Open new doors to future Vehicle Service Contract sales
Transform missed opportunities and expiring warranties into VSC sales by adding Direct Marketing to your lifecycle marketing strategy.
More than a decade of data shows that people are keeping their cars longer.
In 2012, the average age of a passenger car on the road in the U.S. was 11.2 years. In 2024, it was 14 years. Combining light trucks and passenger vehicles, the average vehicle age in 2024 was 12.6 years.1 This trend creates a significant opportunity to generate revenue through the service drive.
Statistics show that approximately half of consumers do not opt for a service contract at time of sale.2 But with a consistent post-sale marketing strategy, you can offer the opportunity to reconsider the purchase, helping ensure greater peace of mind through vehicle protection.
In 2019, Zurich launched a Direct Marketing program in collaboration with CARCHEX, making it easy for dealerships to add an additional touchpoint to their lifecycle marketing strategy. Lifecycle marketing is designed to positively influence customer behavior as they journey through each stage of vehicle ownership, from brand awareness through dealership loyalty.
Zurich’s Direct Marketing program is an effective way to reach out to vehicle owners who either did not purchase a VSC at time of sale or are approaching the expiration of their current warranty or VSC. Incorporating our Direct Marketing program into your lifecycle marketing strategy allows you to maintain consistent communication with your customers. This not only helps increase service contract sales and visits to your service department, but also makes customers feel valued and supported by your dealership throughout their vehicle ownership.
Our Direct Marketing program has expanded to more than 500 dealerships across the U.S. This data-driven program, available to eligible customers at no cost, takes a multi-stage approach to seizing missed VSC opportunities:
- Dealership-branded mail is sent to targeted customers.
- Inquiries are addressed by a team of professional, dedicated call center agents who exclusively service Zurich accounts. These agents receive Zurich-specific product and process training to help ensure best-in-class customer service.
- Customers who decline to purchase on initial contact are placed into a strategic follow-up system.
- Contracting, financing and documentation delivery is managed on the dealership’s behalf from start to finish.
- Once the program is set up, it is a turnkey service for our dealer customers. There is nothing more to do, other than watch your portfolio grow!
Simple? On the dealership’s end, yes. That’s the whole mission of Direct Marketing — ease of use and improved results. Making it work requires great teamwork between Zurich and CARCHEX.
“Zurich has a very thorough underwriting and due diligence process in all their business collaborations,” said Tom Stratchko, EVP of Operations for CARCHEX. “They identified CARCHEX as the right company to help develop this program. We’re constantly working with Zurich to find ways to further improve it.”
“What makes this program unique is the amount of involvement Zurich has,” Stratchko continued. “Most other direct marketing programs are handled by an independent sales organization with little to no interaction with the administrator itself. This is a program that Zurich has spent the time and effort to help protect dealerships from a profitability standpoint, on the underwriting side and in the sales process.”
Along with reaching customers who declined a VSC at the time of their vehicle purchase and those with expiring contracts, leveraging service data is another key value in the Direct Marketing program.
“Figuring out how to monetize service customers for F&I has been a hot topic among dealers for some time,” Stratchko said. “Service data creates about 57% of all the sales from Direct Marketing.”
“We’re using the data to identify customers who buy their vehicle from the dealer, but do not use that dealership for service,” he continued. “We have a targeted campaign actively seeking those customers out, letting them know the dealership has opportunities for them to protect their vehicle. We’re seeing good success with that. About 10% of the sales that come from the program are now being driven by this segment of customers.”
The direct mail campaign may turn into a sale via the call center, but since launching the program, many dealers have shared that the letters have spurred customers to return to the dealership to finalize the purchase. Dealerships enjoy 100% retention of these walk-in sales. Where some other direct marketing programs only offer a commission benefit on walk-ins, Zurich also ensures vehicle protection products can be counted towards a dealership’s reinsurance.
Beyond all the quantifiable benefits of Zurich’s Direct Marketing program, its greatest value may be in simply providing that additional touchpoint for the dealership. As Stratchko pointed out, “Consumers who may have passed on a contract at the time of a vehicle purchase may be in a different financial position now. This program allows dealerships to reconnect with them at that right moment.”
- Fitzgerald, Jack. “Average Age of Vehicles in U.S. Continues to Rise.” Car and Driver. 23 May 2024.
- Huetter, John. “Survey: Why car buyers get service contracts.” Automotive News. 2 September 2023.
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