How is your company’s customer service? Pretty Good? Sure about that? According to statistics provided by Bain & Co., 80% of companies surveyed said that they offer a superior customer service experience, but only 8% of their customers agreed with them. Ouch.

Okay, so you’re not sure about your customer service. But you think it’s pretty good because your online reputation is good and you have five thousand followers on Facebook. Well, think again. In another customer relationship study conducted by IBM in 2011, companies were surveyed as to the reasons why their customers followed them on social media sites. The companies listed discounts among the least important reasons, but when the customers themselves were surveyed, they listed discounts as a major reason for following a company on a social site.

For a majority of businesses, there is clearly a disconnect as to how they believe they are viewed by their customers and how their customers actually view them. One reason for this is because so many dealerships are focused on pushing out marketing messages—whether it’s via e-mails, snail mail or other advertising channels. Even with social media, which offers an opportunity to engage with customers, many businesses fall short because they are focused more on responding to criticisms or coming up with witty or engaging content—than what the customers are saying. In short, most businesses aren’t really listening to their customers.

In today’s competitive environment, simply having a great product or service and providing a good customer experience isn’t enough. Customers now want a fantastic experience—they want to feel appreciated for their business. You may roll your eyes at that, but if you do, you will be overlooking profits. In return for a fantastic experience, customers reward you with their loyalty. We’ve all heard the statistics:

Ÿ A 5% increase in customer retention can increase a company’s profitability by 75% (Bain & Co.)

Ÿ 80% of your company’s future revenue will come from just 20% of your existing customers (Gartner Group)

Ÿ Attracting new customers costs your company five times more than keeping an existing customer (Lee Resource International, Inc.)

A CRM may give you a response rate and ROI on dollars spent on this month’s campaign, but it gives you no indicator of what tomorrow’s campaign may do, or how customer perception will affect your revenue next year. A loyalty program, on the other hand, gives you the ability to answer the questions, ‘what do your best customers care about most?’ and ‘why are they doing business with me?’ With a loyalty program, you can easily identify, track and promote to individuals who are most likely to become loyal, long-term sources of revenue. 

How is your company’s customer service? Pretty Good? Sure about that? According to statistics provided by Bain & Co., 80% of companies surveyed said that they offer a superior customer service experience, but only 8% of their customers agreed with them. Ouch.

Okay, so you’re not sure about your customer service. But you think it’s pretty good because your online reputation is good and you have five thousand followers on Facebook. Well, think again. In another customer relationship study conducted by IBM in 2011, companies were surveyed as to the reasons why their customers followed them on social media sites. The companies listed discounts among the least important reasons, but when the customers themselves were surveyed, they listed discounts as a major reason for following a company on a social site.

For a majority of businesses, there is clearly a disconnect as to how they believe they are viewed by their customers and how their customers actually view them. One reason for this is because so many dealerships are focused on pushing out marketing messages—whether it’s via e-mails, snail mail or other advertising channels. Even with social media, which offers an opportunity to engage with customers, many businesses fall short because they are focused more on responding to criticisms or coming up with witty or engaging content—than what the customers are saying. In short, most businesses aren’t really listening to their customers.

In today’s competitive environment, simply having a great product or service and providing a good customer experience isn’t enough. Customers now want a fantastic experience—they want to feel appreciated for their business. You may roll your eyes at that, but if you do, you will be overlooking profits. In return for a fantastic experience, customers reward you with their loyalty. We’ve all heard the statistics:

Ÿ A 5% increase in customer retention can increase a company’s profitability by 75% (Bain & Co.)

Ÿ 80% of your company’s future revenue will come from just 20% of your existing customers (Gartner Group)

Ÿ Attracting new customers costs your company five times more than keeping an existing customer (Lee Resource International, Inc.)

A CRM may give you a response rate and ROI on dollars spent on this month’s campaign, but it gives you no indicator of what tomorrow’s campaign may do, or how customer perception will affect your revenue next year. A loyalty program, on the other hand, gives you the ability to answer the questions, ‘what do your best customers care about most?’ and ‘why are they doing business with me?’ With a loyalty program, you can easily identify, track and promote to individuals who are most likely to become loyal, long-term sources of revenue. 

