Auto Laundry Magazine May 2000

PROFIT ON THE WEB
Customer Referrals Through Internet Links
by Mark Crary

The Internet has created a wealth of new opportunities. Just ask the secretaries of many high-tech firms who have retired as millionaires. One opportunity that has thus far escaped widespread notoriety is the "affiliate program" concept. As part of an internet marketing strategy that utilizes permission-based e-mail customer contacts and the interactive nature of a "personal garage" web site to their best advantages, affiliate programs are emerging as a potentially important new source of profit for the car care industry.

A Los Angeles-based direct marketing firm is working fast to become a hub of automotive-affiliate commerce by leveraging the more than 2 million e-mail service reminders it plans to send each month on behalf of its 4,500 fast-lube, car wash, and full-service garage clients. The firm currently sends service reminder postcards and customer-acquisition direct mail for its clients, and is now moving into on-line marketing with a low cost e-mail reminder service, "personal garage" web site design services that are customized for the automotive industry to include features such as personal vehicle service history and factory-recommended maintenance, and an affiliate program.

"Now is the right time to move into Internet-based marketing strategies," says Barry Silver of Mailmark Direct Marketing Services. "With well over half of Americans on-line and that number growing at an incredible pace, there's a tremendous opportunity to sell existing customers services they need, bring in new business, and generate revenue. But it takes more than a web site.

Communicating with customers is vital to any business. The three-pronged attack of permission-based e-mail reminders, a custom web site with "personal garage" features, and an affiliate program work together to reach existing customers and keep them returning, and to bring in new customers. According to Digital Impact, consumers respond to permission-based targeted e-mail three to ten times more often than they do to banner ads that flash across their computer screens.

Targeting consumers when they're due for service boosts the response rate even higher. A computer system confidentially pulls work-order information from the car wash or fast lube's computer and creates a predictive service model after a vehicle has been serviced twice. E-mail service reminders (which are not annoying spam, since the customer requests this contact option) push the facility's message to the customer when the customer's vehicle is in need of service. If the e-mail addressed reminder fails for any reason, the customer can always be mailed a postcard.

When customers open their e-mail, they'll find the service reminder message, coupons promoting special offers which they can print out themselves, and links to the car wash, fast lube, or service center's website, as well as links to the web sites of non-competitive affiliates. On the web site, customers can see their vehicle's service history for themselves as well as the service that's recommended by the manufacturer. By providing this information you permit customers to see what's been done and what needs to be done before they ever pull into your location. Whether it's an oil change of detailing service, you don't have to sell it because it's already been sold.

The affiliate program is the wild card in an effective Internet marketing strategy because it provides two powerful ways to bring in new, overhead-free revenue. But the key to a successful affiliate program is achieving the "critical mass" of traffic needed to make the program a true success. The value of a network increases exponentially by the number of users, according to e-commerce experts. Vendors want to be where the customers are, and customers want to be able to one-stop shop. In other words, you need to have enough web surfers mouse clicking their way to and from your website to make the program a real revenue generator.

Utilizing thousands of contacts within the automotive industry, the marketing firm is building a network of affiliates, including leading on-line car seller CarsDirect.com and service warranty provider Warrantybynet.com, as well as thousands of fast lubes, car washes, and service garages that mutually benefit from driving business to each other.

Each time a fast lube, auto service center, or car wash affiliate's customer clicks on the link embedded in his or her e-mail service reminder or on a link within the affiliate's web site, the affiliate is either paid a fee for the lead or a higher fee if a sale is generated within 30 days. The program can be structured so that the fast lube or car wash maximizes its income potential. The result is an overhead-free profit center with enough traffic to make the program a true success.

The marketing firm sets up and maintains affiliate programs for its clients and works to create other opportunities for its clients where they exist. "We have a program in place for new car buyers to get a free car wash, and we're working to see if we can develop a program for new car buyers to get their first oil change free," says Silver. "The fast lubes, full-service garages, and car washes earn extra income from the affiliate program, and often new car buyers who try their service for free the first time will become repeat customers."

One of the cornerstones of the affiliate program is CarsDirect.com. As on-line car sales grow, affiliate program income will grow with it. According to Forrester Research, the number of households that will buy cars on-line will grow from 17,000 this year to 470,000 in 2003, representing $12 billion in sales. More than 5 million new car and truck buyers will use the Internet this year to help them decide which vehicle to purchase, according to J.D. Power and Associates. That adds up to millions of mouse clicks, and could mean significant profit for operators who take advantage of this trend.

E-mail service reminders start the process by allowing operators to communicate more effectively with their customers. The e-mail pulls customers to the website and ties them to the store. Affiliate programs go a step further and link customers to other businesses. If your car wash has affiliate links on dozens of noncompetitive web sites, you'll see lots of new customers coming in with coupons they printed on their home computers.

An effective on-line presence can have an upward spiral effect on a business. The marketing strategy generates power by combining the effects of different media in just the right way. E-mail service reminders are an effective means of contact and drive customers to your website. Your web site allows you to deepen your relationship with customers through its interactive nature. Each medium is used to its best advantage in order to bring customers into your store. The affiliate program drives new customers to your location from other noncompetitive affiliates while generating income with every mouse click.

The Internet gives an operator more choices for communicating with customers and more efficient ways to reach potential customers. Today's marketing means communicating with customers the way they'd like to be communicated with. The web is so high tech that customers may think, "If they can send me an e-mail and maintain my vehicle's service history, they can definitely change my oil or wash and detail my car."

It is projected that affiliate program participation commitments from 1,500 service centers will be in the bag in the near future, giving the venture the "critical mass" necessary to make it a winner.

Mark Crary is the Director of Marketing for Canoga Park, CA-based Mailmark Direct Marketing Services.