Subaru Revs Up Customer Value

Subaru gets strategic about lead management based on the value of prospects and customers.

Car buyers are educating themselves more than ever in the current economic climate. Chances are that a shopper has done plenty of research online at sites like Edmunds, Kelly Blue Book, or automaker sites before visiting a showroom. This makes for a savvy shopper, but it can also provide companies with great insight about prospects before they even step onto the lot. Subaru takes online lead generation seriously, and works with each of its 600 dealers to create a seamless experience across the customer lifecycle.

"People want to be smart customers," says DeLu Jackson, national manager of digital and direct marketing. "We want to make sure that the people who are raising their hand on the Internet are getting connected to a dealer. To satisfy consumers, you have to get them to the right dealer at the right time with the right message."

Visitors who register with an automaker site or request more information through a third-party expect to get a response, Jackson says. In the past Subaru would pass leads on to dealers based on geography, but never tracked what happened next. "There was no measurement, no tracking, no contact, and no follow-up" on Subaru's part to make sure the customer was taken care of, Jackson says. "It reflects the brand."

Working with Urban Science, Subaru created a lead management program that tracks Internet visitors who want further contact about a Subaru vehicle. The program scores them based on actions such as the number of auto sites visited, time on each site, what pages they visit, and if they are existing customers. Subaru then creates treatment strategies for different types of prospects. For example, if a lead is identified as someone with a high propensity to buy, Subaru will follow-up with custom communications about relevant vehicles and other messages based on that person's behavior. The lead will also be sent to the local dealer for personal follow-up based on a centralized process. If a person is considered to be a "fence-sitter," Subaru will send emails highlighting recent awards and pricing information to build awareness.

The biggest benefit of the program has been the collaboration with the dealers, Jackson says. More than 92 percent of the company's 600 dealers use the lead management tools, which provide customer analytics, intelligence, and tracking mechanisms. Field reps work with dealerships to train them on the tools and processes, which use standardized templates and scripts. The goal is a consistent customer experience at every dealer. "It melds the promise we made as a brand with the retail experience," Jackson says.

"There's engagement when you show [dealers] the CRM tools and the right process," Jackson says, adding that his team collects feedback from dealers, regions, and field staff on what works and doesn't.

Dealers can prioritize their prospecting activities, and Subaru can see on an individual dealer level where there is opportunity for improvement. The lead scoring model has an expected close rate, which is used to measure dealer performance. "We can diagnose what's happening at the retail level and work to improve the sales experience," Jackson says. He says that district sales managersand field training managers nowmake the close rate review a standardpart of every contact."Thishas ledto improved close rates, a high level of dealer participation in the program, and an overallresponse rate that went from well below industry average, toslightly above industry average in just over a year," he says. "We have also seen tremendous improvement in lead response times."

Existing customers are leads, too
Jackson says an important customer group identified in the lead management process is existing customers. "The assumption is that all leads generated online are new customers who are only interested in price," Jackson says. In reality, he says, 50 percent of the leads that come in are existing customers researching their next purchase. "If a dealer doesn't follow-up, it hurts the long-term relationship," he says.

By integrating lead data with current customer data, such as purchase history, satisfaction surveys, and service information, Subaru can apply customer value to a lead and create an even more relevant treatment strategy to build loyalty. For example, a customer who serviced a car at a dealer becomes a more valuable lead than the standalone online activity data may indicate because service is a high indicator of purchase intent. "We're establishing real customer lifetime value," Jackson says.

Next steps
Jackson says that the company is still collecting initial results and has yet to reveal any concrete ROI. But, anecdotally, he says both the manufacturer and the dealers are happy with the new program, which launched in July 2008. He points to the 92 percent participation as a measure of success. Next steps include refining the lead models and extending the process to more dealers and other areas. "We will continue to measure dealer engagement as well as close rates to gauge the effectiveness of the program," he says. "We are being more proactive at the company and dealer levels."