In the dynamic landscape of the automotive industry, a focus on nurturing customer loyalty is pivotal for sustained and sustainable brand growth. As Original Equipment Manufacturers (OEMs) and Dealer Groups navigate the complex world of customer engagement and retention, many are turning to outsourcing as a strategic and cost-effective solution. In this blog post, we'll explore the key benefits of outsourcing loyalty programmes and the considerations that make it a compelling choice for automotive finance companies.
A first key advantage of outsourcing is the opportunity to tap into specialist knowledge and expertise of consultants that is not usually available internally. The external partners bring a deep understanding of effective customer engagement and retention strategies, in addition to a fresh perspective on your business.
It’s natural that we develop an understanding of our own business which is a result of our local environment. Due to time constraints, this can be all-consuming and our tendency is to not look outside our own space for new ideas and initiatives. This can be very limiting as well as stagnating your market.
Stephen Hebditch - ddx Mobility Senior Expert
“A customer is a customer, with similar basic requirements wherever they live in the world. I have always found that gaining knowledge and perspective from other markets is crucial to developing the retention performance in my own market. An external specialist has all this knowledge and specialisation to hand and can share it with you. By understanding your market, they introduce insights and ideas that will immediately have impact in your own market.
“Leveraging external expertise from specialists allows OEMs and dealers to access and benefit from proven methods and best practices sourced from the entire automotive industry and beyond.”
Outsourcing loyalty programmes can also create a compelling financial advantage. Developing and maintaining in-house loyalty systems and training programmes is resource and budget intensive. In contrast, outsourcing provides a cost-effective alternative, particularly when partnering with providers already equipped with established platforms, training packages and streamlined processes.
Stephen Hebditch: “Outsourcing has always provided me with immediate expertise and additional resources in my quest to increase customer retention. One of the major impacts is in cost savings and time to go-live. Outsourcing means that you become the customer and can define your own budget and delivery time parameters, something that is difficult to replicate internally.
“As an example, when I was leading on customer retention solutions for BMW in the UK, I identified an immediate requirement for, not just an equity calculation system, but a system that identified customers when they reached their “key-for-key” point - when they could move into a new car for an identical monthly payment.
“Outsourcing this initiative ensured a quick development, testing, and launch period of just six months, and also established a valuable partnership with an external provider who would maintain and incrementally develop the system as the market changed over time. I saved both time and money, as well as freeing up the internal resources to focus on other areas that could not be outsourced.”
Working with an external partner for customer loyalty enables OEMs to maximise their allocation of resources and budget. These cost savings can then be redirected towards other areas, allowing for a more focused and efficient overall business strategy.
Outsourcing loyalty activities allows OEMs to concentrate on their core competencies and business objectives. By delegating the task to external experts, companies can direct their energy and resources towards areas where they excel.
This strategic focus on core competencies not only enhances overall operational efficiency but also enables OEMs to be more agile and responsive to changing market demands.
Stephen Hebditch: “Customer loyalty is such a broad topic, which touches on every aspect of the customer journey as well as being impacted by production, external influences, tactical support, business strategy and other factors.
“For me, this meant time constraints always dictated the areas I could concentrate on. Engaging with an external partner meant I could therefore concentrate on the areas I was particularly knowledgeable in, allowing the outsourced experts to bring impact and value in other essential areas.”
Scalability is a crucial factor for success in a rapidly changing automotive industry. Outsourcing customer loyalty activities provides a flexible solution that can adapt to the changing needs of your business. This scalability becomes particularly valuable during periods of growth or market fluctuations, allowing companies to adjust the scale of their loyalty programmes in response to shifting demands.
Stephen Hebditch: “There are many solutions in the marketplace and by leveraging the scalability an external expert has access to, you immediately open up access to systems and programmes that would otherwise be unaffordable. My own experience was around a bespoke reporting suite that would otherwise have remained inaccessible to me in terms of both budget and internal resources.”
Scalable solutions enable OEMs to stay agile in a dynamic market environment. Whether expanding operations or fine-tuning loyalty initiatives, outsourcing facilitates any necessary adjustments with minimal disruption to ongoing business activities.
