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Episode Description

On this episode of The Digital Shop Talk radio, hear how BayIQ helps shops increase car count and average repair order by building customer loyalty, and get a sneak preview of what’s coming next for BayIQ and AutoVitals.

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Episode Transcript

*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].

Tom Dorsey (00:00:06):
Good morning and good afternoon. Welcome to this week’s edition of The Digital Shop Talk Radio. I’m Tom Dorsey, and today we’ve got a great show for you. It’s a peek behind the curtain, so to speak. This last year’s been pretty crazy with COVID and all the other stuff that’s been happening in the world, but that hasn’t stopped AutoVitals from continuing to strive to add value and bring that value to our loyal and respected customers. And so today we’ve got an episode where we’re going to talk a little bit about what’s been going on and give you some insights and give you some fresh perspective on what to look forward to in the future. And so I’m very excited to welcome Jennifer Thronson, our new VP of Business development and general manager of BayIQ, to talk a little bit about that, what’s happening with that merger.
And also Jon Belmonte, the CEO of AutoVitals. Welcome, welcome, welcome folks. Thanks for having us. Tom Uwe. Yeah, my pleasure. I think this is the first time I’ve had you on the show, Jon, so I know. I think I stopped in and stalked a couple of times early on. But no pressure buddy. No pressure. Big privilege. I appreciate it. Yes, and as always, my co-host with the most and founder and CIO of AutoVitals, Uwe Kleinschmidt. Welcome Uwe. Thank you. Thank you. And so Jennifer, we’re really excited to have you on. I know you guys have been busy and a lot of stuff has been cooking. And we’re finally, this is kind of like the coming out party we’re going to have here and talk about what’s currently available, what have you got cooking, what’s the future going to look like for folks? And I know we’ve got a lot of people that are interested in finding out what’s happening and what they can expect. And so I think we’d kick it right off if we can with you, Jennifer. And if you could just give us a little background about, for folks that are unfamiliar with BayIQ, what’s BayIQ all about and how does it help shops?
Jennifer Thronson (00:02:13):
Sure. Love to. So BayIQ is a software platform built around a loyalty rewards program. And then there’s some complimentary features within the platform like email and text message marketing, online review solicitation via Facebook and Google appointment scheduler. Obviously some reports and dashboards, and then integrates well with a lot of point of sale systems. And then some of the main values that we look to provide to our shops are the ability to incentivize customers to come back to your shop. So versus going to the other guys also gives you a little bit of a competitive edge over others that might not offer something like a rewards program. And then throughout all industries, it’s pretty well known that loyal customers are the most important piece of your business. It’s a lot to get people that already know you coming back in versus acquiring new customers. While both are important, that’s what we look to do at BayIQ. So getting people that already come in to see you coming in more often and spending more money when they do. So increasing ARO.
Tom Dorsey (00:03:15):
No, that’s fantastic. And a couple weeks back, we had a great show. We had Carolyn Coquillette from Shop Ware on, and we were talking about how part of her reasoning and process around development is that this digital consumer experience is becoming ubiquitous across channels, across products, just we have as digital consumers these expectations that things are going to work the same no matter where you are and who you’re doing business with and so on and so forth. How has that influenced you in the development of BayIQ from the same experience you would get with say, rewards programs in other areas? And how has that benefited the shops and does it really change the perception of the motorist, especially when they’re looking maybe for a new shop to do business with?
Jennifer Thronson (00:04:10):
Yeah, I mean I think there’s a lot to be said over the last several years and it continues to play a factor, customer expectations as a whole, as those continue to rise and more and more companies in all industries, like you said, are implementing rewards programs just across the board, I’m sure all of us on the call today are using something in our normal lives day to day, whether that be airline miles, CVS, the grocery store, you go to Starbucks, there’s rewards programs all across the board. So it’s really just giving shops the ability to stay on top of those customer expectations. And then as I touched on a little bit, it just gives you another leg up on the people that might not be doing that just yet. So yeah, I don’t know if you have anything that you’ve seen or any examples come to mind for you? For me, I know that I go to Starbucks just because I get rewards points there. Not necessarily because the coffee’s great or it’s even that close. It’s just basic consumer psychology these days.
Tom Dorsey (00:05:12):
Well, yeah, that’s a great point because a lot of people are doing that. They’re making buying decisions based off of that availability where it’s, yeah, I’m going to get a hamburger and I can get a hamburger here and I can get a hamburger. There’s hamburger ham on a burger or something. But then it’s kind of that idea of I’m going to get a little extra. So for shops, especially for shops that might not be doing a rewards program or have been thinking about it, what can they expect? I mean, what is kind of the quick wins that you see from the customers that have been using BayIQ when they first start offering that type of program?
Jennifer Thronson (00:05:51):
Sure. I think there’s a few things. First being a lot of shops don’t necessarily have a ton of great data, so it’s a really easy way to ask people when they come in for either their contact information that you might not already have or ask them to validate it when they feel like they’re going to get something via email or text from you. In terms of rewards points or a special offer for being in the rewards program, there are a lot more likely to give you that information and feel less uneasy about, oh, I’m just going to get spammed if I give them my real email. So that can certainly help. And then a lot of systems, AutoVitals included, does a wonderful job reminding people to come in at the right time, obviously pushing them to purchase more recommended services. When we can layer in adding something like rewards points or an additional bonus or something like that that they can get, those messages just become way more valuable because now you’re reminding them of these things that they already need, but you’re also giving them a reason to buy now instead of just keep pushing it off.
Those are the main takeaways I think, is it just supports a lot of the marketing efforts that the shop might already be doing.
Tom Dorsey (00:07:04):
It’s a great icebreaker. It’s a great way to set an expectation of how this is how my digital shop runs at the drop off right at the front counter. What about from a new customer acquisition perspective? I mean, as we were talking about just a minute ago, you’re saying, Hey, you selected a business based off of the availability rewards. I know a lot of people buy credit cards based off of that. They shop for credit cards based off what I’m going to get back. Do you recommend for folks that they include that expectation in their new customer acquisition marketing planning?