You know who they are: your VIP customers. The ones who have purchased more than one vehicle from you and the ones who frequent your service department for their repair needs. What are you doing to show your appreciation for them this holiday season?

Call it a trend or a growing awareness that you can’t take loyal customers for granted, but more and more small businesses are showing their appreciation in the form of a party or other event that offers both fun and rewards to their most valued customers. Would this work for your dealership? Try it and see!

Here are a few tips and ideas:

1. If you’re thinking about a party, don’t schedule one for a Saturday night. You don’t want to compete with other holiday parties. Instead, host an afternoon party when customers might normally be out shopping.
2. If you want to throw a party, make sure there’s a draw worth seeing such as a special guest; i.e. musician, local sports hero, entertainer, author or expert related to your business. One idea might be to contact your local school and invite their chorus to sing holiday songs at your dealership. Kids are cute, the entertainment’s free and they’ll bring their parents.
3. Offer a gift giveaway to “the first 100 people who walk through the door.”
4. Offer a “no pressure” event that will answer any questions consumers may have about your 2013 product line.
5. Do you have any synergistic or marketing partnerships with other local businesses? Consider inviting them to co-host an event with you. The more, the merrier.
6. Tie your customer appreciation event into a charitable or fundraising effort for the holidays. People feel good about giving and are more likely to do so if you make it easy for them.
7. Create a sense of exclusivity; though you may be tempted to invite all your customers, invite only those who have demonstrated the most loyalty. In your pre-event marketing, convey a sense of excitement about this “exclusive” event and give several compelling reasons why your customers will want to attend.
8. Urge your customers to bring a friend, then reward them with a coupon or small gift if they do bring a friend.
9. Use all marketing channels to promote the event. In addition to email, create an event on Facebook for your fans, tweet, post something on Pinterest, display the event on your website, etc.
10. If this all seems like too much work, at the very least contact your most loyal customers and offer them some small gift for the holidays without requiring purchase. Whether it’s extra points, a stuffed animal, a coupon at a local restaurant—your appreciation for them will be appreciated by them!

Have you ever held a customer appreciation event? How did it turn out for you? Do you have any additional tips or suggestions for a successful customer appreciation event?

You know who they are: your VIP customers. The ones who have purchased more than one vehicle from you and the ones who frequent your service department for their repair needs. What are you doing to show your appreciation for them this holiday season?

Call it a trend or a growing awareness that you can’t take loyal customers for granted, but more and more small businesses are showing their appreciation in the form of a party or other event that offers both fun and rewards to their most valued customers. Would this work for your dealership? Try it and see!

Here are a few tips and ideas:

1. If you’re thinking about a party, don’t schedule one for a Saturday night. You don’t want to compete with other holiday parties. Instead, host an afternoon party when customers might normally be out shopping.
2. If you want to throw a party, make sure there’s a draw worth seeing such as a special guest; i.e. musician, local sports hero, entertainer, author or expert related to your business. One idea might be to contact your local school and invite their chorus to sing holiday songs at your dealership. Kids are cute, the entertainment’s free and they’ll bring their parents.
3. Offer a gift giveaway to “the first 100 people who walk through the door.”
4. Offer a “no pressure” event that will answer any questions consumers may have about your 2013 product line.
5. Do you have any synergistic or marketing partnerships with other local businesses? Consider inviting them to co-host an event with you. The more, the merrier.
6. Tie your customer appreciation event into a charitable or fundraising effort for the holidays. People feel good about giving and are more likely to do so if you make it easy for them.
7. Create a sense of exclusivity; though you may be tempted to invite all your customers, invite only those who have demonstrated the most loyalty. In your pre-event marketing, convey a sense of excitement about this “exclusive” event and give several compelling reasons why your customers will want to attend.
8. Urge your customers to bring a friend, then reward them with a coupon or small gift if they do bring a friend.
9. Use all marketing channels to promote the event. In addition to email, create an event on Facebook for your fans, tweet, post something on Pinterest, display the event on your website, etc.
10. If this all seems like too much work, at the very least contact your most loyal customers and offer them some small gift for the holidays without requiring purchase. Whether it’s extra points, a stuffed animal, a coupon at a local restaurant—your appreciation for them will be appreciated by them!

Have you ever held a customer appreciation event? How did it turn out for you? Do you have any additional tips or suggestions for a successful customer appreciation event?

