How PSA grew sales by launching the first rewards scheme for local garages

PSA Group, which manufactures brands including Peugeot, Citroen and DS Automobiles, wanted to re-engage local garages with the brand as it looked to boost its share of the £21.6bn aftermarket sector.

PSA Group Perks scheme

Selling parts to local garages so they can repair cars is hardly the most glamorous aspect of the auto industry. Yet with an average car comprised of more than 30,000 components, the UK aftermarket, as it is called, is estimated to be worth £21.6bn a year by trade body the Society of Motor Manufacturers and Traders (SMMT).

It is also a hugely competitive market. It was disrupted in the late 1990s by the arrival of national ‘motor factor’ chains and local companies offering cheap parts for all makes of car. This made it easier for local garages to get hold of parts because they only had to use one company to source components for any make or model of car.

This eroded the dominance of the car manufacturers, something PSA Group (which manufactures cars for Peugeot, Citroën and DS Automobiles) recognised. It had a range of challenges, from the fact that genuine parts carry a premium, to the unpredictable nature of when and where parts might be needed, and that only one in 10 cars a local garage services or repairs will have been manufactured by PSA, making behaviour change difficult.

But PSA wanted to change local garages’ behaviour so they would call PSA when they needed a part. To do that, it needed to find something interesting or motivating to talk to its customers about and so it came up with the idea of a rewards programme, which won the Automotive Award at the Marketing Week Masters Awards.

READ MORE: Marketing Week Masters Awards 2018 – The sector winners

Through customer research, PSA and its agency RLA Group identified that incentives were popular, an attitude started by Pirelli and its infamous calendars in 1963. To harness this, it designed a car manufacturer trade loyalty programme called Perks that it hoped would overcome market dynamics by giving a reason to call and desire to repeat – building loyalty and driving sales.

Perks offers customers a point for every £1 spent, with those points then available to spend on Amazon. That also helped overcome the price premium because higher prices meant greater perks.

To get the message out, RLA built a bespoke data tool integrating PSA systems, agency ad tech and third-party data so that every local garage had its own unique identifier. This single customer view enabled Perks to automate points and send out relevant communications through personalised emails.

Algorithms were designed to deliver bespoke incentives to encourage customers to buy from additional categories. And smaller companies that might not earn enough points to make the scheme worthwhile were entered into weekly and monthly competitions.

PSA also wanted people to interact with the brand outside of making a purchase so it built personalised dashboards for every customer so they could check their points status, see current competitions and offers, and redeem rewards.

To measure effectiveness, RLA and PSA undertook a 12-week pilot study to measure sales growth among four participating parts distributors, while a post-study focus group gave feedback on preferences and motivations. The programme was then launched in June 2017.

Success was judged on email open rates. Prior to launch levels were typically between 12% and 14% but after the launch of Perks open rates averaged more than double this and in some cases reached 70%. After the first six months, a survey was sent out with 76% of respondents saying they were “very satisfied” with the programme and more than a fifth saying they had bought because of Perks. An NPS score of 35 is deemed excellent for the sector.

The ultimate test is whether it led to longer term sales increases. Among Perks members, sales have outperformed non-members every month, while sales saw double-digit growth amid a downtown in the wider market. This has been fuelled by customers buying from a wider range of categories – an average of 13 since launch compared to 8.8 for those not involved in the scheme.

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