Jennifer Thronson (00:07:37):
Yeah. Yeah. I think it’s a really important thing for the shop to add at least some component, whether it’s enroll for the rewards program or at least advertise it in some way on their website and then incorporate that in any type of newsletters or communications that they’re sending out depending on their new customer acquisition strategy. Website’s the easiest one. So if I’m already doing a search and something pops up with this rewards program, maybe I get $10 off or x percent off on my first visit, I’m a lot more likely to test out that shop because it shows me, not only am I going to get something from it, but it shows me that the shop really cares about their customers. So that’s kind of the main thing that we can provide on the acquisition front is just that extra layer of we really care about our customers and here’s what we’re doing for them.
Tom Dorsey (00:08:28):
And so let’s say I’m a shop owner, I want to implement this. I’ve been hearing about it and I know other shops are using it and they’re having success. What would you say is the most important considerations that I should make before I implement? Is there something I should do to get ready? Is there some pre-marketing I should do? Is there training involved for my staff? I mean, obviously I think it sounds like it’s a no brainer just to build it right into your drop off script, but what else would I want to prepare in preparation for bringing on BayIQ?
Jennifer Thronson (00:09:03):
Sure. I actually don’t think there’s a ton of prep that’s necessary. Obviously we take care of that in terms of training and getting the staff ready and comfortable using it. There’s a few different ways that we integrate with the different point of sale systems that make it pretty easy for the advisor to just be able to see the points in real time and talk that or build that into kind their talk track when, whether it’s drop off, if they’re going over, if they’re using AutoVitals, for example, going over the inspection now they can bring up those rewards points and try to push recommended services. It’s a way to build rapport and maybe smooth over any issues that could occur. It’s now a rewards points instead of giving a true discount potentially. But I don’t know that they really need to prepare a whole lot during the onboarding process.
We will send out an email to the whole customer base with a call to action to enroll in the rewards program. So a lot of customers will do that on their own that can really help. The rest is really covered by the team during onboarding. So we’ll set up training, whether that’s for the back office to look at reports and settings and configurations versus the advisors getting them up to speed on how they’re going to work that in, and then making sure that the whole shop is aware of where their customers would potentially see these things. Is it on the website? If so, where is it now on these emails? So they know what those look like if a customer comes in and holds up their phone and just making sure that everybody’s on the same page, but there’s not a lot of legwork that’s really required. I dunno if I’m answering your question, but yeah, it should be pretty easy.
Tom Dorsey (00:10:36):
Definitely. Yeah, I mean we like easy and so there you have it folks is if you’re considering this, if you haven’t done it yet, don’t be afraid, right? You’ve got the support here. It’s something that’s going to implement seamlessly into your current process. Not a lot of need to add a lot of process changes, but just build some muscle memory around the messaging. And so Jennifer, when the shop joins, are they going to get, is there a mass kind of opt-in that goes out to their customer base and say, Hey, we’re now offering this thing and click here to get enrolled. And then what does it look like once you’ve kind of done that? What does it look like to get somebody in the program? They just come in at drop off and I just click a button and add ’em to the software? How does that work?
Jennifer Thronson (00:11:30):
Yeah, good question. There’s a few ways that the shop can get their customers enrolled. Just like you said, during that onboarding process, we’ll send out a blast to the customer base introducing the rewards program. Again, the call to action will be to join the rewards program, so it’s just a one click customer will enroll. So that’s fairly simple, and that same email can be sent at any time, so they can trigger that same campaign if they want to hit the customer base every couple months or we usually recommend every six months or so. So that’s one way. Then there’s a few other ways. The most common is certainly having the advisor enroll the customer at the point of sale. So depending on the point of sale they’re using, that might be right inside the point of sales ui. So it’s fairly simple. Some others, it’ll take a few clicks, but nonetheless, it’s a really easy seamless process and makes sense during the drop off or even at checkout.
So that’s one way. And then there’s a few other ways that we can try to get customers to sign themselves up. One being the website. So I mentioned it’s a best practice to add some type of page, whether most shops already have specials or something like that. So whether it be a new rewards program page or they tack it right onto there, we can embed a form so customers can enroll themselves from the website. And then as part of training as well, we’ll provide a flyer that they can hang up in the waiting room or really wherever they want within the room, the door is all of those things and work into any of their marketing materials with a text keyword to short code. So if we have Tom’s Tire Shop, for example, customer walks in, they might see a sign that says, text Toms to 6 6 1 5 8. That’ll enroll me in the rewards program as well. So customers can go through that whole workflow. We’ve seen a lot of shops add tons of signage so that customers are doing that on their own while they’re waiting. Some even add it to the back of the monitors, maybe the text tablets depending on the arrangement so that customers will see that and enroll themselves. And it kind of takes the pressure off the advisors, but I think the best practice is still to have the advisor do it so that they’re working in that conversation.
Tom Dorsey (00:13:43):
Yeah. And you mentioned point of sale, I would imagine most folks that are listening to this are going to say, Hey, I want it to have the most robust integration possible, and that I would imagine be through the point of sale, so I don’t have to go, let’s say to a separate website or form or something to enroll somebody. And I’m assuming, but I don’t know, what point of sales do you integrate with all the point of sales that AutoVitals integrates with? What does that look like so that folks get an idea if it’s available for them through their point of sale at this time?
Jennifer Thronson (00:14:18):
Yeah, good question. So we work with about 35 different point of sale systems. It is just a little bit different experience depending on the system that you use today. So in one scenario, the advisor can actually use IQ within their point of sale. So Protractor, for example, we’re built right into that UI advisor can hit a little BayIQ button from the RO and Protractor or on the customer record access, all the points, do everything that they would need to do. If they’re using something like an NAPA attract or a Mitchell, they have to log into a separate window for BayIQ.
Usually it’s best practice, they’ll just kind of leave the little window open at the bottom of the point of sale system and then access it when they need to. There’s really only a few use cases where they need to. One is to enroll a new customer. So that isn’t happening quite so often. Once you start the program off, and again, that’s where maybe you have customer come up to the counter, you still have that conversation, but you tell them to text enroll themselves. So there’s a few options there. And then if somebody wants to redeem their points, they would need to access that window. So it is a little bit different experience right now, but I know that’s something we’re going to touch on today is what’s to come with the AutoVitals BayIQ integration. And that’s something that we’re trying to solve for to make it a little bit easier. So if you’re using AutoVitals, you can do all that stuff within AutoVitals instead of needing another window for BayIQ. So a lot to come on that front, and that’s the main reason that we’re looking to do that pretty quickly.
