Ford Motor Credit Co. in 1999 will scrap the traditional coupon book used by more than 5 million auto loan customers in favor of monthly statements stuffed with 'relationship marketing' opportunities.
Besides a monthly invoice, the Ford Credit statements will include extras such as discounts on accessories and vouchers for oil changes at the selling dealerships.
Ford also will be able to include specially tailored messages with the monthly invoices. For instance, customers about to pay off their loans could get a message encouraging them to look for a replacement at their local dealership.
Bernard Silverstone, Ford Credit director of marketing, said in a telephone interview that the company is launching a pilot program to decide which coupons, or which messages, play best with customers and when to send them.
'Clearly, this is a marketing-driven perspective,' he said. 'With a coupon book, with some of our best customers, we may never hear from them (except to receive payments) for three or four or five years. This allows us to be more proactive.'
At the same time, he said, Ford Credit is anxious to avoid overdoing it.
'This is not about creating a mail bridge, where we bombard the customer with so much stuff they can't be bothered going through it all,' Silverstone said.
At first, only new customers will get monthly statements. But by the end of 1999, all Ford Credit loan customers will get them. That represents about 5.3 million customers in the United States and Canada, Silverstone said.
Ford Credit lease customers and subprime buyers at the separate Fairlane Credit subsidiary already get a monthly statement.
International Billing Services, the El Dorado Hills, Calif., vendor that will handle the Ford mailings, already processes nearly 80 million billing statements a month for customers in other industries, such as cable TV and cellular phone service.
Ford Credit is its first auto lender, but the company is pitching others, said Tom Roberts, marketing vice president.
Mailing a monthly statement costs more than having people tear out a coupon and mail it in. But the monthly statements offer certain cost savings, too, Roberts said.
For instance, payments on a monthly statement arrive in a standard-sized envelope, which can be read and opened by a machine. People mailing in a coupon use their own envelopes.
Depending on volume, it costs 10 cents to 18 cents to open a standard-sized envelope by machine and enter the data into a computer, according to International Billing Services' experience in other industries.
Exceptions, such as oddball envelopes that have to be opened by hand, could run the cost up to 20 to 35 cents, said Mark Masterson, International Billing Services' director of new business development.
Silverstone said Ford also expects to save in other ways, such as cutting down on separate mailings that will now be included in the monthly statements. He said monthly statements also should cut down on people calling Ford Credit simply to verify their balance or to make sure their last payment arrived.