I have been doing regular blogs about successful promotions in dealerships that come to my attention. In this blog I wanted to let you know about a Prepaid Maintenance Plan (PPM) promotion that was extremely successful at Hare Chevrolet.   Hare Chevrolet has improved customer retention and increased its Customer Pay RO count by 12% since instituting a dealer branded Prepaid Maintenance Program (PPM) earlier this year. The program, which launched in March, and is dealer administered, has produced an average of $171 up-sell on every customer pay Retail Repair Order.   The dealership is in a highly competitive market place surrounded by four after market repair shops. The program has helped the dealership come out on top of its competition by ensuring service customers return to the dealership for future vehicle service needs.   The program, which focuses on selling maintenance plans to existing customers in the service lane, was kicked off in March w...

  Dealerships with the most effective loyalty programs drive results in five key areas: marketing responsiveness, sales-to-service conversion, service visitation, retail member spend and member repurchase intent.   This is the final blog in a five-part series where I explain how loyalty programs improve each of these metrics. Last week I touched on retail member spend.  This week’s topic is member repurchase intent.   This metric measures the number and percentage of loyalty program members who purchased their second vehicle from the host loyalty dealership. Dealers say that loyalty programs, which allow members to apply their rewards dollars toward vehicles purchases, truly work. Driving repeat sales is easier when using incentives redeemed from an existing customer base.   An analysis of member repurchase habits in 72 dealerships with loyalty programs revealed the following:   ŸAverage number of member new vehicle re-purchas...

  Dealerships with the most effective loyalty programs drive results in five key areas: marketing responsiveness, sales-to-service conversion, service visitation, retail member spend and member repurchase intent.   This is the fourth blog in a five-part series where I explain how loyalty programs improve each of these metrics. Last week I touched on service visitation.  This week’s topic is retail member spend.   Member spend is viewed as money that loyalty members actually spend in a dealer’s service department, both by individual RO and by annualized spend. Visit frequency is one key component, but perhaps more important is wallet share.   When we compared member spend vs. non-member spend rates across 72 dealerships, the results were significant:   Ÿ Average non-member per customer pay RO: $191.32 Ÿ Average member spend per customer pay RO: $235.01 (an increase of $43.69) Ÿ Annualized total non-member service spend...

  Dealerships with the most effective loyalty programs drive results in five key areas: marketing responsiveness, sales-to-service conversion, service visitation, retail member spend and member repurchase intent.   This is the third blog in a five-part series where I explain how loyalty programs improve each of these metrics. Last week I touched on sales-to-service conversion. This week’s topic is service visitation rates.   Service visitation measures the rate at which loyalty program members are visiting the dealership’s service department for customer-pay retail transactions. Members’ visitation rates were then compared to that of non-members during the same period of time. Here are some of the results:   Members have an average of 4.26 months between service visits, compared to an average 6.82 months between visits for non-members.   Members visits service departments an average of 2.82 times per year, compared t...

  Dealerships with the most effective loyalty programs drive results in five key areas: marketing responsiveness, sales-to-service conversion, service visitation, retail member spend and member repurchase intent.   This is the second blog in a five-part series where I explain how loyalty programs improve each of these metrics. Last week I touched on marketing responsiveness. This week’s topic is sales-to-service conversion.   Sales-to-service conversion measures first-time service visits that are retail in nature (warranty transactions excluded). This metric looks at customers who enrolled in a loyalty program after a vehicle purchase and returned for a customer-pay service visit. These results were for first-time visits only:   Average percentage of customers who visited service within 60 days of vehicle purchase: 11.44% Average percentage of customers who visited service within 61-90 days of vehicle purchase: 12.73% Average percent...

  Dealerships with the most effective loyalty programs drive results in five key areas: marketing responsiveness, sales-to-service conversion, service visitation, retail member spend and member repurchase intent. This blog will address the first of these: marketing responsiveness.   In a recent study, we tracked 14.8 million loyalty-based marketing communications and matched those communications to specific labor operation codes in the dealerships’ service DMS. Here are the results:   Average number of unique loyalty-based communications sent by dealer every month: 6.36 (Note that not all members received every communication.) Average number of individual loyalty-based communications sent per month, per dealer: 32,643 Average number of service appointments derived from loyalty communications per month, per dealer: 177 Average number of loyalty communications required to garner one service appointment: 184   Knowing how many comm...