Tom Dorsey (00:15:56):
Yeah, exactly. I know a lot of folks are excited to find out what that’s going to look like, but I have a question for you. So what I’m hearing is that it’s easy, it’s seamless. Customers want it and demand it, and I would imagine there’s benefits to it, right? There’s results that benefit the shop. Why would somebody say no?
Jennifer Thronson (00:16:19):
It’s a great question. I guess a lot of shops, not a lot of shops from time to time a shop will feel like they’re giving away money. So maybe if they’re not totally bought into the rewards program in general, which I would challenge, sure they use something day to day, but that’ll be kind of the main pushback that we would get. And the way that we work around that is usually there’s a reason that the shop might say something like that. They don’t want to give points on a transmission replacement, something, a huge ticket item, or maybe on a certain couple tires or certain SKUs, things like that. And so within the BayIQ rewards program, you can exclude any parts or labor line items that you want from ordinary rewards points. So we’ll usually get through that as long as we have that conversation.
Like I said, that nine times out of 10, that’s the real reason is they’ve got something in their head that they’re thinking of and they’re like, I’m not giving rewards points on that. So that’s really nice. And then they can also define the percentage that they’re giving back. So the way that the points work is customer’s going to come in for every $1 that they spend, excluding taxes and shop fees, they’re going to earn one rewards point. The value of that is defined by the shop, and that can be based on the different types of customers. So for example, retail customers, it’s typically best practice to do around 3%. So for every $1 that they’re spending, they’re getting 3 cents in rewards points. But again, that can be defined by the shop. So we’ve seen some people do that up to 10. We’ve seen some people do 1% and it’s a check the box thing for them.
So that can be defined based on what the shop wants to do. They can have an additional rate for military customers and then a different one for fleet or commercial, which in most cases is zero because they already pre-negotiate those discounts and parts and labor. So there’s a lot that we can do to kind of work around that. But I’d say that’s the main thing that the main pushback that we get in the sales process is helping them understand the value that they’re going to get, but also all of these settings that they can control to get around the initial notion that they’re giving money away on some high ticket item that they don’t want to discount at all.
Jon Belmonte (00:18:39):
Yeah, that’s a bunch of, oh, sorry, Tom, just jump in. I mean, I think a bunch of it just comes down to human psychology. I mean, some people are pre-wired to see an opportunity or program like this as more work. I’ve got to implement it. It’s something else I’ve got to train my service advisors on. We’re super busy, we’re having a hard time keeping up. Gee, I’m just going to end up giving away a bunch of money. And then other folks see things like this as opportunity, truly opportunity and say, wow, all these other industries have done this, right? I mean, one of the ways that we’re a bit fortunate in our industry is in some ways we’re breaking completely new ground, but in many ways we’re not. We’re taking best practices from what has worked over and over in e-commerce or in other service industries or B2B, and we’re tailoring them and making ’em work especially well for automotive repair shops. And look, the reality is you’re going to have that in all walks of life. Not to get overly philosophical, but you’re going to have the people who say, eh, too much work. I don’t think it’s going to work. And then you’re going to have the folks who are going to jump on it, and that’s why there’s progress, because the folks who fall in that latter bucket, the folks who take advantage of these types of tools, they’re the ones who thrive and succeed.
And that’s why in the end, whether it’s a year from now or three years from now, every shop out there is going to be offering a tool like this. It’s a conversation that we have over and over at AutoVitals. I mean, I know internally we’ve asked ourselves and we’ve asked shop owners this over and over, why would you not use a tool like inspection? That digital inspection is going to increase ARO by at least 20, probably 40 or 50% if you really follow the best practices or why would you use the tool enough, all the best practices, or really you could apply that to almost anything that a shop owner is doing. And many are and some aren’t. And someday all the ones that are being successful will do it, and then they’ll face some other new kind of dilemma and some will jump on board and some won’t.
And that’ll just continue to drive the evolution of the industry because it’s about the results. And a lot of times it’s not about the work the shops will put the work in, but it’s the expectation of the results I’m going to get out of that work that I think a lot of times make people hesitant. And I think Eric Sewell’s reading my mind somehow over here because that was going to be my next line of questioning Eric, but Eric says, a reason they’ve not done this is the added work on the service advisor. We already have them asking for next appointment, editing, inspection, spending time, educating on services being recommended, et cetera. So they want to make sure that they bring in programs that will generate a great return, what data he’s asking, what data is out there showing a higher return rate and spend rate from those customers
Jennifer Thronson (00:21:43):
Mean I can talk to just the average overall that we see over all the BayIQ shops in general. So we did a blended average for people that are using it at least six months. Obviously it’s going to take a little bit of time to get people enrolled and actually see them coming back for more visits than they would normally. So on average, we see that shops are able to enroll about 47% of their customer base. Now that includes everybody. So that’ll include lost customers, people who haven’t been in two years anyway. So that’s a pretty great rate if you’re able to enroll that many people. And what they see on average is non rewards. Customers will come in about 1.2 times per year, but people in the rewards program will come in 2.5 times. Again, that’s just blended average for BayIQ shops. And then on the ARO side, the average for non rewards customers is about 276, but for rewards customers, it’s 338.
So spread that out over a year. And we’re looking at non rewards customers worth about $331 rewards, customer is worth 845. So that’s just an average across all of our customer base. And there’s obvious reasons for that. And to touch on Eric’s point, wouldn’t want it to feel like a workload on the service advisor, it should just be worked into the regular talk track, but it can take some time to come around on that. And that’s the reason that we’ll suggest putting up some signage, getting it on the website, making it easy for the customer to enroll themselves so that while the advisor’s running around, maybe they’re slammed. It’s not something that they necessarily have to do. If you can train your customers to do that on their own, the only other thing that they would need to do is actually redeem those points. And again, you don’t necessarily need the advisor to bring them up and remind them.
