Service Data Guides Sullivan Tire’s Direct Mail Efforts
Marketers who don't get enough information from recency, frequency and monetary (RFM) analysis can consider adding a fourth metric to their calculations: Tire tread measurements.
Granted, this metric will only yield useful data for a limited number of companies. But Sullivan Tire Co. Inc. is one such company, and when tires on a customer's car are worn down to depths 3/32nds of an inch or so, its individualized direct mail efforts hit the ground running. During 2011, Sullivan Tire will expand the mail program fueled by this and other service data, sending out 500,000 pieces, according to database manager Mike Panarelli.
"Once we get a few visits we can do predictive modeling and determine when they'll be in the market for new tires," Panarelli says.
Panarelli adds its transaction information from its 53 New England service locations to risk score and loyalty rank analysis done for it by predictive analytics firm Loyalty Builders, crunching Sullivan Tire's customers into six buckets, based on their likelihood to attrite or advocate.
With this information in hand, Panarelli sends out customized mail offers. Pieces feature photos of branch managers from the location frequented by the customer and a variety of offers based on anticipated needs, with price points adjusted based on their risk or loyalty rank.
The Sullivan Tire database also flags changes in regular customer maintenance patterns, and allows Panarelli to send out messages before a driver defects to another supplier. Since Sullivan Tire began working with Loyalty Builders, its file of underperforming and one-time buyers has decreased, and it has built up its list of those it considers loyal, primarily through relevant cross-promotions and timely service reminders.
Furthermore, customers receiving these messages purchase an average of two more items per visit, compared to year-ago levels.
Having Panarelli coordinate mailings across the enterprise helps Sullivan Tire maintain a holistic, customer-centric approach, as opposed to using product-centric tactics. "Who gets a postcard, and what offers are featured, is not determined by an individual store," notes Loyalty Builders CEO Mark Klein. "If Sullivan Tire is doing a mailing to underperformers, in one store five customers may get a postcard, and in another five miles down the road 200 may get a postcard."
Sometimes the data indicate the most appropriate action is no action. "Customers have been telling us what they wanted all along," Panarelli says. "By being able to see their behavior, we are able to listen to them. If a customer comes in for an oil change every four months [instead of the manufacturer's recommended three], we will solicit them every four for an oil change."
Panarelli eschews spray and pray methods, in which buckets of customers are offered oil changes every three months based on their last visit, as not being as productive as those based on demonstrated preferences.
Unproductive pieces doesn't seem to be an issue. Loyalty Builders' analysis isolates one-time buyers with a higher propensity of becoming repeat customers. By focusing mail pieces on these customers, Sullivan Tire has boosted conversion of one-time buyers into repeat customers at a rate 67% higher than that of a control group.
