2016 ChannelNet Auto Finance Digital Experience Study: Insights and the Bottom-line

By Staff Writer on March 30, 2016
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More and more research is focusing on the importance of tapping into the customer lifecycle. Customer lifecycle management is a critical customer retention strategy.

At ChannelNet, we take an insight-driven approach to understanding the customer. We ask ourselves who the client’s customer is and ultimately what are they looking for at various points along the continuum — from attraction to awareness, discovery, cultivation, advocacy, purchase and retention.

Our personal microsites offer unique opportunities for managing the entire customer lifecycle in a way that can include information across disparate touch points — from the brand, the finance company and the dealer. (Personal microsites are also referred to as personal URLs, for example: JaneDoe.brandsite.com.)

To see how much of a difference our approach makes, we compared the results of 10 of our automotive finance clients to industry benchmarks.

The data

Statistics are based on customer lifecycle management programs such as welcome, mid-engagement, warranty, end of contract and win-back marketing campaigns. Messages were non-transactional in nature. We reviewed the data for 4 million email-marketing messages sent by 10 auto finance companies from February 2015 to February 2016. All of these auto finance companies use our patented omnichannel platform for content, personalization, and promotion optimization.

We identified industry benchmarks that we could use as a comparison. Silverpop’s “2015 Email Marketing Metrics Benchmark Study,” provided comparable data and categories. Silverpop’s survey examines messages sent by nearly 750 companies and 3,000 brands in 2014. We used Silverpop’s industry averages and top quartile percentages in the automotive and  financial services verticals as our benchmarks.

Read the data and charts; download ChannelNet 2016 Auto Finance Digital Experience Benchmarks.

What is different?

Most marketing campaigns use an email to drive traffic to a generic website.

In contrast, our client’s customers receive an email or text message, that drives them to a personal microsite. While email is used to drive the traffic, the personal microsite is what really drives the superior customer engagement metrics. Recipients are served personal data and content that speaks to the customer 1-to-1, as an individual. While the microsite contains product and service information, the content is customer-centric.

How did we do?

Unique Open Rates — all 10 lenders exceeded industry benchmarks

The unique open rate is the percentage of received email or text messages that were opened by one recipient. The industry average unique open rate is 22 to 24 percent and all 10 lenders did far better than average. In fact, eight of the 10 companies exceeded the top quartile (41 percent) to qualify as best-in-class.

Click-through-Rates (CTR) — all 10 auto finance lenders rate best-in-class

A CTR measures the number of unique recipients who clicked on a link in the message. On click-through rates, all 10 auto finance lenders were best in class significantly beating the benchmark top quartile (9 to 9.5 percent). Seven of the lenders were over 200 percent more effective in engaging customers.

Click-to-open Rates — all 10 auto finance lenders rate best-in-class

When it comes to digital engagement, it is important to look at the click-through rate (CTR) and the click-to-open rate (CTO). The CTO measures the number of unique recipients who clicked on a link in the message and viewed the content. The industry top quartile benchmarks ranged from 22 percent to 28 percent. The benchmark overall average is 8 to 12 percent. All 10 lenders significantly surpassed the benchmarks with CTOs ranging from a low of 27 percent to a high of 55 percent.

Opt-outs

The story on opt-outs is that there is nothing to report. Similar to the top quartile benchmark statistics, none of the lender’s email recipients asked to be removed from the email marketing lists.

Read the graphs and data, download ChannelNet 2016 Auto Finance Digital Experience Benchmarks.

Insights: What makes a best-in-class digital experience?

1. A customer-centric focus instead of a product-focused sales process increases engagement.

Across all 10 companies, the one common factor that boosts every lender’s click-to-open performance to the top quartile and beyond is the 2-step marketing combination of an email or text message partnered with a personal microsite.

Lenders achieving the highest click-to-open rates and the longest dwell times on the site (average visit is 4 minutes 37 seconds) are serving customers with personally relevant content about their vehicle, finances and dealer. They also provide educational information that relates to a customer’s final step in the vehicle lease journey. Their goal is to remove as much friction as possible from the lease-end process so customer has a great turn-in experience.

2. One of the keys to increasing customer engagement is coordinating the timing of the messages across the customer life cycle — consideration, purchase, use and retention. The better job a lender does with coordinating the message timing and content with the stage of the customer’s vehicle ownership, the better the open rates. Some lenders are realizing tremendous open rates of 60 percent or higher — 50 percent higher than the top quartile in the industry benchmark groups.

3. Companies that understand that no one organization or part of the sales channel owns the customer relationship score the highest. These lenders provide customers with access to vehicle, dealer, finance and consumer education information all in one place.

4. Emails can be customized by dealer, vehicle, contract duration, location, website behavior, status and many other factors. Sending an email with content specifically selected to meet the needs of the individual results in 29 percent higher unique open rates and 41 percent higher unique click rates. The more relevant a message is, the more likely it will be opened. Repeatedly sending the same content, even if it is personalized, greatly reduces the open rates.

5. Responsive design increases clicks-to-open. The data shows that mobile visits for auto lenders without a mobile optimized responsive design stagnates at about 30 percent. In contrast, best-in-class lenders are logging click-to-open rates of up to 55 percent. The data reveals that if a lender does not offer a responsive design, a high percentage of mobile users who click on a link do not read the content; 46 percent of mobile users immediately leave the website at the login screen compared to 16 percent of desktop users.

6. Lenders that require customers to log-in to access all content reduce their click-to-open rates. When access to content that is NOT personal and private is behind a firewall, the unnecessary login requirement diminishes engagement. Best-in-class lenders understand that not all data needs protection. With one click, a customer can see relevant information such as his or her vehicle lease miles, contract end-date or educational information on how to reduce lease-end turn-in fees.

The Bottom-line

The more you can personalize an individual appeal, the more engagement and retention increases. Lenders with the highest metrics (see accompanying charts) are experiencing engagement that is twice the industry average. Marketing experts calculate that a commitment to customer experience results in up to 25 percent more customer retention and revenue than other sales or marketing initiatives.

The lost opportunity to automakers, dealers and lenders is significant. For example, assume a lender has a current portfolio of 100,000 expiring leases and 16 percent of the leaseholders access their personal microsite. The lender will retain 15 percent of the people that visit the personal microsite. This equals a total profit of $2.9 million.

Studies affirm digital engagement significantly increases retention and revenue:

  • A commitment to a great customer experience results in up to 25 percent more customer retention and revenue than other sales or marketing initiatives. (Leading on the Edge of Chaos: The 10 Critical Elements for Success in Volatile Times)
  • 66 percent of consumers say personal offers and custom content influences their decision to purchase a product or service. (Forrester: The Contextual Marketing Imperative Oct 2015)
  • 26 percent lift in conversion rates is realized when real-time marketing is implemented. (The Real-Time Marketing Report, Monetate and Econsultancy)
  • 49 percent increase in transaction rates and 73 percent revenue per email is realized when a message is personal and relevant. (Experian 2015 Q1 Email Benchmark Report)
  • 62 percent of companies that provide mobile-friendly experiences increase their profits. (Econsultancy User Experience Survey Report 2013)

In Summary

Paula Tompkins, CEO and founder of ChannelNet, sums up how automotive companies are achieving record-breaking engagement and retention: “Highly successful digital sales and marketing mirrors personal relationships and requires two-way communications. This requires that automotive companies integrate the data across the silos (dealer, finance, OEM), collect and track customer reactions, learn from customer behaviors, and use the insights to trigger personal messages specific to each customer’s situation.”


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