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INNOVATION THAT EXCITES Service Retention Project
George Brown College
2014
1. Introduction
2. Company Background
3. Nissan Canada - Current Situation
4. Nissan Service
5. Situation Analysis
6. Problem
7. Objectives
8. Segmentation
9. Marketing Strategies
10.Target Customer Profiles
11.Position Strategy
12.Tactics
13.Testing and Measurement
14.Calendar
15.Budget
16.Expected Results
TABLE OF CONTENT
• Database Overview
• Data Issues - Suggestions
• Further Considerations
“Marketing Management – Strategic Relationship Marketing” program at George Brown College
School of Business requires submission of a Database Marketing Project.
The objective of the project is to enrich student’s strategic-thinking, analytical skills, project
management and client relations skills.
Nissan Canada Inc. Head Office Aftersales Department agreed to become a “client company”
within the project.
Recommendations and suggestion to enhance the database resulting from a strategic database
marketing analysis are provided in the following report.
1. INTRODUCTION
Japan’s second-largest automotive company,
Nissan Motor Co. is headquartered in
Yokohama, Japan, and is part of the Renault-
Nissan Alliance.
Globally, Nissan Motor Co. is the sixth largest
automaker in the world behind General
Motors, Toyota, Volkswagen Group, Hyundai
Motor Group and Ford.
50thAnniversary in Canada - 2015
Nissan Motor
Corporation
In Canada, Nissan Canada, Inc. is the Canadian sales,
marketing and distribution subsidiary of Nissan Motor
Limited and Nissan North America, Inc. Their offices
are located in Vancouver (BC), Mississauga (ON) and
Kirkland (QC).
[
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2. COMPANY BACKGROUND
Nissan delivers a range of over 60 models
under the Nissan, Infiniti and Datsun brands.
Pioneer in zero-emission vehicles, Nissan
introduced in 2010 the Nissan LEAF and has
almost a 50% share in this category.
CANADA AUTOMOTIVE MARKET SHARES
CAR SALES 2014
Nissan’s goal for 2016 is 8%
*Excluding Infiniti, Nissan has 5.7%
Nissan has been the fastest growing brand in Canada in the non-luxury segment, according to
Interbrand this momentum has expanded since 2012. For 2014, sales performance has
increased from 1.77 million units to 1.79 million.
Brand value growth in Canada proves constant improvements in quality, reliability, innovation
and growing customer reach.
In service, the overall retention rate has increased over the years. The target for 2014 is 57.5%,
but the current number is 2% behind. Calgary and Edmonton present the lowest service
retention rate, compared to the national one.
CURRENT SITUATION
3. NISSAN CANADA
Target 2014 Current 2014 2013
National 57.5% 55.5% 54%
Calgary 46.01% 44.8% 46.03%
Edmonton 45.9% 40% 40.4%
Nissan customers are strongly advised to visit dealerships for scheduled maintenance in the
following scenarios:
Customer is considered to be retained when they meet all the above requirements. The
measurement on retention is done on a rolling basis.
Attrition is measured on a monthly basis. Dealerships indicate ”retain until date” for each
customer. In cases when customer don’t show up for servicing within one month from the
“advised dates”, they are included in the calculation of attrition rate.
SERVICE OVERVIEW
4. NISSAN SERVICE
2013 2014
Recency Every 3 months Every 6 months
Mileage Every 6K Kilometres Every 8K Kilometers
Frequency 4 times a year 2 times a yearIn this project, the calculations are made on the
basis of the combination of both sets of parameters
SERVICE RETENTION FACTORS
Edmonton and Calgary Dealerships are
performing very well in regards to the
sales volume (all of them are in AA or A
groups according to Nissan’s
classification). An onsite study could be
made to see if the focus is shifted
towards sales and the importance of
servicing is being ignored.
Qualification of technicians and
mechanics has direct impact on the
customer satisfaction from the obtained
services. Additional trainings for the staff
might be required.
It is worth evaluating customers waiting
time experience to learn if it might be
causing low service retention rate. A
tactic of a “secret buyer” might be
suggested.
