AutoXray: Loyalty Programs

In the entrepreneurial world of startups, getting and keeping your first few customers is critical to your success.  Some of things we pride our selves in doing well at GD Mac is building programs that create meaningful interaction with your customers.

One successful program we implemented was an upgrade program for current AutoXray customers. AutoXray’s products were a new automotive technology that ran diagnostic scans on automobiles that had their check engines lights on.  The AutoXray scan tools were being upgraded to accommodate a new platform that would enable them to work on newly introduced vehicles with the new standards that the U.S. government had recently imposed upon the industry.

Competitors forced their customers to purchase new tools with no discounts, as their existing tools would no longer work with the new standards.  AutoXray, on the other hand, was trying to break new ground, keep their customers happy and use their evangelical customer base as a marketing asset.  The AutoXray program included a very cost effective trade-in program that enabled customers to get an upgraded unit with the new technology - after paying a nominal fee and sending in their old device.

The goal of this program was to get the new technology into the hands of current users and to begin a positive viral marketing campaign, instead of using the new platform as strictly a money-making venture as implemented by their competitors.

This program had unprecedented results.  The 1st trade-in offer brought in more than a 60% response.  The risk paid off, AutoXray had its evangelists on the new platform touting the accolades and value of AutoXray’s great new product.  These customers were extremely loyal to the AutoXray brand and very vocal about the products.  AutoXray adopted this trade in program as it standard operating procedure, making them the most affordable and widely accepted trade-in programs in the automotive aftermarket.

When GD Mac first began their relationship with AutoXray, the user database represented a 10% registration rate for every product sold. Our goal was to improve registration rates and begin promoting new products and ideas to the registered users. 

Our first effort was to redesign the registration card.  At this time, the industry standard warranty was one year.  We wanted to give something tangible to the customer for registering their products. AutoXray did not have a great deal of warranty claims and increasing the length of the warranty was of great benefit to the customer. We developed the following three tiered program that just about everyone could benefit from, even the people with out internet access:

• Register online and you will receive a three year warranty.
• Register by mail you will receive a two year warranty.
• No response received the standard, one year warranty.

This program was introduced as AutoXray’s products were just appearing on the shelves of one of the top three U.S. automotive retailers. Initially, the registration rates exceeded 25%; this number would eventually grow to near 40%, with most of the registration information being submitted online.  It was a great value for the customer and it saved data entry time for Autoxray. AutoXray registrations and upgrade participation rates were the highest in the industry.

AutoXray warranty claim rates remained unchanged so the extended warranty time had negligible impact on the company’s bottom line, yet the perceived value by the customer was significant.

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