I have written several blogs in the past about the success of customer loyalty program promotions in auto dealerships. I am mainly interested in cost-effective actions that dealers can successfully use to help drive profits.

A recent Summer Service Special email promotion designed and delivered by LoyaltyTrac, a leading points-based loyalty program provider, caught my eye because of the high success rate. It had a remarkable open rate of over 26% and also produced a substantial amount of service appointment bookings and profit – the campaign returned excellent results.

Ad agency quality emails were sent to a highly targeted group of reward program members, with the direct Subject Line: “Sizzling Summer Specials – Oil Change and A/C”.

The email was short and to the point and also included a link to make it easy for the reader to immediately schedule a service appointment with just a click of the mouse.

Richfield Bloomington Honda sent out 5,803 messages of which 1,542 were opened – a very healthy open rate of 26.57% -- double the DMA (Direct Marketing Association) average of 12-14% for opt-in lists. As a result the dealership scheduled 60 service appointments online – just by having the “Click Here to Schedule Service” button visible and distinct. This email campaign generated more than $14,000 in revenue in one week – and this is just from the customers who booked directly through the email!

Jason Weverka, Service Manager at Richfield Bloomington Honda, stated “We are having a great response on the campaign. A lot of people are coming in with the printed offer; it has been very successful. I really liked the oil change and the A/C specials for the summer.”

Glenbrook Hyundai ran the same campaign to a smaller customer base. It sent out 915 emails of which 246 were opened – again a great open rate of 26.89%.  The campaign also resulted in 16 service appointments scheduled to date online.

As these results show, communicating seasonal offers to your customers can be highly effective. Customers welcome relevant messages that have value to them. The key is to send well-written, targeted messages to the right people at the right time. Keep it short and to the point. Engage users with a straightforward email subject line and content that is informative, easy to digest and adds perceived value.

Pre-paid Maintenance Plans (PMPs) keep customers returning to your service department and increase upsell opportunities, which is critical to increasing the service bottom line. Today’s self-administered, self-managed PMPs are appealing to customers, particularly those buying mainline domestic and import brands who seek value in everything they buy.

Today’s technology-driven plans make it very easy for dealers to customize what is offered in a PMP. Plans that provide the product (value) important to the local market will appeal more to buyers, making their presentation and sale in the F&I office or service lane more profitable and successful for the dealership.

It is these plans’ ability to retain a customer’s service business and then create upsell opportunities for additional customer-pay repair order (RO) business that make them like a money tree. These programs can triple the likelihood of the customer continually returning for service – a big growth over the 18 to 20 percent of customers who do traditionally return with a PMP’s incentive.

By converting PMP owners’ prepaid maintenance work to additional legitimate service needs, the additional retail parts and labor can produce healthy additional business. Some dealers report an additional $150 to $350 of up-sold retail customer-pay business per RO as a result.

Every plan will experience forfeiture. It results when a customer terminates the plan early or for whatever reason does not use the plan. In some PMPs, the third-party administrator holds this dealer-funded reserve. It is from this reserve that the administrator would often take up to 60 percent of the value of the cancelled services as part of its fee structure. Today’s self-managed plans enable the dealer to processes forfeiture through the general accounting ledger and add the reserve to their own bottom line.

For more information about the benefits of Pre-Paid Maintenance Programs, visit http://ow.ly/bN7Gj

Pre-paid Maintenance Plans (PMPs) keep customers returning to your service department and increase upsell opportunities, which is critical to increasing the service bottom line. Today’s self-administered, self-managed PMPs are appealing to customers, particularly those buying mainline domestic and import brands who seek value in everything they buy.

Today’s technology-driven plans make it very easy for dealers to customize what is offered in a PMP. Plans that provide the product (value) important to the local market will appeal more to buyers, making their presentation and sale in the F&I office or service lane more profitable and successful for the dealership.

It is these plans’ ability to retain a customer’s service business and then create upsell opportunities for additional customer-pay repair order (RO) business that make them like a money tree. These programs can triple the likelihood of the customer continually returning for service – a big growth over the 18 to 20 percent of customers who do traditionally return with a PMP’s incentive.