  Two weeks ago I posted a blog on this site detailing hard facts, numbers and results from dealerships’ loyalty programs. But sometimes facts aren’t enough and dealers want to hear what other dealers are saying.   In our latest ebook, titled “The Hard Facts and Financial Impact Report: Auto Dealership Loyalty Programs & The Effects They Have on Profitability,” we analyzed results from 72 dealerships using customer loyalty programs to retain service customers. The ebook offers evidence that loyalty program members spend three times as much as non-program members in the service department, with twice the number of annual service visits.   But even more important, here’s what several dealers are saying about their service rewards programs:   Tom Wood Ford in Indianapolis started enrolling customers in a rewards-based loyalty program in 2007. Its member service visitation and spend ratios are in line with the study aver...

  A couple of weeks ago, J.D. Power and Associates released a report titled “Beyond Satisfaction: J.D. Power 2012 Customer Service Champions—Brands That Deliver Service Excellence to Maximize Business Results.” The report concluded that consumers prefer brands with excellent customer service and don’t always focus on the lowest price. Auto related brands identified as “Champions” include Cadillac, Jaguar, Lexus and MINI.   Why is customer satisfaction important? J.D. Power finds a very strong link between levels of customer satisfaction and levels of customer recommendation and intent to repurchase. The report also finds that brands that provide exceptional customer service tend to consistently employ these specific practices:   Hiring the right people and empowering them with the best processes; as well as the ability and authority to make judgment calls to resolve issues on behalf of customers.   Understan...

  Do customer loyalty programs work? A popular national chicken franchise spends more money on its loyalty program to retain customers for its $2 sandwiches than most dealerships spend to retain customers for $60,000 vehicles purchased from them. Does this make any sense? Yet I hear all the time from dealers who are unsure about the benefits of customer loyalty programs and want to see hard facts about the ROI. Well, now they can. In our newly released, free ebook titled “The Hard Facts and Financial Impact Report: Auto Dealership Loyalty Programs & The Effects They Have on Profitability,” we analyzed results from 72 dealerships using loyalty programs, along with over 6 million repair order transactions over a period of 26 months. Here are some of the findings. Members of loyalty programs in dealerships: - Visit their service department every 4.26 months versus every 6.82 months for non-members - Visit their service department more often: 2.82 times p...

  Email and snail mail promotions are great methods for creating customer loyalty. However, you need to make sure that the information customers include during the signup process is accurately addressed in the marketing. There’s no greater feeling than receiving an unexpected coupon or discount on something you want to purchase. It’s a completely different story when the promotion is for something random that doesn’t remotely pique your interest. Here’s an example of a mail promotion gone wrong: A few weeks ago, I received a pamphlet ad from a loyalty program I belong to at a major drug store; the advertisement was primarily for cosmetics and other feminine products that I will never have a use for and it completely alienated me from their program. Are you doing this in your dealership service department? For instance, if a customer has just purchased a brand new vehicle and you send them a coupon for a 30,000 or 60,000 mile maintenance service, the...

The National Business Research Institute has created a valuable infographic focused on customer loyalty. NBRI explains, “Customers are a business’ most important asset, without them the business wouldn’t exist. So it’s imperative to keep these customers happy and improve their loyalty to your business.” They add, “We created this customer loyalty infographic to help you not only understand it, but to help you cultivate that loyalty among your own customers.” We found NPRI’s presentation of the importance of customer loyalty in today’s economic society not only helpful and insightful, but easy to digest with specific details that would apply in a variety of business settings.

  Everyone knows Valentine’s Day celebrates the ladies. That’s why Bristol Toyota Scion in Bristol RI, recently used LoyaltyTrac, their service rewards program, to conduct an email campaign centered on Valentine’s Day being “Ladies’ Day”. Colorful, Valentine’s-themed emails were sent to all of their service reward members, with the Subject Line: Be Our Valentine - View Your Gift Inside. The email included an offer: Ladies Receive $15 Off Any Service of $35 or More. The campaign ran on 2/10/12, with available redemption being from 2/10-2/18.   This was the first LoyaltyTrac promotion Bristol Toyota Scion had ever done to its service reward members and it resulted in a very heartening open rate of 58.33%, far surpassing the Direct Marketing Association’s (DMS) average of 12-14% for opt-in lists.   Other LoyaltyTrac auto dealerships have achieved similar results with this Valentine Day-themed email campaign.&nbs...

