Chrysler Financial Establishes Customer Loyalty Program

By Jennifer Reed, Online Editor
June 20, 2006

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AUBURN HILLS, Mich. (June 20, 2006) -- To enhance communications throughout all facets of its business, including dealers, customers and corporate staff, Chrysler Financial recently launched a Customer Loyalty Advantage program for vehicles coming off-lease. Six months into the pilot, executives said they have already seen an increase in customer loyalty by up to 20 percent and will soon rollout the program nationwide.

According to Eckart Klumpp, vice president of remarketing for Chrysler Financial, the company introduced new brochures for dealers and customers to create a customer-focused process and increase brand loyalty.

"We'll achieve these by being fully integrated with dealers and the manufacturer," he explained. "We want to make the turning in process very simple so customers understand what kind of cost is involved. They receive a communication (brochure) from us a few months before the end of the lease (reminding them of damage and mileage charges) and reminding them they need to call us up and schedule an inspection. We want to take the uncertainty out of the turn-in process."

Referring to customers who haven't been through the process before, Klumpp said, "For the first time, they need a bit more hand holding. We want to take the complexity out of the lease process."

The brochure, which is sent out to customers prior to lease turn-in, is called "Turn in One, Drive Away in Another." The pamphlet offers the credit card test. It provides consumers with a faux credit card and explains that any damage which the card covers is not chargeable, with some exceptions. Along with other information, it reminds the lease customer that he needs to set up a vehicle inspection prior to turn-in.

Meanwhile, the dealers are also receiving new materials from Chrysler Financial called "Keep Your Customers Coming Back. Loyalty."

"The enclosed materials will give you a look at the many tools Chrysler Financial provides," the leaflet tells dealers in the introduction. "Our tools are designed to increase customer loyalty by driving customers back to your dealership. This helps you sell more vehicles, while strengthening residuals and enhancing future profits.

"With Chrysler Financial's extremely successful lease portfolio, our yearly lease maturities are coming in fast and furiously," the brochure states. "That makes it especially important for us to work together toward industry-leading remarketing processes, so we can make the most of each and every opportunity."

Fully aware that higher customer retention equals more sales, Chrysler Financial created the Lease Loyalty Advantage for dealers to do just that. The goal of this program is to convert maturing lease customers from prospects to qualified Hot Leads. The loyalty program is designed to integrate with a dealer's current customer retention and lead management process. It boosts sales by contacting current lease-end Chrysler, Jeep and Dodge customers, and provides them with brand product information to drive them back to a dealer's store for their next purchase or lease.

"Simply put, Lease Loyalty Advantage will help your dealership increase loyalty and re-deliver the customers that you have worked so hard to delight," according to the materials provided to the dealers.

How exactly does this loyalty program work? Chrysler Financial said lease loyalty advisors contact the returning lessees by phone. After this communication, the advisor sends Hot Leads and Competitive Alerts to dealers to make them aware of customer intent. Each dealer follows up by making an appointment with the customer and sets up new-vehicle delivery and electronic grounding of the off-lease unit. After this transaction takes place, the lease loyalty advisor contacts the dealer to learn the outcome. Success is measured by Hot Lead close rate, lease loyalty (loyalty to the automaker) and Chrysler Financial loyalty.

"Our program advisors are talking to customers to give superior customer experience," Klumpp said. "Dealer relations managers have been going out into the field and speaking to dealers to explain this program and the pilot."

These managers explain the benefits of the new program, including upstream remarketing, which gives the grounding dealer first crack at purchasing high quality off-lease units for his pre-owned and certified inventory, Klumpp explained.

When grounding the vehicle, the dealer utilizes E.L.V.I.S. (Electronic Lease Vehicle Inventory System), which also gives the dealer the first opportunity to purchase an off-lease unit when it is returned to his dealership.

"For the first 72 hours, the grounding dealer has an exclusive option to purchase via E.L.V.I.S.," the brochure informs dealers. "During the next 18 hours, vehicles are sold only to Chrysler Financial dealers through Web E.L.V.I.S. in three separate six-hour closed auctions. In the final 18 hours, vehicles are sold to all AutoTradeCenter dealers in three separate six-hour open auctions."

"ATC's iDEAL gives dealers another way of liquidating aged inventory," Klumpp highlighted.

How can this online system benefit a dealer? According to Klumpp, E.L.V.I.S. offers two tools to assist dealers in better managing their pre-owned inventory. The first feature is an electronic Find Vehicle search engine that notifies users by three methods that the vehicles they want to purchase for their inventory is available. In the second feature, a Proxy Bid gives dealers the opportunity to establish the price they want to pay for a unit, and it performs automatic bidding on a vehicle up to the set limit. This means dealers don't have to sit in front of the computer when an auction is taking place, Klumpp said.

In order to free up space on a dealer's lot once an off-lease unit has been grounded, Chrysler Financial said it has created marshalling yards to house the vehicles until they are sold to another dealer or sent to auction. By utilizing these marshalling centers, Chrysler Financial said it can ensure a comprehensive, consistent and accurate inspection of all vehicles, reduce arbitrations and make sure the right vehicle mix is sent to the right auction.

Commenting on the new loyalty program, Mark Raymond, business development manager at Buerge Chrysler Jeep, wrote to Chrysler Financial executives, saying, "I just wanted to send you a note to let you know how pleased we are at Buerge Chrysler Jeep with the Chrysler Financial Lease Loyalty program. This program has turned a relationship that we used to consider to be more competitive and adversarial into an effective sales partnership between our dealership and Chrysler Financial.

"We appreciate how we are now all working together, with the goal of trying to get our lease renewal customers into a new vehicle by sharing information and resources," he continued. "It has clearly helped to increase our new vehicle sales. This is truly a perfect example of a win-win partnership."

Echoing Raymond's comments, Klumpp said improved competition and teamwork is exactly what the new program is designed to do.

Based on the first six months of the pilot, Klumpp said, "The increase we saw in loyalty is really nice. We've seen great success. The new program is very helpful and customers like it. It makes dealers and customers feel like we care, they aren't just another number. We've heard great dealer testimonials about the program.

"Remarketing is a lot more than just selling assets. It includes the finance brand as well as dealer body. We're working to give our business a competitive advantage," Klumpp concluded.

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