By converting PMP owners’ prepaid maintenance work to additional legitimate service needs, the additional retail parts and labor can produce healthy additional business. Some dealers report an additional $150 to $350 of up-sold retail customer-pay business per RO as a result.

Every plan will experience forfeiture. It results when a customer terminates the plan early or for whatever reason does not use the plan. In some PMPs, the third-party administrator holds this dealer-funded reserve. It is from this reserve that the administrator would often take up to 60 percent of the value of the cancelled services as part of its fee structure. Today’s self-managed plans enable the dealer to processes forfeiture through the general accounting ledger and add the reserve to their own bottom line.

For more information about the benefits of Pre-Paid Maintenance Programs, visit http://ow.ly/bN7Gj

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 with a service advisor sales incentive of an Apple iPad if they hit a quota of 22 plans sold. The incentive proved successful with all five service advisors exceeding their quotas resulting in 127 UltraCare plans being retailed to existing service lane customers. 

The dealership has continued the success of the incentive program by building in PPM sales as part of the service advisors’ pay plans. Hare Chevrolet now averages 62 plans sold per month, 80% of which are sold out of service and 20% out of F&I. Customers are much more likely to purchase a maintenance plan in service when they don’t have competing F&I products to consider and the loan to value issue is gone.

The dealership sells the plans at a cost basis. Rather than try and make a profit they are using these plans as a great retention technique, which is working well with retention rates increasing about 5% per month. However, an added bonus is that the average customer that visits for a simple oil change ends up spending an additional $171 per RO, so it is incredibly profitable as well.

Based in Noblesville, Indiana, Hare Chevrolet continues to hold the title of the country’s longest-lived family-owned vehicle retailer. Today the Chevrolet dealership sells about 400 cars per month and employs 150 people. Current managers Courtney Cole and Monica Peck, who are the great-great-great granddaughters of original founder Wesley Hare, offer 50 service stalls, and about 1000 new Chevrolets in its sales lot.

The latest in technology has allowed the dealership to keep in front of the pack in a fiercely competitive market, while also maintaining loyal customers.

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 with a service advisor sales incentive of an Apple iPad if they hit a quota of 22 plans sold. The incentive proved successful with all five service advisors exceeding their quotas resulting in 127 UltraCare plans being retailed to existing service lane customers. 

The dealership has continued the success of the incentive program by building in PPM sales as part of the service advisors’ pay plans. Hare Chevrolet now averages 62 plans sold per month, 80% of which are sold out of service and 20% out of F&I. Customers are much more likely to purchase a maintenance plan in service when they don’t have competing F&I products to consider and the loan to value issue is gone.

The dealership sells the plans at a cost basis. Rather than try and make a profit they are using these plans as a great retention technique, which is working well with retention rates increasing about 5% per month. However, an added bonus is that the average customer that visits for a simple oil change ends up spending an additional $171 per RO, so it is incredibly profitable as well.

Based in Noblesville, Indiana, Hare Chevrolet continues to hold the title of the country’s longest-lived family-owned vehicle retailer. Today the Chevrolet dealership sells about 400 cars per month and employs 150 people. Current managers Courtney Cole and Monica Peck, who are the great-great-great granddaughters of original founder Wesley Hare, offer 50 service stalls, and about 1000 new Chevrolets in its sales lot.

The latest in technology has allowed the dealership to keep in front of the pack in a fiercely competitive market, while also maintaining loyal customers.

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 per 12 months: $336.63

Ÿ 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.”

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 per 12 months: $336.63

Ÿ 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.”

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 to non-members visiting an average of 1.76 times per year.

Only when the service department has an opportunity to service a customer can parts and labor profit opportunities be created. Our study found that rewards-based loyalty programs create more active and frequent visits. Do you track the average frequency of visits for your service customers? How do your numbers compare with these?

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.”

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 to non-members visiting an average of 1.76 times per year.

Only when the service department has an opportunity to service a customer can parts and labor profit opportunities be created. Our study found that rewards-based loyalty programs create more active and frequent visits. Do you track the average frequency of visits for your service customers? How do your numbers compare with these?

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.”

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 communications are necessary to garner an appointment makes it easy for service departments to achieve their goals.

How do you track the ROI and effectiveness of your marketing communications?

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.”