The customer’s going to be getting emails reminding the customer of what they have available. So it’s really potentially on them to say, Hey, I have this coupon I want to redeem, or Hey, I have $5. So we’ve found that a lot of advisors will use it as not only a selling point if you’re getting pushback on some of the services that you’ve recommended, but also maybe a way to just build rapport or smooth over something that I got the formats dirty, but hey, you have $5 off in your rewards account. So it’s more of a, maybe not an every single conversation type of thing, but something that they can rely on or lean on and kind of take advantage of in the scenarios that they need to.
Uwe Kleinschmidt (00:24:17):
I would like to add to that, if that’s okay, Tom.
Tom Dorsey (00:24:19):
Yeah, no, I was going to actually just bring you in because what I want get on is your perspective. Just to Eric’s point and to what Jennifer just said is that it used to be Uwe, that front counter experience was kind of drop your keys off, sign the authorization form, I’ll call you when I know something and go away or go sit down and have some coffee. Now with the digital shop, I mean we’ve got ’em setting expectation for this, educating them about the follow up and the return and the next steps and what’s your shoe size and what’s your date of birth and what’s your youngest child’s name? And we’ve got so many more bits of information and data points that we collect and we put that on the service advisor. What are your thoughts on how we reduce some of that bring in more data collection such as the education on the loyalty points and getting them enrolled? Do we pre-enroll them before the drop? I’d like to get your insights on that. What are you thinking about how this develops over time so that it becomes more valuable and easier to adopt, therefore more likely to be adopted than just seen as more burden?
Uwe Kleinschmidt (00:25:30):
Can I start with Starbucks?
Tom Dorsey (00:25:32):
Of course. Must everything start with Starbucks, take a mocha latte. Good day.
Uwe Kleinschmidt (00:25:40):
I like the comparison to Starbucks. Unfortunately, this is always a pleasure. I do this to get a huge benefit from it. That’s not true for every auto repair visit, especially 10 years ago, it was all about, dang, I have to fix a problem with my car. And then once it’s fixed out of sight, out of mind until the next problem happens. So for me, the loyalty point system is an amazing tool to shift from this repair only need to the maintenance need and prevent the problems from happening. It reinforces regular visits. And if we combine that even with inspection as you said, and we have now more touch points during the visit to remind the customer of it, and it’s not all compressed into this one 30 milliseconds at the end when they’re about to turn around and leave, we have a much higher chance to get the message across that maintenance services are the health S for your car, so to speak. And if you keep doing this, the loyalty point system will reward you. So you combine basically the health need with the inspection and the inspection determines the health need, the loyalty points, give you another incentive to think about it and do the services, which often in the past were seen as is it now a rip off or is it not? Is it really necessary or is it not? The inspection makes clear that it is needed, the loyalty points gives an additional incentive. That would be my summary.
Tom Dorsey (00:27:47):
Yeah, that’s interesting because it’s really saying that you’re going to incentivize somebody to do the right thing when it comes to their maintenance of those people instead of just waiting for it to break down, which becomes so much more costly. Now we’re going to maintain that, and that’s of course, that’s the way this industry’s going. That’s what shops need. I mean, we had Brittany Schindler on last week and she had an amazing number, 80%, 85% of her work is now maintenance. Well, it definitely wasn’t that way 10 years ago, and that’s a great number and one that a lot of people would strive to achieve. But the funny thing is that we don’t really see that. I mean imagine if your doctor had to incentivize you, they do it through fear. If you don’t take care of yourself, you’re going to get this thing. But it’s almost like saying, Hey, come in and get this checkup and then you get two for one leg cast or something in the future, that’s Tiger Woods and take ’em up on that or discount on your health insurance too soon. Right, exactly. But then you get those benefits of less visits to the doctor over time, longer life, all that good stuff that we want to achieve.
But how do you see that being able to change that perception in people’s minds? Because again, if we’re getting just kind of bombarded at the drop, a lot of that’s going to go in one ear and out the other. How do we put the touch that sticks to get people to say, you know what? This is something that I really needed to consider or take seriously and adopt as part of my habits or my regular maintenance of my vehicle?
Uwe Kleinschmidt (00:29:24):
I think the presentation at exit Exit scheduling could be a good start because we have that already where you have the declined inspection results being presented by service advisors who really go the kind of extra mile to make the next appointment already. And just showing to Jen’s point that you can exclude certain services from creating a discount, you can focus on those maintenance services and say, look, yes, okay, we haven’t replaced the air filter today, but it’s not going to get any cleaner in the next six months. And be aware that you get through the loyalty points program an additional, I don’t know, whatever it is, $5 off. I think that’s a very smooth exit scheduling strategy.
Jon Belmonte (00:30:30):
So you get extra points for scheduling at exit
Uwe Kleinschmidt (00:30:33):
In addition. Yes.
Tom Dorsey (00:30:35):
And it takes some of that kind of information overload out of the front and then puts it into the back where I can focus and it ties it together with the next steps, which is brilliant. Dennis Edson is saying that for years he’s been sending out four or five promotions to his best customers. Things like tax rebate checks, summer rebate, holiday stuff, and they’re always successful. He has good success with those. And he’s asking can he send out snail mail type promotions like that with iq?
Jennifer Thronson (00:31:11):
No. Well, we don’t take any of the logistics around the mail on, but what we can do is help a lot of the shops pull a pretty targeted list. So we could help dentists pull a list of people who have X number of rewards points and have been in an X number of times, so you can identify those most loyal customers and then we’d help you put together potentially artwork if you need that type of service. But typically we would just refer you to a key motive or a different impact mailer, somebody like that to actually do the campaign for you. But we can create a pretty qualified list for you.