  “The customer is always right.” was coined and made famous by retailers including Selfridges and Marshall Field’s (now Macy’s) around the turn of the 20th century. It’s a phrase that most of our parents and grandparents had ingrained into their brains as children, and yet it somehow appears to have been lost in translation among the generations – and businesses – born within the last 20 to 30 years. We are all human and we all make mistakes – businesses and customers alike, but if you want to strengthen the relationships you have with your customers and keep them loyal, then knowing exactly who is right and who is wrong doesn’t matter in most situations. The important thing to focus on is that the customer always deserves to be treated right and with a professional respect and courtesy. As a business, you must decide where that line is going to be drawn, and then be consistent. When a cus...

  In a recent article on Forbes.com, “The Final Frontier: Customer Expectations,” Robert Passikoff points to a shift in the past 15 years: customer expectations have increased significantly, rising 24 percent in all categories. After explaining how customer loyalty is measured and providing an example from the wireless carrier industry, Passikoff concludes, “…brands that are able to better meet – even exceed – growing customer expectations always end up on the top of the list.” Tying customer loyalty scores to customer expectations is not the answer. Why? Loyalty scores are important, but they don’t take into account all the reasons customers stick with a company. The “how well” question is the field of loyalty. The “if/if not solved” is the field of performance. Until we come up with a “complacency” or “frustrated and stuck” index and begin dissecting truly loyal, enthusiastic...

  Developing meaningful relationships with clients requires you to connect with them on a personal level. The more you know about a customer, the easier it is to sell them services and/or products that meet their individual needs. It also helps you determine which type of marketing the customer will be most receptive to. Effectively engaging customers through direct marketing channels hinges on several key principles: Start with the customer data. Knowing how customers have responded to communications in the past allows you to better target them with your next communications. Use data to tailor your marketing to fit the individual needs of your customers. Recognize and reward your best customers. If your redemption rates are low, you are not giving the customers what they truly want or need. Find out what customers want and tailor your rewards accordingly. Remain communication channel agnostic. Combine the information you receive from customer data an...

  Prepaid Maintenance Plans (PPMs) have traditionally been used as a customer retention tool by dealers, and rightfully so. Paying up front for services is a guaranteed way to get customers back into the service lane. But the pricing and structure of many PPMs administered by third parties did not make the plans very profitable for the dealerships, and even more important, for the customers.   The new generation of self-administered, self-managed PPM plans offer many benefits beyond customer retention—mainly, more revenue. PPM customers frequently purchase additional customer-pay retail parts and labor services that boost profitability.   Boosting PPM repair orders by upselling an additional $150 to $350 of retail customer-pay business adds serious money to the bottom line. A dealer who plugs a basic three-product PPM plan into every one of the 600 used units he or she sells each year can expect to generate more than $1.3 million in total incremental se...

  In last week’s posting, we began counting down the top 12 strategies for building a successful customer loyalty program in 2012. In part 2 of this series, condensed from Driving Retention and from Customer Loyalty: How to Earn It How to Keep It by Jill Griffin, we continue our countdown of the top 12 action steps you can take to implement a customer loyalty program.   #6: Get Responsive and Stay That Way. More and more, customers are coming to expect round-the-clock customer service. Review all customer touch points and identify any area that produces a responsiveness bottleneck. Prioritize these areas, with highest priority given to those affecting the most customers.   #5: Aggressively Seek Out Customer Complaints. 90% of customer complaints are unarticulated and manifest themselves in negative ways: unpaid invoices; lack of courtesy to your front line service reps; and above all, negative word of mouth. With social media, an unhappy customer can no...

Does your business strategy for 2012 include a customer loyalty program? On an annual basis, loyalty program members outspend other customers by as much as 45%. As you prepare your goals and resolutions for the new year, think about building a loyalty program that focuses on keeping a core group of customers coming back repeatedly as opposed to a marketing program that achieves short term results.   In part 1 of this blog, condensed from Driving Retention and from Customer Loyalty: How to Earn It How to Keep It by Jill Griffin, we count down the top 12 action steps you can take to implement a customer loyalty program in 2012:   #12: Store Your Data in One Centralized Database. Review your company’s current database situation. How many customer databases exist? For example, does each sales rep keep her own customer database? Does each department keep its own? Brainstorm with staff on how to start consolidating the databases, with the ambitious goal of moving to...