DEALERSHIP COMMUNICATION CUSTOMERS
Dealerships decide if they want to be
enrolled in marketing campaigns
designed by the head office. A closer look
into campaigns that are being run by
Edmonton and Calgary dealerships may
reveal another reason of low retention
rate.
There might be inconsistency in deploy of
timely reminders that should be sent out
to invite customers to come for servicing.
Analysis of customer satisfaction index
that is being calculated for each
dealership may provide the company with
customer insights.
Tracking that hand-outs about servicing
are given when customers purchase their
cars also might also have an impact on
the retention rate.
A study focused on analysis of
competitors performance in Alberta may
show that low retention rate are specific
to this region.
Clients in Calgary and Edmonton
believe that estimates at dealerships are
accurate, Nissan knows its products (9%
over the national) and they are opened
to building relationship with the
company. It is important for them that
Nissan treats them as exclusive.
They prefer Email as a channel of
communication and consider 4 times per
year an optimal frequency.
Also, they showed interest in regular
discounts (money issue was raised
more often in comparison to the national
average) and promotions as well as
reward programs.
To be able to explain the reasons of low service retention rate in Edmonton and Calgary the following factors are recommended to
be explored in great detail.
SWOT STRENGTHS MARKETING IMPLICATIONS
Fastest growing brand in Canada with global reputation • Positive implication in brand awareness and reputation
• Opportunity to build Nissan Parts and Servicing Brand
Positive momentum in sales - Over 100,000 vehicles sold
(Q1 of FY2014)
• Positive story that can be leveraged in communications
• Ensure that new customer information meets the
marketing database requirements for various purposes -
e.g. segmentation, target and personalized
communication
• Full line OEM. Nissan offers its customers a choice of
genuine spare parts and ‘value advantage’ one that are
more affordable.
• Calgary and Edmonton clients trust that expert and
high-quality services are being provided at dealerships.*
* Source: Regional Difference Study
Opportunity to leverage and focus on strengths that had
been previously identified by customers in these regions
5. SITUATION ANALYSIS
Lack of consistency in dealership’s websites obfuscates
brand message.
SWOT WEAKNESSES MARKETING IMPLICATIONS
Dealerships are independently owned and operated.
Head-office can interfere in critical situations
Consistency in communication efforts, marketing actions
and standards applied to the database are hard to
maintain
At the moment, each dealership has it own website that
differ from the corporate one. Social media content is
offered to the dealers to use but not a lot of them are
taking advantage of it
• Database should be developed as customer centred to
improve segmentation, targeting, and relevancy of
messaging
• Nissan Canada Inc. and dealers should share a unique
standard to gather data
• Difficult to improve customer experience without
knowing what is the total scope of complains and
requests
Lack of Nissan Parts and Servicing Brand in which
customers can believe. Customers do not have clear
expectations on the servicing
• Database is organized around VIN-ID
• Data entry doesn’t follow strict standards
• Communication between head-office and dealership
function as suggestions, not directions, this includes the
actions that want to address customer’s complains and
requests
Opportunity to deliver a unified message about the
servicing: well trained technical staff, equipment tailored
for Nissan vehicles and expertise
SWOT OPPORTUNITY MARKETING IMPLICATIONS
Increase of software developments in the field of car
diagnostics and servicing
Create partnerships with Software companies, develop
online direct marketing campaigns and create useful
web/mobile applications that would improve Nissan
customer servicing experience
• Significant increase in usage of mobile apps and
online activity
• Canada is a wired nation. Mobile and online usage in
Canada reaches the level of over 80% of population.
North America Internet penetration is 83%.
• Opportunity to lead competitors with mobile app
development, reinforcing Nissan’s slogan ‘Innovation
that Excites’
• Opportunity to incorporate features for servicing -e.g.
reminders, booking servicing, special offers, etc.
SWOT THREATS MARKETING IMPLICATIONS
Prices for the same services at independently owned
repair shops are perceived as lower in comparison to
the dealerships
Emphasize the value and expertise of Nissan’s servicing.
Opportunity to develop reward programs to enhance long
term relations and prevent customer attrition
Competitors’ stronger and growing presence on digital -
web, social media and mobileMarketing should be involved in the redesign of the
website and communication channels to meet Canadian
customers’ needs
Competitors’ high share of voice (Mr. Lube, Canadian
Tire etc) offering repairs and goods for customers
Consider increasing the amount of advertisement of
Nissan Parts and Services
How to increase service retention among
existing customers in Calgary and
Edmonton?