Staying at the forefront of technological advancements is imperative in the automotive finance sector, where new competitors enter the market with a high frequency. Outsourcing loyalty activities gives companies access to cutting-edge technologies, analytics tools, and data management systems that may not be readily available in-house.
Stephen Hebditch: “I used to spend a lot of time each month manually producing reports on Excel spreadsheets. I knew an automated reporting suite would not only save me time but also provide greater insights and steering for the business. I therefore engaged an outside provider to design and deliver an automated reporting suite bespoke to my own requirements.
“The result was a step change in terms of engagement and performance within the retention topic. Reports were immediately available at the beginning of each month. The presentation of the data was engaging for all users, and the additional insights developed the topic to the next level.
“The initiative saved me time and money and delivered an immediate impact which could not have been delivered internally due to resourcing and a lack of expertise.”
Loyalty programme outsourcing providers invest in state-of-the-art solutions to optimise the effectiveness of their programmes. Automotive finance companies can leverage these advanced tools to gain deeper insights into customer behaviour, refine engagement strategies, and ultimately enhance the overall impact of their loyalty initiatives and customer retention.
The automotive industry operates on a global scale, with diverse customer bases spanning regions and cultures. Collaborating with providers who understand the intricacies of different markets ensures that loyalty initiatives resonate with a broad and diverse audience. This global reach strengthens customer loyalty initiatives as well as overall brand value.
Stephen Hebditch: “I tapped into this knowledge base whilst I was setting up retention call centres. Although compliance regulations may differ from market to market, expertise in terms of the range of dialling systems available, scripts, KPIs, processes, call ethos, as well as the overall culture of the call centre are transferable. An external expert with widespread knowledge can bring real value to a new or existing operation and save you time and money in terms of efficiency and impact.”
As customer data protection and privacy become increasingly paramount, outsourcing loyalty activities to reputable partners offers a robust solution. Established outsourcing providers employ stringent data security measures, safeguarding customer information from unauthorised access or breaches.
Moreover, these providers are well-versed in compliance with relevant regulations, ensuring that loyalty programmes are in line with local legal requirements and customer preferences.
Stephen Hebditch: “Both data security and compliance are a prerequisite for any major brand to build and establish trust with their customers. However, legislation and official guidance in these areas are constantly being updated within markets, and penalties for indiscretions and lapses are becoming heavier and heavier.
“From my own experience, call centres are a key focus for governing bodies to demand the highest standards for both data protection and compliance. Customer preferences must always be respected, and robust scripts and call monitoring are pivotal in terms of the correct wording, establishing the identity of the customer upfront, and identifying the products you are able to offer or even mention.
“It sounds daunting, however, with expert help and support, both these areas can be a positive in terms of creating brand awareness regarding trust and fairness with customers.”
Innovation is a driving force in the automotive industry, and outsourcing loyalty activities can introduce companies to innovative and proven loyalty strategies. External providers bring thought leadership, fresh perspectives and creative solutions that may not have been considered internally.
Stephen Hebditch: “Often, during the day, my challenge was to find enough time for innovative or strategic thinking. This is such a vital part of the customer loyalty topic, but one that often gets knocked back due to lack of time.
“An external expert can gather and deliver the thought leadership and innovative guidance and recommendations you require as background, enabling you to quickly decide on the strategic options that best fit your market.”
The infusion of innovative strategies enhances the effectiveness of loyalty programmes, making them more appealing to customers and setting OEMs apart from their competitors. By embracing new approaches, companies can stay ahead of market trends and continuously elevate their customer engagement initiatives.
Outsourcing loyalty activities emerges as a strategic move with multifaceted benefits. From tapping into specialised expertise and achieving cost savings, to prioritising data security and embracing scalable solutions, the advantages are substantial.
By carefully considering these benefits, OEMs can navigate the complex landscape of customer loyalty with agility, efficiency, and innovation, leading to sustainable success in an ever-evolving industry. Selling more cars, more profitably, whilst increasing customer satisfaction.
About Stephen Hebditch - ddx Mobility Senior Expert
Stephen is globally recognized for his expertise in the automotive industry and is an authority on customer retention. His journey has taken him through leadership roles at Porsche Finance, Rover Finance, BMW Group Head Office as Head of Customer Retention and Keyloop / FISC. He is currently leading the customer retention program at ddx and working as senior automotive expert on various client projects.