  Representing more than 1.7 billion consumers worldwide, of which 77 million are in the US, the so-called ‘Millennial’ generation (aka. ‘Generation Y’) is presenting marketers with some new challenges and changes as it comes of age and takes the reins of the global consumer economy, according to a study by Aimia (formerly Groupe Aeroplan). To compare the attitudes and behaviors of Millennials (born between the mid-1970s and the mid-1990s) with older consumers, Aimia commissioned Harris Interactive to conduct an online study of more than 6,000 consumers in Canada, the UK and the US. The study – recently released in the United States as “Born This Way: The US Millennial Loyalty Survey” – concluded that Millennial consumers will certainly change the way companies and brands build sustainable customer loyalty. Generation Y is bigger than the Baby Boomer generation, and is three times the size of Generation X. With Baby Boomer...

  The week between Christmas and New Year’s is a busy time of year for many auto dealers. It can be challenging for salespeople to keep up with all the showroom traffic, but that’s no excuse to let extra revenue opportunities fall through the cracks! While the customer is still engaged at the sales desk is the perfect time for a salesperson to boost revenue with the following programs: Pre-Paid Maintenance Program: What better gift to give than an entire year of worry-free driving? A pre-paid maintenance program is the perfect new vehicle “accessory.” These plans can be sold in both the F&I and service departments. To maximize revenue, dealers should look for PPM plans that require no third-party administration, no sharing of program revenue or forfeiture and no service claim submission requirements. Plans should be customizable and branded to your store. Loyalty Card: If your customers accumulate enough rewards points, they may be able to redee...

  Facebook Marketing Solutions recently held a series of six marketing bootcamp webinars for Facebook business pages. In case you missed them, here are brief summaries of some of the highlights: Why Facebook for Business? Besides the fact that 800 million people are on Facebook, word of mouth marketing is twice as likely to result in engagement and four times as likely to result in purchase than any other form of marketing. Connecting with Customers: Facebook provides businesses with proven methods to connect with and engage their customers. By building out your business page, engaging with current customers and providing them with incentives to come to your store, you have the opportunity to both build customer loyalty and reward them for their loyalty. Facebook Ads: Facebook allows businesses to target a very specific audience using demographic and geographic data, or by workplace, education, likes and interests. To create effective ads, use Facebook in...

  When a dealership offers a prepaid maintenance program (PPM) to its customers, what does the store hope to get in return? Customer affinity is one thing, but there are other benefits to this bottom line-driving F&I product. Not only does a PPM plan deliver affinity, it provides dealers with profitable affinity. And experience shows that customers who use a dealer’s repair facilities are 17 times more likely to purchase their next vehicle from that dealer. As great as that is, the true long-term benefit is that PPM-plan customers frequently purchase additional customer-pay retail parts and labor services that boost repair order profitability. To capture that opportunity, dealerships need to commit themselves to delivering a safety-and-reliability inspection to every vehicle owner. Doing so helps verify the needs that brought the vehicle into the shop. It also allows technicians to identify other legitimate maintenance and repair needs beyond those covered by the...

Nothing creates warm-fuzzy feelings quite like cookies. That’s why Howdy Honda in Austin , TX recently used LoyaltyTrac, their service rewards program, to conduct an email campaign centered around the holidays and cookies. Colorful, cheerful emails were sent to all of Howdy Honda’s service reward members, encouraging them to submit their favorite holiday cookie recipe to be included in a downloadable cookbook that the dealership would create and distribute in its December email. Members were encouraged (but not required) to post their recipes on Howdy Honda’s Facebook wall. Every member who sent in a recipe received a bonus 10,000 service rewards points redeemable towards any service of choice. The email campaign achieved an open rate of nearly 20%, far surpassing the Direct Marketing Association’s (DMS) average of 12-14% for opt-in lists. More than 50 members clicked through to the dealer’s Facebook page, resulting in many cookie recipes being poste...

  The holiday season is here – a time for free shipping and 20% off everything! At least that’s what a bulk of the major retailers out there tend to focus on this time of year. For many of us – regardless of the holiday(s) we each celebrate – the focus of this holiday season is on family and friends, on creating memories and sharing traditions, on expressing gratitude and love. It is a season of goodwill and giving. As a business, are you focusing on the steep rise in sales you can expect over the next two months or on the emotional aspects that impact so many this time of year? What do you think your customers are focusing on? Are the two one in the same? These are questions that we need to ask ourselves as marketers, particularly in the medium of email marketing. With the barrage of emails that your customers are already receiving, how can you differentiate your email campaigns from all the competition – both in yo...

