Case Studies > Service Center Wheel Alignment Coupon

Service Center Wheel Alignment Coupon

Customer Company Size

Large Corporate

Region

America

Country

United States

Product

APT Test & Learn software

Tech Stack

Business Experimentation Software
Data Analytics

Implementation Scale

Departmental Deployment

Impact Metrics

Revenue Growth
Customer Satisfaction
Productivity Improvements

Technology Category

Analytics & Modeling - Predictive Analytics
Analytics & Modeling - Real Time Analytics

Applicable Industries

Automotive

Applicable Functions

Sales & Marketing
Business Operation

Use Cases

Predictive Replenishment

Services

Data Science Services
System Integration

About The Customer

The customer is a large chain of auto service centers that provides various automotive services, including wheel alignments. The company is interested in leveraging promotions and coupons to increase customer traffic and drive incremental business. With a significant number of locations, the company aims to understand the effectiveness of its marketing strategies and optimize them for better profitability. The auto service centers cater to a diverse customer base, including both new and loyal customers, and operate in various competitive and income-diverse areas.

The Challenge

A large chain of auto service centers wanted to use coupons to drive traffic to its locations. The company offered targeted coupons for its wheel alignment service, redeemable during a month-long period. The challenge was to determine if the promotion drove incremental transactions or merely subsidized existing purchasing behavior. The inherent noise in daily invoices data made it difficult to isolate the coupon's impact, complicating the understanding of whether the coupon was driving new business or just giving away money to customers who would have purchased anyway.

The Solution

The auto service center utilized APT’s Test & Learn software to analyze an in-market business experiment measuring the impact of the targeted wheel alignment coupon. The software compared 'test centers' that distributed the coupon to 'control centers' that did not, isolating the incremental impact of the promotion. The analysis revealed a 12.1% increase in wheel alignment invoices during the redemption period without a pull-forward effect in the following month. However, the increase in invoices did not offset the decline in margin per transaction, leading to a moderate overall margin decline. Further analysis showed the coupon was profitable due to a significant increase in rest-of-basket margin, driven by new customers. The software identified service center attributes associated with higher invoice lifts, such as competitive areas, lower income areas, and fewer past promotional events. APT software then generated a list of service centers predicted to respond best to the coupon, enabling targeted future rollouts and driving an incremental $1.6MM in annual margin.

Operational Impact

The promotion generated a 12.1% increase in wheel alignment invoices during the redemption period.
There was no pull-forward effect in the month following the promotional period.
The targeted coupon led to a significant increase in rest-of-basket margin.
The lift in invoices was driven largely by new customers, while it subsidized existing purchasing behavior among loyal customers.
APT software identified service centers in competitive areas, lower income areas, and those with fewer past promotions as having higher invoice lifts.

Quantitative Benefit