Jon Belmonte (00:31:53):
But most marketing programs or successful marketing programs, an integrated approach often works great. So you can do an email campaign and you can do a mailer and you mentioned the loyalty program and the more targeted you can be in there, the better in terms of how many points you have or what level or status you are. So I mean obviously hitting them both ways is going to end up being that much more effective and it’s just good content for whatever medium you’re using to get the word out. So is it set up,
Uwe Kleinschmidt (00:32:22):
Can I add one element? So we’re not pushing it all to exit. We have this header on the inspection report, which you can completely customize. Some shops use it to promote their financing program where customers get pre authorized. That’s the perfect spot to start talking about the loyalty point program in my opinion. And so it’s not just an afterthought once the vehicle has left the shop because that’s new information to be digested and nobody talked to me about the loyalty point program because there’s a difference. Not to get too philosophical between throwing out discount discounts on a regular basis or have a continuous message about a loyalty point program. The result might be the same for individual customers, but it’s a completely different aspect In one, you train your customers to wait for the tax discount in the other one, it’s a loyalty program coming back to the same shop because you have a continuous benefit and not just some discount campaigns. I would think about that, that if the perception by the customers is it’s just a discount, then you kind of train them to ask next time, oh, what’s today’s discount? Whereas a lot of the point program is helping to increase the vehicle health, it’s a completely different context.
Tom Dorsey (00:34:18):
Yeah, no, that’s a great point. And that’s one I think that is a little tricky to make sure that that message is correct, right? And that it is perceived that way from the motorist. Because a lot of times I’m not a big discount guy, I just ignore that stuff. And if I’m thinking of it as just another discount or they’re going to raise the price 10% and then give me 10% off, ignore, right? Because that doesn’t really drive my decision making. But I’ll tell you the loyalty point program that I love that I do use because I’m like a hoarder when it comes to these points, whatever, and I get all these points, well, they start sending me recommendations and they start saying, did you know this thing that you buy a lot of, you could get two of ’em on your next visit or something like that.
That makes me spend those points. It really does air miles aside because usually people are saving up for that trip to Costa Rica or something and so they have a plan behind them, but when you just start piling up these points, you don’t really know what to do with ’em. And sometimes I got to tell you, sometimes you just feel silly. You’re standing in the, and there’s a line behind you, you’re like, yeah, I want to get my little discount points and it takes longer, and I try to avoid that stuff. How do you see it being able to be kind of intuitive having some ai? Is it like that already? Maybe it’s already built in to where it’s going to suggest ways for me to use those points. I didn’t mean to stu the crowd here. Anybody from the audience want to answer. We’ll go right ahead and just chat it in, bring you on the panel.
Jennifer Thronson (00:35:51):
I mean, I don’t think anyone’s chomping at the bit to buy an extra air filter. It’s more around sending the message that they should be getting. So whether that’s whatever maintenance is coming up, if it’s an oil change that they’re due for, again, the recommended services is the obvious one that we keep picking on. But it’s true if maybe I come in and I don’t have the money yet for whatever I declined and then I go home, I get my email saying, Hey, remember those services that we recommended that you chose not to do, here’s 10% off if you come in. I’m like, Hey, I got paid last week. I guess it’s time to do it. So I guess that’s kind of how I think about it. And what shops see the most success with is just being able to utilize the points to drive those decisions to happen instead of customer waits and then everything’s wrong with their car.
So it’s trying to get them to be more proactive and come into the shop and then everyone really wins. Now the customer’s taking care of their car, they should be shop’s getting the customer back into that same shop versus them going somewhere else trying to find some discount or driving by someone else. They say, Hey, I’ve been into that shop a couple times. I think they emailed me a few times. I’ll pull it up in my inbox and then I go back to that shop even if they’re not a super longtime customer. So it’s just that top of mind awareness too at the time that they actually need to make a decision.
Tom Dorsey (00:37:18):
So that’s really brilliant. So is it set up that way already, Jennifer, because I think that’s a great second touch and a chance to overcome that initial objection if I can target it to what they declined instead of all this other stuff. Oh yeah, by the way, that air filter that you declined, is it, hey, you declined this air filter, but you know you could do this. Can folks take advantage of that right now? And is it pretty easy to set up and so on?
Jennifer Thronson (00:37:47):
Yeah, the shop can configure any of the messages to be on or off. So if they’re using something like AutoVitals or maybe some other CRM tools, there’s going to be a little bit of overlap. So we’ll work with identifying what the best practice is there, but the recommended service one is far and away the best return. So that’s the one that we’ll usually encourage them to use out of BayIQ, maybe even in addition to the other one, frankly, depending on when they’re scheduling that to go out. I know with IQ they can define the amount of days between when they actually declined it on that ARO to when you want to send that reminder. So we’ll work with the shop on best practices to send that out. But that’s how it works today is it’ll remind them of what they declined on the last visit and then remind them of their rewards point balance. They can also add any additional bonuses or incentives that they want to award that customer if they do come in to get any of those done. So that’s how it works today.
Tom Dorsey (00:38:43):
That’s great. So real quick, I want to bring in Adam Bendzick, Adam Ricky Bobby Bendzick so he says here, I’m going to ask the difficult question. That’s something that’s never happened before. Adam prides himself on asking the difficult question. That’s why we love you, Adam, but he’s saying, if you’re working on certain margins in your shop, then you add a rewards program that is essentially handing out discounts. See there’s that perception. Do you keep your same normal pricing or is it adjusted?
Jennifer Thronson (00:39:14):
Adam, do you do any discounts already today? Get rid of ’em. This should ideally take care of any discounting that you’re doing already. I’d imagine there’s some type of, maybe it’s just a military discount or maybe it’s something that’s in the advisor’s back pocket that they know that they can offer. This is an easy way to not give those discounts and instead reward points that can be used later. So now it’s not a discount on when they’re standing in front of you, but you’re giving them maybe an additional amount of points that they’re now using on their next visit. So they’re not necessarily redeeming it while they’re standing in front of you. You’re now giving them points and a reason to come back next time. So I think that’s to Uwe’s point, why the exit scheduling talk track makes so much sense here. But I dunno if you guys have anything to add. I know that’s the main objection that we get on this front is how we’re looking at discounts and that’s why taking out some of those specific line items or defining that percentage that you’re awarding is so important.
Tom Dorsey (00:40:17):
And so are you recommending that they keep their normal pricing and then they just target the incentives towards the high margin items that they already offer?