6. PROBLEM
Increase the service retention rate in
Calgary from 46% to 48.4% (+5%
growth) and Edmonton from 40% to
45.9% (+13% growth)
7. OBJECTIVE
*Service Retention: Customers who have 2 service visits in 12 months, starting in month 7
8. SEGMENTATION
DETAILS
Four strategies will be elaborate for different segments depending on three aspects: Frequency, Mileage
and Recency.
In the calculations, both Calgary and Edmonton number were combined because same strategies will be
suggest for these regions.
The blend of all three aspects when the ranges crossed, determine the segments.
SEGMENTATION
2014
2013
High (4+ visits)
Moderate (2-3 visits)
Low (1 visit)
Very Low (0 visit)
High (4+ visits)
3.4% 5.9% 6.4% 5.2%
Moderate (2-3 visits)
9% 11.5% 12% 10.9%
Low (1 visit)
4.7% 7.2% 7.7% 6.6%
Very Low (0 visit)
0.5% 3.0% 3.5% 2.4%
Frequency
SEGMENTATION
2014
2013
High
+24 Mileage
Moderate
(16-24K Mileage)
Low
(8-16K Mileage)
Very Low
(< 8K Mileage)
High
+24 Mileage 5.8% 6.5% 8.6% 9.9%
Moderate
(16-24K Mileage) 4.5% 5.2% 7.3% 8.5%
Low
(8-16K Mileage) 4.5% 5.1% 7.3% 8.5%
Very Low
(< 8K Mileage) 2.7% 3.4% 5.5% 6.7%
Mileage
SEGMENTATION
2014
2013
High (12+ Months)
Moderate (6-12 months)
Low (1-6 months)
Very Low (Never show up)
High(12+ Months)
0.5% 2% 5.9% 2.9%
Moderate (6-12 months)
5.4% 6.9% 10.8% 7.7%
Low (1-6 months)
9.8% 11.3% 15.2% 12.1%
Very Low (Never show up)
0.0% 1.5% 5.5% 2.7%
Recency
2014
2013
High Moderate Low Very Low
High
Moderate
Low
Very Low
9. MARKETING STRATEGIES
Grow10.52%
Deprioritize27.91%
Win Back32.08%
Retain
29.59%
10. TARGET PROFILES
Town/Rural Midscale, Income: around $ 100,000
Middle-aged, Life stage: Family Traditions
With some of the highest blue-collar jobs in trades, transportation and
mining the Prairies residents live a fast paced life. They value wisdom,
strong family relationships as well as frequent communication with
close friends. These families like to spend their free time at home with
their HDTVs, 87% own cell phones and use mobile devices.
Found of nature, many also spend time outdoors going camping,
power boating, snowmobiling and playing hockey. When they travel,
they typically hit the road in their SUVs and truck hauling campers to
explore national parks.
When purchasing a vehicle they pay attention to the functional
benefits: reliability and performance. They are concerned about
the money and are very likely to respond to offers, deals and
discounts*.
* According to PRIZM C2 Segmentation
Calgary and Edmonton
11. POSITIONING STRATEGY
For customers who want to get reliable
service and fix it right the first time,
Nissan provides expert scheduled
maintenance to maximize the value of
their car
12. RETAIN TACTICS
REWARDDirect Mail includes
• Loyalty ‘Platinum Club’ member card
• Letter explaining the benefits and rules of the membership
• Exclusive event invitation for the program launch
Benefits for club members
• Lounge area with special services to improve waiting time experience at the dealerships
(TV, couches, food, beverages, laptops, wi-fi connection)
• GT-R Driver School (One day training program with professionals for each customer)
• Prize draw for car race tickets (2 times a year)
• If the repair is major, a car from Nissan fleet will be given to Platinum Customers to use
during the service time
• Free car washing service
Advertising campaign to support a “Customize
Your Vehicle” contest with a prize given to each
50th customer coming for service at the
dealership, for a limited time, an opportunity to
improve the vehicle any way the customer
wants.
