A large motor manufacturer was concerned that compared to competitors their retention, particularly amongst non-fleet cars, was low. But how could it be raised and quickly?
By intensively analysing the existing data we were able to show that there were two ways that retention could be increased – the hard way and another way!
The hard way is straightforward – ensure that users are highly satisfied with their car and further ensure that the dealer network delivers high quality service.
However the investigation revealed an anomalous case that set the marketing detectives' pulse racing. The data identified a car manufacturer with very high retention but below average product and service satisfaction scores. How could this be? There must be another way that retention can be increased and we set out to determine what it was.
It turned out that the answer was finance. For those car owners who didn't buy their car outright the manufacturer offered a scheme whereby for relatively low monthly repayments the buyer bought half the car and then, at the end of the period they had to buy the other half - cash. This was not an attractive offer. However if they bought another car the scheme would roll over and no cash was required.
This insight came out of left field, finance wasn't even part of marketing's area of control and moreover it was handled by a completely separate division of the organisation. However the insight led to this different type of finance being adopted by our client.
Over the next two years the brand's retention rose from 42% to 55%. During this period a new model was introduced but it was estimated that half of the increase in retention was due to finance.