Jennifer Thronson (00:40:27):
I mean, they can define what those are. Some shops will only let people accrue rewards points. Maybe it’s even as low as 1%, but again, you’re checking the box, you’re still going to have that talk track available and maybe it’s only a matter of a few dollars, but that could still get somebody to come into your shop versus somewhere else. And you can also define the bonuses I’m saying, so you don’t have to give X percent or dollars off on things. It could be as simple as a free oil change and maybe you’re already doing that today. So it’s really customizable on that front
Jon Belmonte (00:41:04):
And a lot of marketing, it’s incremental benefit. So yeah, sometimes you’re going to get somebody who was not thinking at all about coming in or wasn’t ever planning on coming back to your shop. They get a marketing message or whether it’s loyalty or not and they say, oh my gosh, that’s exactly what I should do. But usually what happens is you get somebody, a typical message could get their interest, maybe they’ll come in, maybe they won’t. The loyalty program often is what might tip them over. They tip them over to the point where they say, now I’m going to do it. Like, ah, I was kind of on the fence, now I’m going to do it. Is that going to happen for everybody? No. Is it going to influence all the customers coming back in your shop? Of course not. But the ones that, here’s what does happen is that, and what I found, and I think most studies out there will tell you that the people who are most likely to redeem those discounts are the ones that really care about it and the ones that it made an impact on, it’s kind of like couponing.
So most of us don’t coupon. So the reason it works for a supermarket to coupon is if we all cut out the coupons and brought them in every single time we went shopping, it would be a huge problem because it’s a very low margin business. But what happens is it’s the people who are most motivated and incented and driven by the coupons who are actually cutting them out and coming in. You’re not worrying about the vast majority of your customers taking you up on this. What’ll end up happening is it’s the ones that mean the most to which also is closely correlated with the people who are probably you’re going to have the most impact on here. That’s like me at the all you can eat buffet.
I don’t know why they always lock the door when they see me coming. It’s weird when you’re in there or on your line, they must have cameras in the parking lot now. I dunno, I love that general sales chicken, Adam, just for some context, Adam’s saying that generally his average annual discount is approximately 1%, so it is low. Wow, okay. I thought Matt Fowler’s got a brilliant point right here though. And he was saying that he would see it more coming out of a marketing budget to account for that expense than from a discount expense, which I thought is a really great way to balance those books and put some goals behind it, put a plan behind it and just call it marketing.
Jennifer Thronson (00:43:34):
I mean it is. So I think that’s a good point, Matt. And to hit on John Long’s point in the chat too, I am not saying that I would recommend that necessarily. I think it really depends on the demographic of people that come into your shop. So I’m just giving really generic answers right now is what we see overall on average, but depending on your customer base, your area, that could vary drastically. So that is something that we’d work with you one-on-one on defining what those best practices are for your shop versus just the general average that I’m talking about today.
Tom Dorsey (00:44:13):
But that is a great point, right, because military folks are transitory, they’re not going to be steep in there forever. And so a lifetime type of rewards program might be less important to them than the military discount that they would receive while they’re there. That’s interesting. Are you able to segment classifications of customers in the database so that you can build campaigns around that classification?
Jennifer Thronson (00:44:39):
Yeah, there’s really three. So retail fleet or commercial and then military. Perfect. So it’ll be defined into one of those three buckets and that’ll be done during enrollment or based on what you already have in the point of sale. So we’d work with whatever the shop is on how they’re tracking that today. But that’s the reason that we have kind of the three buckets and the three different percentages that they can award based on what’s going to be best for them. So I don’t know the correct answer for you, Jon. I don’t know enough, but it seems like we’d probably do something a little bit more focused on your military customers. I don’t know if that would mean you’d get rid of the discounting that you’re doing already or if we would adjust the rewards aspect according to the discounting that you’re doing. So
Tom Dorsey (00:45:25):
We’re giving both buddy thank ’em for their service,
Texas, come on. And Bill did some math and I thought it was really great, and this is a great way to put it into perspective. He’s saying 3% loyalty point adjusted pricing for all customers, 47% of them in role, you end up money ahead. And so it’s just math. And Adam followed up there and is saying that that’s a good point. The reason that he asked that question is one of his main competitors just don’t, and we always get hear this right? New guy comes in, he’s going to start undercutting, he’s going to start discounting everything and he’s going to try to steal business that way. And that’s a risky proposition because you get usually lower service and then they end up coming back to you anyway, and then there’s just more stuff for you to fix. So it’s one of those kind of catch 20 twos. But what he’s saying is that they offer all of these different programs and discounts, but they start out at an inflated price.
So to comment on that, it brings up an interesting point around the way you’re positioning your shop and way you’re positioning your services. So when you offer a discount in effect, you’re reducing the perceived value of what you offer. What you’re saying is when you offer a discount, and again, I fully see the place that discounting has in the marketing mix, but when you discount, you’re effectively communicating, Hey, we need more business, so we’re sending out a discount or we’re offering a discount, or gee, this is maybe a little bit overpriced. We’re going to try to motivate you by giving you some money off. It’s not worth quite what we were originally saying it was worth. When you give loyalty points and you give discounts that way, you’re just sending a different message. What you’re saying is, Hey, you’re paying full price, but for being a good customer, we’re going to give you some credit at our shop.
So it’s rather than devaluing your offering, what you’re doing is you are placing more value on the relationship and saying, I’m going to give you some money for that. Right? It’s a very subtle point, but again, I mean most of marketing really comes down to the subtleties of psychology getting inside the consumer’s head and it just sends a totally different message if you discount or if you offer loyalty points and loyalty rewards, and especially for the returning customers, that’s easy for them to check if my last oil change was a hundred bucks and then I use my loyalty points, if my oil change is a hundred bucks because you charged me one 20 and I still paid a hundred, I’m going to go later. This is a scam. But, and so it really has to show that. I think that’s the crux of it is that you have to prove that that has to be transparent and that has to be an easy perception for somebody to realize is, Hey, I am going to get something for my loyalty, not just a discount off of an inflated price and some magic smoke and mirrors. Real quick also, Jennifer Adam’s asking, do they get a card? Is there something that’s branded that symbolizes their shop or is it noted all in their account in the point of sale and it’s kind of behind the scenes?