GROW TACTICS
ENGAGE
Actions
• Send an email (customized for mobile) containing the information about:
- If the repair is major service, a car from Nissan fleet will be given to customers to use
during the service time
- Free car washing service
• Direct calls from dealers to remind them to use service every 6 month or/and 8,000 km
This segment will be our main focus because in the
data they have the highest percentage of 32.08%
WIN BACK TACTICS
INCENTIVIZE
Direct Mail Coupons:• 15% discount for oil and filter change (55% customers are motivated by oil and filter change, 62% of
customers in Alberta are using Express Service)
• 10% discount for lube and tire work (77% customers go for lube and tire work)
• A scratch card with a number of free different services (when a customer comes to the dealership
he/she can choose one of the listed free services once per visit)
• Emails (customized for mobile) about the Platinum Club benefits and requirements Win Back
customers need to meet in order to obtain membership
• If it’s a major service, a car from Nissan fleet will be given to customers to use during the
service time
• Free car washing service
DEPRIORITIZE TACTICS
• Email them service reminders in a regular basis
• Email them all offers and benefits of the servicing
for the other segments to persuade them to be more
active at servicing with Nissan
LOWER EXPENSES
13. TESTING AND MEASUREMENT
REWARD• Waiting in Lounge areas:
Satisfaction surveys will be design to ensure that customers expectations are been
fulfill. The measurement will be based on the level of satisfaction and customer
feedback.
Measurement will include the actual number of clients who use the incentives
provided.
ENGAGEMENTTo measure this segment, we will track the number of responses to direct calls and
emails. The communication will contain the information about the new services and
the contest taking place. By tracking the click through rates of the links in the emails
we will measure the effectiveness of the engagement.
TESTING AND MEASUREMENT
INCENTIVIZEWe will count the number of coupons used compared to the total number of coupons
sent to see whether our tactics are effective.
By tracking the click through rates of the links in the emails, we can measure our
service reminders, as well as the messages including the information regarding
benefits of the other groups
LOWER EXPENSESFirst, we will test the response of this segment in order to decide if it is profitable to
apply further tactics. Lower Expenses customers represent 35% of all customers, for
these reason 15% of each region will be selected to conduct the test -aprox. 277
clients.
• We will send them an email letter with a “call to action” and links to track the number
of responses. If the number of is higher than 15%, we will run the upgraded tactics.
14. CALENDAR
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Retain
Direct mail prelaunch
Direct mail deploy launch of GTR Drive School
Email withGTR Drive School Testimonials
Exclusive EventEmail about the Event
Providing the Platinum Club Services
Win Back
Direct mail prelaunch
Direct mail deploy Email Email Email
Reminders sent out on a rolling basis, Win Back services are being provided
Grow
Email deploy Contest Implementation Email Email Email
Reminders sent out on a rolling basis, providing the Grow Customers services
Deprioritize Email deploy Email Email Email
Reminders sent out on a rolling basis
15. BUDGET
Segment Size
Calgary and Edmonton
Unique Clients Avg. Time Avg. Spending Total Revenue
Reward30.26% 1,595 2.92 250 $1,163,203.13
Growth10.99% 579 1.50 250 $217,281.25
WinBack29.74% 1,567 1.88 250 $734,687.50
Deprioritize29.01% 1,529 0.50 250 $191,125.00
Total 100.00% 5,271 $2,306,296.88
SCENARIO 1/ CURRENT
Segment Size
Calgary and Edmonton
Unique ClientsSegment
Increase RateAvg. Time Avg. Spending Total Revenue
Reward 39.3% 2,070 30% 2.92 $250.00 $1,509,491.67
Growth 9.4% 493 -15% 1.50 $250.00 $184,940.58
WinBack 26.0% 1,370 -13% 1.88 $250.00 $642,222.83