Would you rather have 1 million Facebook fans or 100 loyal customers? Until recently, businesses have generally focused on the number of fans they acquired, trying to get a high number of people to “like” their page. The number of Facebook fans your business has, however, is immaterial if you have no relationship with them as customers. A recent post on All Facebook: The Unofficial Facebook Resource outlines 7 ways to build customer relationships on Facebook. We’ve expounded on each of these tips and suggest loyalty program and marketing managers evaluate what steps in this process would best help your business harness the potential in customers using social media. 1. Build a Single Database: Just like with customers who visit your business in person, in order to manage a relationship with your fans you need to start with a comprehensive database. Most social networks allow interfacing through their API using an open graph. Learn M...

  In September Groupon launched the first phase of Groupon Rewards, a new platform that tries to provide businesses with a way to build customer loyalty. Groupon Rewards’ release comes amid concerns from merchants that Groupon customers demonstrate no loyalty to the businesses offering deals. What Groupon Rewards Does: Groupon users who spend a merchant-determined fixed amount (at that same merchant) can earn a Groupon Reward, providing a deeper discount than a regular Groupon deal. For example, after spending $50 or $100 at a business over time, a customer might get a Groupon Reward to spend $4 and get $20 worth of food. How Groupon Rewards Works: Groupon Rewards are tracked using user credit cards. Once users have opted in to the program, they would need to consistently use the credit card which is already on file with Groupon in order to build their Groupon Reward. A spending goal, set by the merchant, can be met after multiple visits. User...

  A good loyalty program consists of much more than simply rewarding your customers’ repeat business. In many ways, the repeat business generated by customer rewards is only scratching the surface of the loyalty and retention benefits available with such a program. A recent article published by ITC Infotech details how businesses can include customer-centric processes in implementing their customer loyalty programs to improve their tactical marketing efforts and the overall customer experience: Collect & Organize Data Adopt a customer loyalty solution that allows not just the collection of data but its organization into smaller and usable modules which will help in the accurate assessment of actual ‘market’ and locate existing and emerging trends. Organized data can be extrapolated not only with information on prevailing economic scenario but also to competitive landscape to fine tune a loyalty program that is future-proof. It goes without s...

  Every business that has offered a loyalty rewards program has seen a variety of responses to every reward offered. Some rewards are rarely – if ever – redeemed by members, while another reward may seem to be the only reward members want. And while we may switch out unused rewards for others we see as more valuable, the success of that reward will likely remain low unless we’ve evaluated and employed the characteristics of highly successful rewards in our own reward selection. Detailed below are eight properties that we believe are the foundation of the most successful rewards. A good reward should incorporate many – if not all - of these properties: Flexible – Most loyalty programs are set up to last years, even decades. Your rewards should be flexible enough to adapt through any changes that may develop over the course of the program. Changes in membership numbers, the economy, product pricing and various other conditions are...

  As the economy has continued to fluctuate almost constantly, businesses have been forced to adapt processes and strategies to fit changing economic demands. One of the biggest changes in the automotive industry is that dealers are no longer able to wait for customers to come to them. Dealerships need to ensure that their sales teams are prepared to first find the sales. Sales people will generally focus on the processes that deliver the dollars, and these processes have changed. Dealers are not waiting for a vehicle supply to push; rather they have to pull a demand for vehicle sales out of their customers. And if dealers want to effectively change to a demand-driven process, they need to reward the processes that create the right opportunities and deliver the right results. We’ve included some suggested commission ideas that would be simple to implement and effective at driving desired behaviors from personnel in your service and sales departments and ultimately he...

  Rewards drive behavior, whether you’re training your dog to sit, potty-training your toddler or encouraging specific buying habits from your customers. By rewarding the behavior you want and not rewarding the behavior you would like to discourage, you can generally predict the direction a behavior will trend. Perhaps the most crucial part of customer loyalty programs are the rewards, and a good reward will accomplish many different things. We’ve provided a list below detailing the different functions of a good reward. We suggest you evaluate your rewards individually to determine if the rewards you’ve employed in your loyalty program are fulfilling their overall purpose. 1.  A Good Reward Provides Your Customers a Reason to Participate.   2.  A Good Reward Says “Thank You” to Your Customers.  3.  A Good Reward Encourages Customers to Supply Useful Data.   4.&nbs...