Jennifer Thronson (00:48:59):
Good question. There isn’t a physical card or anything like that. The not so great answer is that it depends on the point of sale that you’re using. So if it’s one where we’re actually embedded in the point of sale system, protractor for example, yes, from the customer record or right on an ro, you’ll see that Jen’s in the rewards program. So you’ll know automatically and you can bring up that talk track. In the other scenario, you would need to log in. Usually the customer will say, Hey, I’m in rewards program, I want to redeem my points. So they’ll bring that up, which would get the advisor to log in, look up that information, redeem the points if they need to. But what the exciting thing that we’re working with as part of this merger that we’re going through is the ability that on the today’s vehicle page to actually see right there if they’re in the loyalty program or not. So it’ll be a lot more simple for the advisor to bring that up in their normal course of action as they’re going through the workflow and AutoVitals.
Tom Dorsey (00:49:59):
Awesome. And I got to bring this in from Bill because it’s brilliant. Bill is always brilliant, and of course he’s shining today. Should have met him on the panel. I mean, there’s another room for another box over here to the left, but what he’s saying is, if you miss a service interval, we’re only going to deduct 50 points from your loyalty points. And I mean in reality, I think that if that gets tied in or if that becomes I think an accepted practice, I think that’s really smart because it’s a taking away something that you haven’t really given, but it says to them that this is an important thing that I need to do to maintain it. It was just like we were talking with Brittany last week about how she does this through her warranty program. They got this extended warranty, and as long as you’re coming in, then that warranty’s enforced.
As soon as you don’t, your warranty goes away. So it’s a way to capture them to know that there’s a follow-up already scheduled. It’s assumed and required. So I thought that was really great, Bill. Go ahead, Jon. Well, yeah, and I was going to say, and there’s like everything, there’s a couple of different approaches. You can take that approach. You can take a similar approach, which is when you come in for four service sessions in a row or intervals in a row, then you get double points for the fourth one. So you reward somebody for the consistency of being in hitting their intervals three or four or five times in a row. So yeah, lots of approaches. I mean that’s the beauty of the tools, which is the primary limitations aside from maybe some of the artificial intelligence elements, the limitations of the tools are your imagination or really how you want to go about doing it.
And again, it goes back to before, if you want the physical, if you want physical cards, you can take the time to, you can export and print and that type of stuff. But most folks find that the digital is just going to work just fine. Man, I can’t believe we’re running short on time already. I thought I was going to have to drag you guys across the finish line on this thing, but no, I mean I need another hour. This is incredible. So real quick, I want to cover a couple of things. I’ve got a follow up for you, Jon, from John Long about the military discussion we were having. He’s saying yes and no with the military discount, you’re telling them that you value them. The military talk among themselves and he hears it time and time again that they come to us to start because they have the military discount to them.
Having that is more valuable than a rewards program that they may not be able to fully use. Totally, yeah, that makes sense. Kind of an exception, right? Yeah. And I think, again, very few things in business or life are black and white and that kind of lives somewhere in the middle, which is it’s not going out and saying, Hey, we’re just discounting our services because we need to, it’s actually going out and saying, Hey, here’s a special group of customers or potential customers and we want to treat you extra special. We really want to show you our appreciation, therefore we have this military discount. So I agree with what he’s saying, 150%. I think it’s more a matter of the broader discount, the general labor day or whatever the case. I think you start to get into more of a gray area there. Give ’em both, Jon, you can afford that buddy. So real quick, Phillip, to your question, Jennifer had mentioned earlier in when we were kicking off about 47% on average enroll, but that also keep in mind that includes folks you haven’t seen in a while.
Some not active customers. That’s the whole raw database. So that’s actually, I think that’s a really huge percentage. It’s probably 6 65, 70% of active customers, something like that. So it’s something to at least consider, give it a shot. Frank Scando is saying it’s not a discount program, it’s a retention program. And that’s exactly it. The crux of it, Frankie, is that it has to be perceived as that, and that has to be, the messaging and discount should probably be eliminated from your vocabulary so that you don’t even slip up and say it one time because it’s not folks, we got to get into the future stuff. We have to hear about what’s coming three minutes, if that’s okay, because I want hear, and I think Jon, I think what I’d like to hear from you, Jon, is just kick us off and kind of give us some background on how this came about and why this came about.
Why do we bring BayIQ in and what do you see as the value currently and where do you see this being able to go in the future? Yeah, well the, I’ll skip the part where I spent a year begging Jennifer to and her company to join AutoVitals. So I’ll leave that part aside, but lemme take a quick step back and I’ll tell you in a couple of minutes why I think that AutoVitals is a shop owner’s best friend and how it ties into this discussion. So in order for a shop to meet all its goals, it really needs two types of software. It needs a point of sale or a shop management system, and then it needs what we call a shop success solution. Everybody knows what point of sale is, so order your parts, manage your inventory, all your invoicing, tie into accounting and payroll.
Basically all the basic and essential functions of running a shop. You got to have a point of sale to run a shop. It’s like a building, no building, no shop, no point of sale. Pretty tough to run a shop, but if you really want to drive profitable growth, then you need more than a point of sale solution or a point of sale software. You really do. So when I think about the profitable growth formula, there’s kind of three things there. You got to maximize your car count, so you got to get as many cars in as possible. And yeah, attracting a new customer through your website or your marketing is really important. But as we’ve talked about for a lot of the time here, more important is to bring back your existing customers, bring ’em back more often, and sell ’em more work. Okay, so that’s the first piece is your car count.
The second obviously is you got to drive up your ARO on every car that comes in that really is digital inspection tools, a bunch of other things. And then you also have to make sure that your operation can efficiently handle all that car count and all that work. And that comes down to keeping your base and your technicians super busy. So for us, and going back to your question, we pioneer DVI clearly, I mean, in my opinion, we clearly continue to have the most impactful tools out there. We’re the only ones that offer a real workflow solution that makes a big impact on how the shop runs. And it’s really what we’re known for maximizing what you get out of your bays and your technicians. And we’ve got this awesome new website offering, which is, it’s pretty much an appointment machine and we’ve got awesome data on it and the results are really great.