Deprioritize 25.4% 1,338 -13% 0.50 $250.00 $167,198.72
Total 100.0% 5,271 $2,503,853.80
BUDGET
SCENARIO 2/ PROPOSED
Budget
Campaign$197,556.92
BUDGET
SCENARIO 3/ OPTIMISTIC
Segment Size
Calgary and Edmonton
Unique ClientsSegment
Increase RateAvg. Time Avg. Spending Total Revenue
Reward63.4% 3,344 62% 2.92 $250.00 $2,438,515.63
Growth5.9% 310 -37% 1.50 $250.00 $116,226.19
WinBack15.5% 819 -40% 1.88 $250.00 $383,764.70
Deprioritize 15.1% 798 -40% 0.50 $250.00 $99,764.43
Total 100.0% 5,271 $3,038,270.95
Budget
Campaign$731,974.07
BUDGET
16. EXPECTED RESULTS
• Reach service retention rate of 48.4% in Calgary and 45.9% in Edmonton
• Achieve total revenue of $2,503,853.80
• Relevant segmentation that can be applied to all of the available servicing
records
PROPOSED SCENARIO
GENERAL
• Incorporate customer central data system in dealerships
• Improve data related to service retention (POLK and NCOA List)
The analysis is based on 33K customer records provided by Nissan
Specifics:
• In 33K records, only 5.3K were considered valid to work with Nissan brand
• For analysis purposes, only the data on Calgary and Edmonton dealerships was
used
• Segments: Recency, Frequency, Mileage
*General Target profiles description are based on the Servicing Landscape Study
and Regional Difference Study - all corporate documents provided by Nissan
Canada Inc.
DATA OVERVIEW
DATA OVERVIEW
Dealers do not use the updates sent by the head office
Data goes 7 years back, there is a chance not all of the ownership records are correct
Address are valid but not updated
There are no standards on data input
MAINFRAME
DATA BASE IS VEHICLE ORIENTED INSTEAD OF CUSTOMER ORIENTED
DATA ISSUES
DATA SUGGESTIONS
FURTHER CONSIDERATIONS
TARGETING 2nd OWNERS
One of the supplementary actions that Nissan could take in order to increase the retention
rate is reaching out to the 2nd and 3rd customers. When people purchase used cars not
directly from a dealership and never inform the company about the change of ownership,
Nissan does not have a way to communicate with them and make sure that they come for
servicing.
A solution to this problem could be:
- Recurring ownership check with POLK
- Address update according to the National Change of Address (NCOA)
If Nissan possessed the verified list of current owners with their current addresses, a direct
mail campaign could be launched and yield into 2% response rate.
*In relation to Canadian legislation changes related to privacy policies and spam, Nissan should consult the
legal department to make sure that these suggestions can be implemented.
FURTHER CONSIDERATIONS
BUILDING IN-HOUSE LIST
• Reward programs should be linked to online customer’s profiles. Ask member to register
on the website and give them a benefit for joining
• In store promotes and events, ask people to join Nissan’s email list
• Ask dealerships and sales staff to invite potential customers to participare in contest or
other marketing campaigns
INNOVATION THAT EXCITES
APPENDIX
NUMBERS BEHIND THE SEGMENTATION
The segmentation is based in 5,271 total records: 2,642 are from Calgary and 2,629 are
from Edmonton
Step 1: Divide Calgary & Edmonton records by ranges in Mileage, Frequency & Recency
Step 2: Find the total by ranges in each category. Look for patterns or similarity in both cities
Step 3: Compilation Calgary & Edmonton in one table by each category to be studied
Step 4: Divide in Matrix by Year ( 2013 & 2014) adding the value in each quadrant ( (2014_4
+ 2013_4)/∑ Matrix). This process is repeated by each quadrant)
Step 5: Summary the entire table and divide each quadrant by the total in order to find the
respective %
APPENDIX
APPENDIX
2014
2013
High Moderate Low Very Low
High 3.23% 4.79% 6.98% 5.99%
Moderate 6.30% 7.86% 10.05% 9.06%
Low 6.31% 7.87% 10.06% 9.07%
Very Low 1.09% 2.65% 4.84% 3.95%
CALGARY SEGMENTATION
APPENDIX
2014
2013
High Moderate Low Very Low
High 5.04% 4.62% 5.73% 5.93%
Moderate 4.70% 2.98% 4.09% 4.29%
Low 6.90% 3.37% 4.48% 4.68%
Very Low 4.25% 3.14% 4.25% 4.45%
EDMONTON SEGMENTATION
