CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
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:
Average non-member per customer pay RO: $191.32
Average member spend per customer pay RO: $235.01 (an increase of $43.69)
Annualized total non-member service spend per 12 months: $336.63
Annualized total member service spend per 12 months: $662.01 (increase of $325.38)
Dealerships with increased customer pay ROs and annualized spending credit their loyalty programs, citing higher customer retention rates and increased frequency of visits as reasons.
More information on this topic can be found in our free ebook, “The Hard Facts and Financial Impact Report: Auto Dealership Loyalty Programs & The Effects They Have on Profitability.”