But if I’m being honest, our loyalty rewards program, so in part our customer retention tools, our CRM is good and was good, but our loyalty program and our retention tools, it was just average. And that’s why we asked BayIQ to join AutoVitals is we were told over and over and over by shops and by partners that worked with both of us that BayIQs hands down the best loyalty and retention program in the automotive aftermarket and philosophically we’re super aligned. So we want to have a huge impact on the shop’s results, but we want to be really easy to use. And we heard that. I mean, that was an area when I think of that phrase that came up over and over and over with all the customers that we talked to about them. And as importantly you’re building a company like this, you got to be like-minded and the team over there is a plus.
And I’m really glad that all of ’em decided to stay with AutoVitals as we combine the companies and long-term. So we just thought this was a great opportunity. We know we’ve brought our A game in all these different areas and this is an area that we want to do enhance. And we’ve gotten great interest from the BayIQ shops on the other core AutoVitals tools and how do we start to use them and what’s the integration going to look like? How easy is it going to be for us to use them? And we knew we’d be able to figure that part out. It’s kind of the easy part, right? Bringing the companies together was what took some work and here we are. Yeah. And to that point, Eric Sewell’s asking, I mean, he goes right to the point. That’s what we love about you, Eric. So what specials are you offering on BayIQ software for existing AV shop users? Well, I mean clearly, well, we haven’t fully defined that, but clearly when we do, we’ll do it in a loyalty format. So we’ll obviously look at either how long you’ve been a client or how long you’re committed to us. And I don’t know, I’ll largely defer that to brilliant Jen. Brilliant.
Jennifer Thronson (00:59:24):
I’d love to chat with you Eric. We don’t have a super solid answer. The real thing is kind of depends on all the things that Jon just mentioned, also the point of sale system that you’re using today.
Jon Belmonte (00:59:38):
But there will be a discount for using all the tools.
Jennifer Thronson (00:59:42):
There certainly will. Yeah. Again, I’d love to chat with you, Eric, about it and really anybody that’s going to have feedback as we kind of go through, we’ve got some obvious overlap and so that’s something that we’re defining right now internally, but always looking for that feedback along the way as well
Tom Dorsey (00:59:59):
Along. And so Jennifer, if folks want to do that, how do they get ahold of you? Is there a landing page they can go to? Should they just talk to their advisor? What’s the process?
Jennifer Thronson (01:00:08):
Great question. I would encourage you to talk to your advisor and then they will put you in contact with us to go down that path.
Tom Dorsey (01:00:14):
Awesome. And you can always pop it into the Facebook forum as well too. I’m sure we’re going to be starting some threads on there and they’ll get some really good discussions because more than anything to folks, we want to hear your success stories, right? Post ’em up on the Facebook forum. We really want to hear that stuff because yeah, it’s great to brag and it incentivizes and it helps other shop owners, it helps your peers to make that leap, but it gives us the insights and how we can kind of craft this and mold this to be even more effective for you in the future because we know most things, but not everything Uwe. Before we get out of here, I can’t believe we’re already at a minute over. I mean this is incredible. I want another hour. Give us your thoughts Uwe, if you could just around, because I know you got ’em cooking. Where do you see, as we get this integration hammered out, where do you see this progressing? What next big innovation do you see you working on with this tool?
Uwe Kleinschmidt (01:01:19):
I mean, first Jen mentioned it already. We have to make it easy for the service advisor and easy for the motorist. And luckily through the digital inspection and workflow notification, we have plenty of touch points with motorists to really get the value across in case so as advisor didn’t mention it at drop off or the motorist overlooked the flyer or just dropped it off in the morning and talked to nobody. Right? So I think that’s the absolutely first step, make it easy for the service advisor and for the motorist integrated, as Jen said, in the TVP, in the smoothest way possible. And then the next step I think from my perspective would be all around the discussion of the last 45 minutes, which is how to avoid that it is a perceived discount program, whereas it becomes a retention program where rewards are given two things which really reward a high frequency maintenance or high maintenance visit frequency, right? For example,
Tom Dorsey (01:02:44):
I’m sorry to interrupt. Do you see US canning kind of campaigns like we do in the campaign manager to where it’s just out of the box set up to incentivize that maintenance return visits?
Uwe Kleinschmidt (01:02:56):
Yes. So I mean there’s so many options. One I can think of immediately is we have already the can job scheduler. When you mark your maintenance visits which are overdue and remind them that with the loyalty point program you can get even a higher value out of it, that’s a great combination. But the same is true for campaigns for people who have a stack load of points and want to use them, just send a campaign to the ones who have collected it and don’t even know it exists and so on and so forth. But I think really the key is to go back to the initial idea of the loyalty point system. Use any and every opportunity to link the rewards to maintenance services. I think that’s the big draw for shops.
Tom Dorsey (01:04:02):
Yeah, that’s the butter on the bread. No doubt about it.
Well, I got to tell you, this was fantastic, Joe. I mean, great engagement. I really appreciate everybody’s comments and questions and input. I know these folks do as well. And I know that it just goes into, just like Uwe said, he’s going to take the last 45 minute conversation and get to work. And the more that you contribute that way a coming on the show, participating in the show, participating in the Facebook forum, signing up in the Facebook forum, getting your friends into the Facebook form so we get the more input and experiences helps us to learn and provide better service for you. Really appreciate it. Thank you very much, Jennifer Thonson. I mean, that was fantastic. Really excited about what’s coming out next. Really excited to see how this evolves over time. Awesome. Jon Belmont, that you’re providing more value and services to folks from what they’re already getting without them having to do a lot of work.
And just stay tuned folks, and we’ll be putting out more information on how you can get involved and how you can take of this in the days and weeks coming. And of course Uwe just excited to see what comes out of that brain of yours as far as how we, because we never take anything and just use it as is. We’re always looking at how do we innovate it and make it the next best thing for tomorrow. And there’s a lot of loyalty point stuff out there, but through AutoVitals, I guarantee you’re going to get a product that is world-class and light years, well, maybe not light years, but day years ahead of where everybody else is. So thank you very much for coming on. Thank you very much for your time and attendance folks. Tune in next Wednesday, same time, same place. And we’ll have another great discussion with shop owners. We’re going to be talking about some success stories, so you don’t want to miss that with not just success stories, but actually how to achieve success stories. And those are the best kind. Thanks a lot. That was great. Thanks everybody. Thanks for hosting, Tom. Thanks for having us. Thank you. You have a great day.

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