 9 months, surpass annual projection by £0.5 million+
- Realize a 14:1 return on marketing investment
- Uplift response 239% due to targeted offers
- Increase revenue – 219% higher when the IHS Markit solution was in place
ŠKODA UK Builds Loyalty and Profitability
ŠKODA UK, a Volkswagen Group UK brand, has an aggressive goal to increase market share by 2015 and build sales beyond the brand's current loyal and satisfied customer base. As a result, the retailer network will see additional opportunity for parts and labor sales, but will also face increased pressure to have the processes in place to successfully market to customers. As it prepares for future growth, ŠKODA UK saw the need for a consistent strategy to attract and retain aftersales customers, but lacked the internal resources to focus on this critical goal.
In his role as Aftersales Development Manager for ŠKODA UK, David Dickens is charged with creating, delivering and implementing aftersales initiatives to make the retailer network more pro?table and efficient. In light of the brand's growth aspirations and difficult market conditions, he understood that retailers needed a more intuitive and consistent method of marketing aftersales events to help them meet the brand's goals. He saw an opportunity to provide retailers with the tools to help them increase parts and labor revenue, leading to improved customer loyalty and market penetration.
Integrated Marketing and Measurement Solution
David watched closely when Volkswagen UK and Audi UK implemented IHS Markit PolkConnect™ and was impressed by the results. So, he decided to implement this comprehensive aftersales CRM and performance management solution with a group of 15 ŠKODA UK retailers. This 'pioneer group' of retailers began with two related components of IHS Markit PolkConnect.
Predictive Marketing automates the process of scheduling service and repair-related marketing activities to targeted customers and tracks the success of the marketing efforts. The Key Performance Indicators (KPIs) module provides consistent metrics to measure and analyze a retailer's overall aftersales performance, an important step in helping the retailer surpass the brand's aftersales objectives.
More recently, ŠKODA UK rolled out a third IHS Markit PolkConnect module, Service Marketing, which allows retailers to identify customer opportunities within their Areas of In?uence and establish targeted tactical marketing campaigns for speci?c job types or lapsed customers. In addition, further investment was made to add predictive marketing events covering non-franchise vehicles and service plans.
Predictive Marketing: Sophisticated Targeting
The predictive marketing component of IHS Markit PolkConnect gives ŠKODA UK an automated and consistent way of targeting service offers to customers at an appropriate time when they are most likely to respond. This sophisticated system develops individual customer driving pro?les to predict when particular service, government- mandated and duty of care (maintenance work required to keep vehicle safe and roadworthy) events are due based on mileage, driving patterns, model-speci?c data and other criteria gathered from previous service visits. Based on this data, IHS Markit PolkConnect automatically generates a weekly contact list of customers who should be in-market for particular events, such as cambelt timing replacements, brake ?uid changes and MoT inspections (mandated by the Ministry of Transport). The intuitive nature of the tool supports better resource utilization and helps retailers 'work smarter, not harder.'
IHS Markit PolkConnect™ saves valuable time by turning the planning and execution of aftersales marketing campaigns into a simple process, with key performance metrics to measure success. IHS Markit PolkConnect also gives manufacturers an independent view of how the entire retail network is performing.
Recognizing that multiple points of contact are often most e?ective, predictive marketing utilizes a two-wave communication approach to encourage customers to visit the retailer. Targeted customers are ?rst contacted by either direct mail or phone. Those who don't respond receive a follow up phone call. As ŠKODA UK is planning to contact customers via email, SMS or other communication channels, IHS Markit PolkConnect will provide the ?exibility to support them.
Going well beyond the capabilities of a DMS system, IHS Markit PolkConnect gives retailers consistent tools to monitor the effectiveness of aftersales marketing activities through online metrics that include the number of customer contacts, the average response rate, average invoice value and the return on marketing spend. Corporate personnel at ŠKODA UK can view aggregate and individual retailer results, enabling them to track and trend performance, identify opportunities for improvement and share best practice across the retail network.
Key Performance Indicators: Consistent Measurement Tool
The Key Performance Indicators (KPI) module complements predictive marketing and provides a broader view of workshop performance.
The KPIs assess overall performance through aftersales metrics that include the average number of customer visits, average customer invoice value and total retail sales, broken down by parts and labor and by speci?c service activities. They also show performance by vehicle age to monitor success in retaining customers beyond the warranty period.
David Dickens and his team make use of the KPIs to understand market potential and to identify high- and low-performing retailers with the ultimate goal of providing coaching and improvement plans at the
retailer level. They can review results at both a 'drill down' level for in-depth analysis and on aggregate to compare performance across the retail network.
Strong Showing for Pioneer Group of Retailers
Based on the positive results from the pioneer group of 15 retailers, ŠKODA UK are currently rolling out IHS Markit PolkConnect™ across the retail network. This decision was based on results from October 2010 to June 2011 (the pioneer phase of IHS Markit PolkConnect), which include:
- High response rate: Pioneer group retailers reported a 27 percent response rate, well above the 18 percent average for Volkswagen Group (Volkswagen Passenger Cars and Commercial Vehicles, Audi UK).
- Strong revenue: Pioneer group retailers realized £1.9 million in nine months, surpassing the annualized revenue projection by more than £0.5 million.
- Excellent return on marketing spend: The initial group of retailers saw a 14:1 return on their marketing investment.
Incremental Uplift from Predictive Marketing for Pioneer Group of Retailers
- High response rate: On average, ŠKODA UK retailers saw an uplift of 239 percent in the response rate due to the targeted IHS Markit PolkConnect offers
- Uplift in revenue: Across the pioneer group of retailers, revenue was 219 percent higher while IHS Markit PolkConnect was in place than during the preprogramming time period used as a point of comparison.
- Success for speci?c retailers: Sherlodge Škoda (a pioneer group retailer that had their own comprehensive reminder program prior to predictive marketing) still achieved an uplift of 152 percent in response rate and 128 percent revenue growth.