Presented by DriverSide in partnership with R. L. Polk & Co., this white paper "Service Marketing: New Solutions for New Challenges," discussed: * The latest research findings on the challenges facing service marketing. * Simple and effective marketing solutions that can help you overcome these challenges. * How advances in data mining and incentive optimizations can increase your sales. This study is authored by Kevin Root, VP of Product Strategy at DriverSide, a frequent keynote speaker on automotive eCommerce and service performance improvement.

1. Service Marketing 2010:
New Solutions for
New Challenges
Kevin Root, DriverSide
December 15, 2009

2. Agenda
Service Marketing
• The Situation
• The Challenge
• The Solution

3. The Situation

4. Market Factors Impacting Service Revenues
Growth: Vehicles >10 yrs. old Consumers Keeping Cars Longer
Average length of ownership (number of months)
Average Age of U.S.
Light Vehicles

5. Service Retention Declines As Vehicle Ages
Source: R. L. Polk & Co. / AAIA Fact Book

6. The Challenge

7. Consumer Service Spend is Changing
Where the Service Dollars are Spent Today:
Other , 19%
Dealership
Service Dept
44%
Indpependant
Repair Shop,
37%
Source: NPD Research May 2009

8. Consumer Service Spend is Changing
Where the Service Dollars are Spent Today:
Other 19%
Dealership
Service Dept
44%
Independent
Repair Shop
37%
…but independent
repair shop business is
37% and growing
Source: NPD Research May 2009

9. Attack From All Sides - Example: Orphan Owners
Where service customers go when their new vehicle dealership closes…
Somewhere Else
DIY 3%
10%
Unsure
Where 12%
Dealership Service
Departments 51%
Independent Auto
Service Center
24%
Source: NPD Research May 2009

10. Consumer Perception Research:
660 Consumers
Perception of:
Dealership Service Departments
National Light Repair Centers
Locally Owned Independents
Source: DriverSide/Kelton Research October 2009

11. Consumer Perception: Highest Quality Repair
If price were equal, which of the following types of service
providers do you think would provide the highest quality of
repair? Light Repair
Center 14%
Locally-Owned
New Car Repair Center
Service 46%
Department
40%
Source: DriverSide/Kelton Research October 2009

12. Consumer Perception: Best Value
Which of the following types of service providers do you
think would provide the best value for your money?
Light Repair
Center 23%
Locally-
Owned
New Car Repair
Service Center 53%
Department
24%
Source: DriverSide/Kelton Research October 2009

13. Consumer Perception: Overcharging
Which of the following types of service providers do you
think would be most likely to overcharge you for the
work done?
Locally-
Light Repair Owned Repair
Center 18% Center 16%
New Car
Service
Department
66%
Source: DriverSide/Kelton Research October 2009

14. Reality Research:
230 Mystery Shop Calls to:
•Dealership Service Departments
•Light Repair Centers
•Locally Owned Independents
2 Basic Repairs / 2 Typical Cars
- R&R new Radiator
- R&R new Front Rotors & Pads
Compared time to MRRT
Source: DriverSide/Sorgenfrei Research September 2009

15. Reality:
When compared to published standard
time tables reflecting Manufacturers’
Recommended Repair Time:
71% of repair facilities over-
quoted the repair time on Accurate 4%
average
Under Quoted
25%
Over Quoted
71%
Source: DriverSide/Sorgenfrei Research September 2009

16. The Newest Challenge…

17. Social Media: Service Reviews

18. The Power of Consumer Influence & Role of Social Media
• 74% of consumers choose companies and brands based on what others say online
about their customer service experiences.
(Society for New Communications Research, May 2008)
• 86% of consumers read online business reviews before making purchase decisions;
90% of whom say they trust these reviews
(Kudzu.com survey of 600 users, December 2008)
• Nearly 49% of shoppers have made a purchase based on a recommendation
through a social media property
(Razorfish, October 2008)
• Almost half of US online adults read ratings and reviews at least once a month and
19% post them. Nearly twice as many read reviews compared with 2007.
(The Growth Of Social Technology Adoption, Forrester, October 2008)

19. Will Ratings & Reviews Impact Service Business?

20. It Impacts New Car Sales….

21. The Solution

22. To build a ***meaningful*** relationship with the customer

23. Consumer Perception: Ongoing Relationships
Question:
Which of the following types of service
providers do you think would be most
likely to try to develop an ongoing
relationship with you?
Light Repair
Center 13%
New Car
Service Locally-Owned
Department Repair Center
26% 61%
Source: DriverSide/Kelton Research October 2009

24. Consumers Reality:
• Service Reminder Post Cards?
• Generic Coupons & Flyers?
• Simple “Time Based” Mailings?

25. Relationship Building:
The three success drivers of new service marketing:
Relevancy
Reputation Results

26. Relevancy Drives Retention Relevancy
Foundation for Relevancy: Reputation Results
– The medium
– The message
– The incentive
– The consumer/prospect profile

27. Delivering Relevancy

28. Relevant Information = Consumer Value
• 500+ Articles
• 50+ Videos
• “Ask A Mechanic”
• Diagnose A Problem
• Community
• Ratings & Reviews
• Dealer Branded,
Customized +
Service Incentive
Optimization

29. For Smart Marketing – Go Beyond RO Mining
RO
Records/
Values Sales
History
Customer DIY/DIFM
& Rating
Prospect
Profile
Lifestyle
Profile
Social
Network
Profile

30. For Smart Marketing – Go Beyond RO Mining
Advanced profiling – connect this to service data
Key Influencers
Source: Rapleaf

31. For Smart Marketing – Go Beyond RO Mining
RO
Records/
Media Values Sales
Response History
History
Incentive Customer DIY/DIFM
Response & Rating
History Prospect
Profile
Customer
Value Lifestyle
Score Profile
Social
Network
Profile

32. Delivering Service Marketing Relevancy
• Use an automated service – “set it and forget it”
• Includes service records analysis
– Mined for key profile info including: loyalty indicators -
increasing/decreasing engagement, etc.
• Delivers Intelligent Marketing Campaigns
– Optimized service incentives based on frequency of visit,
declined maintenance and response history
– Delivers service prospect marketing based on advanced
target profiling

33. …But does it work?

34. Relevancy
Dealer Results:
• Higher Service Frequency: Reputation Results
27% increase in annual service frequency
(from 1.54 to 1.96 service visits per
customer)
• Increased Service Revenue:
$107 increase in annual service revenue per
customer
• Lost Customers :
22% of service revenue contributed from
recaptured “lost” customers

35. And What about Reputation?

36. Reputation Management: Relevancy
The newest trend in service marketing
Reputation Results

37. Transparency is Rewarded Relevancy
Your Reputation becomes your brand…
Reputation Results
… and your best
new media
marketing tool

38. Summary of Key Points
• Service customer base under attack from all fronts
- including consumer perception.
• Social media rewards transparency in service dept.
• Focus on Relevancy, Reputation and Results.
• Mine data more aggressively, go beyond RO’s
- think predictively.
• Optimized service marketing delivers impressive, measureable
results – for service and new car departments.

39. Thank You.
kroot@driverside.com
To learn more about DriverSide’s service marketing solutions,
please visit: driverside.com/sales