Zurich’s direct marketing program helps dealers capitalize on missed opportunities

Planning for continued growth and profitability for your operation doesn’t always come down to selling more cars. In a competitive market, continued success is not always a function of the number of vehicles sold.

“Selling more cars is great, but you can’t always do that,” said Galal Hamdy, National Account Specialist for Zurich North America. “It can be a challenging strategy to execute in a competitive climate. So we started thinking, ‘How do we help our dealer customers do more with what they already have?’ And what we found is the opportunity is huge!”

Capitalizing on Missed Opportunity  

There is tremendous opportunity to sell F&I products after the vehicle sale. A significant portion of people who purchase a new or used vehicle from a dealership do not leave with a Vehicle Service Contract (VSC) in hand, but once the customer leaves the dealership, it can be challenging to connect with them again. The dealer is best-suited to make the connection, however, the dealership team has other priorities and may not have time or resources to focus on F&I follow-up. Third parties may be brought in but may not necessarily offer a high-quality product, or the brand is not well known to customers. In addition, some manufacturers or competitors could try to capitalize on the F&I sale and compete directly with dealers for the business. Zurich’s innovative Direct Marketing program helps extend a dealer’s opportunity to sell VSCs beyond the finance office.

Zurich's complete solution  

After an extensive search to find the right program administrator, Zurich chose a direct-to-consumer company with a high-quality call center to provide a turnkey solution to sell F&I products to customers after the vehicle sale. “The program administrator is built to handle direct-to-consumer sales, allowing us to focus on driving the interaction,” Hamdy said, noting that Zurich takes a dealer’s customer data, including information on sales and service customers. “Our program administrator analyzes the data to exclude those who have already purchased a VSC, or those who do not qualify,” Hamdy said. 

“The customer receives a dealership-branded letter prompting them to call for more information, then the program administrator delivers a dealership-branded call experience. Marketing to people that have a need for protection, but who have no service contract means we’re getting the right message to the right person at the right time,” Hamdy explained, “In our experience, mailings drive about 1% response rate. Of the 1% that call, 20% will buy coverage. The success comes down to a highly effective marketing campaign using good data practices and a high-quality call center.”

THE DIRECT MARKETING PROGRAM DELIVERS HUGE BENEFITS TO THE DEALER

Zurich’s Direct Marketing program is available to Zurich dealer customers at no cost. Zurich offers the dealer a commission and contracts sold through the program are eligible for reinsurance. Zurich’s dealer customers drive revenue through these submissions, improving loyalty and retention; by keeping their name in the messaging, they deepen their relationship with the customer. Hamdy added, “We’re seeing our performance scale, regardless of dealer size or geography. We know this formula works. And we’ve seen a really cool effect that we weren’t expecting: A large number of customers are walking in to the dealership with the letter in hand. When the customer purchases at the dealership, the dealer keeps the entire sale at full commission! For some of our customers, we are seeing the same number of call center sales as we’re seeing walk in!” 

Zurich is committed to delivering innovative ideas and superior financial results for its dealer customers. The Zurich Advantage was developed as part of this commitment and includes income-generating programs that can impact more than the F&I office. When dealerships implement one or more of these programs, they can see real results – for example, 13 months of profit in 12 months – without relying on increasing PVR by one dollar or selling one more vehicle. The Direct Marketing program is just one of the many Zurich Advantage programs that help customers achieve 13 months of profit in 12 months.

The success comes down to a highly effective marketing campaign using good data practices and a high-quality call center.

A large number of customers are walking in to the dealership with the letter in hand. When the customer purchases at the dealership, the dealer keeps the entire sale at full commission!  

This article was originally published in Zurich NA's "Dealer Principle", Volume 2, Winter 2020. 

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