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According to an article in Automotive News, one dealer in Illinois has come up with a pretty ingenious loyalty rewards program idea – to leverage taxpayer dollars to increase car sales, while also helping to support local businesses.
Glenn Bockwinkel, President of Acura of Libertyville, approached the mayor of his local town and proposed an idea that he pitched as a win-win for the village’s car dealers, local business, consumers and the city -- The Shop Libertyville Rewards program.
It works like this: Any customer that shops at a local car dealership is given vouchers which can be exchanged for $200 in gift certificates, redeemable at 86 local retail businesses. Or, the $200 can be used to purchase aftermarket products at the local dealerships themselves. The idea is to keep local customers from purchasing outside the area, which helps the dealers stay in business and provides the city with additional tax revenue. In addition, any local businesses that accepts these certificates can turn them into the city to be reimbursed through tax money set aside for the program.
The dealers in the city also donate $100 for each vehicle sold to one of nine local charities. According to the mayor, “68 cents of every dollar spent in a community stays in that community.” He attributes 60 percent of all sales tax receipts received by Libertyville to auto-related businesses. The city runs the program for just one month each year and budgets $70,000 in tax dollars towards the program.
Customer loyalty programs and incentive-based rewards, such as dealer cash, are certainly a value-add for any dealership customer. This particular dealer expanded his dealer loyalty program by taking a community-based approach. He worked out an amazing deal with the city to promote - and reward - the local purchase of vehicles using tax dollars. It includes cable TV commercials (which they plan to run 1,600 times), along with newspaper and radio ads to promote awareness. It is, quite simply, brilliant! The combination of supporting local businesses and charities, while also increasing tax revenue, all wrapped in one big package, couldn’t be any better.
While I don’t have specific data on how these certificates are actually being used, other than what was included in the article, the option for the consumer to use the certificates for aftermarket accessories at the dealership is also a very smart move. How many times have you closed a deal and, while the customer waited to go into the finance office, threw a hat, shirt or some other item, into the deal for free? With these certificates, you would no longer have to eat the costs in the front end gross, but rather the consumer could use their gift certificates to purchase them.
This dealer’s innovative and outside-of-the-box thinking will almost certainly pay dividends through increased sales and future service work. Hopefully, they’ve trained their sales staff and finance managers to suggest to their customers that they spend their gift certificates on accessories. But even if the customer does not do this, the dealership ends up building a more positive brand image within their community, which can only keep them top-of-mind when a local consumer decides to buy a car.