Today’s dealers consistently rank customer retention as their top priority, yet they still spend the majority of their marketing budget acquiring new customers. Customers want ease and efficiency during the buying and servicing processes now more than ever. With the access they have to endless amou nts of information, they are always looking for the best deal. Customers expect quick and receptive communication, competitive pricing and stellar customer service at a minimum. Loyalty programs boost overall revenue by 5 to 10 percent, with members of these programs spending between 5 to 20 percent more than non-members. The case for reward programs is clear-cut, and it’s important to choose the right loyalty program for your dealership and your customers.

Loyalty Members vs. Non-Members

1. Review your Budget and Goals

Dealerships today spend most of their marketing budget on acquiring new customers (conquest business) despite the fact that attracting a new customer can cost 6-7 times more than keeping an existing one (Kissmetrics)*. Taking action by identifying marketing costs that are unused and effectively produce less than stellar results or are duplicate services is a good place to start. Furthermore, if you have multiple suppliers that offer the same services, you may be missing out on valuable discounts. After you reevaluate your supplier and partnership list, you can make decisions based on ROI.

2. Create an Actionable Plan

Create a team of knowledgeable and engaged employees who will lead the program and take on specific “action items” to ensure your program’s success through daily implementation. Discussing and developing the efforts below will help you cover some common loyalty program pitfalls.

1. Understand your ideal customer, their needs, behaviors and what will motivate their interaction and spend.

2. Define the loyalty reward structure and how the reward will be delivered.

3. Create a communication calendar that highlights the path for each type of customer and what type of communication they prefer: email, text, phone.

4. Generate the loyalty program marketing content and images.

5. Detail the loyalty program marketing promotion channel calendar that will detail how often will you promote the program, and through which channels.

6. Create an internal workflow to show which employee is responsible for each task and the timeframe in which it must happen and the “how.”

7. Finally, begin your loyalty program by aiming (and tracking) for modest, yet scalable increases in customer retention, frequency and lift.

3. Select Motivating Loyalty Rewards

According to a DME Automotive study, 79% of customers expressed interest in joining an automotive loyalty program! Awesome! Customers want loyalty programs… just not meaningless loyalty programs.

It’s not enough to create an obscure point-based program that hardly makes sense to your team, let alone your customers. Your loyalty program should be easy to understand and provide immediate gratification.

Service customers often believe that the “mom and pop” shop is cheaper and offers a more affordable service option. When you think about the thousands of dollars you forfeit each day you will see that allocating a small amount of funds back to the customer could translate into a top-generating revenue center for your dealership. Creating a program with rewards that truly motivate customers to return and gives them something to associate positively with the dealership is a worthy investment.

Once you find a motivating reward, be sure that you can accurately and easily DELIVER what you are promising and promoting. There is nothing worse than falling short of a valuable customer’s expectations. Have a clear fulfillment and delivery method for your loyalty rewards. You’ll save yourself, your team AND your customers a lot of headaches.

4. Develop Relative Touch Points

Creating a cohesive end-to-end customer communication plan to ally with your loyalty program is crucial. Each customer has different needs and the communication they receive should be based on those needs and sent at the right time. Your customers are busy. Offer peace of mind through relevant and engaging service reminders. You will be placing your dealership front and center. Then, go a step further and use your vast customer data to send birthday rewards, seasonal check-up offers or create a smartphone application where your customer can create a profile to track their service rewards, updates and schedule future visits.

Developing a customer loyalty program for your service department that drives real customer retention and turns your average customer into a brand advocate is no easy task and there is certainly no trick to it. However, it can be simplified if you leave it to the professionals. Utilizing the Incentivefox platform allows you to remain in control of your business and put the focus back on your customer while breathing new life into additional revenue streams. The Incentivefox Service Rewards Platform includes scheduled, targeted promotional campaigns, an experienced client success manager, integrations with your existing dealership systems, marketing automation, reward fulfillment, program tracking, quality customer communication and engagement, custom messaging and much more. Click here to learn more.