It’s that time of year when giving takes priority over getting. Most dealerships I know are extremely generous when it comes to charitable causes, but there’s no need to be humble about it. The more you engage your customers in your holiday gift drives, the more you will be building loyalty with them.

In this recent survey by the American Red Cross, most consumers say they plan to give to their favorite charities despite the slow economy. 79% of people say that they would rather have a donation in their honor than to get a gift they wouldn’t use; and 70% plan to give as much as they did last year. Enabling customers to give contributions through your store’s program is one way to bring customers in, start conversations and create mutual goodwill that can last well into 2013.

Here are a few ideas to build loyalty and tie-in promotions to your current loyalty program around the holidays:

1. Send an e-mail campaign to your current customer base highlighting which causes you’re involved in and how they can donate. At the same time, promote your loyalty rewards program for 2013 by offering to donate something in their name if they become a member, or giving them “free” points to join.
2. Take advantage of end-of-the-year crowds by ramping up sales efforts for pre-paid maintenance plans. What better gift can a person give than a year’s worth of peace of mind? Again, maybe you can tie an incentive such as a donation to a charity of their choice when they sign up for a pre-paid maintenance program.
3. Create a fun, loyalty-building campaign like this “Christmas Cookie” cookbook that Howdy Honda produced last year. Every person who sent in or posted a Christmas cookie recipe on Howdy Honda’s Facebook page received 10,000 bonus rewards points towards any service of their choice.

The holiday season can add a lot to a dealership’s bottom line; but there’s nothing wrong with leveraging a little goodwill so you can build customer loyalty and set yourself up for a great 2013 as well. 

It’s that time of year when giving takes priority over getting. Most dealerships I know are extremely generous when it comes to charitable causes, but there’s no need to be humble about it. The more you engage your customers in your holiday gift drives, the more you will be building loyalty with them.

In this recent survey by the American Red Cross, most consumers say they plan to give to their favorite charities despite the slow economy. 79% of people say that they would rather have a donation in their honor than to get a gift they wouldn’t use; and 70% plan to give as much as they did last year. Enabling customers to give contributions through your store’s program is one way to bring customers in, start conversations and create mutual goodwill that can last well into 2013.

Here are a few ideas to build loyalty and tie-in promotions to your current loyalty program around the holidays:

1. Send an e-mail campaign to your current customer base highlighting which causes you’re involved in and how they can donate. At the same time, promote your loyalty rewards program for 2013 by offering to donate something in their name if they become a member, or giving them “free” points to join.
2. Take advantage of end-of-the-year crowds by ramping up sales efforts for pre-paid maintenance plans. What better gift can a person give than a year’s worth of peace of mind? Again, maybe you can tie an incentive such as a donation to a charity of their choice when they sign up for a pre-paid maintenance program.
3. Create a fun, loyalty-building campaign like this “Christmas Cookie” cookbook that Howdy Honda produced last year. Every person who sent in or posted a Christmas cookie recipe on Howdy Honda’s Facebook page received 10,000 bonus rewards points towards any service of their choice.

The holiday season can add a lot to a dealership’s bottom line; but there’s nothing wrong with leveraging a little goodwill so you can build customer loyalty and set yourself up for a great 2013 as well. 

Many dealerships price prepaid maintenance programs (PMPs) high enough to shatter success from the start. Thinking that the real benefit comes from profit built into the plan along with forfeiture, they create a price point that’s prohibitive. While some new buyers will take the bait, the typical consumer, when asked to pay $895 for three years of scheduled maintenance, simply adds up the cost of nine or ten oil changes and a half dozen tire rotations and says, “Thanks, but no thanks!”

Successful PMPs are priced in such a way that even if a customer pulls out a calculator and – looking at the service menu – adds up the pricing for oil changes and tire rotations, the total represents at least an equal amount to what the F&I manager is charging them for the PMP.

Dealers who understand the full purpose and potential of PMPs price them well below the actual retail value. Instead of trying to turn huge profits in the F&I office, these dealers focus on the long-term potential of each customer. When incremental upsell can average over $90 per visit, dealers quickly see revenue increase. Statistics also show that up to 83% of customers will repurchase a future vehicle if the dealer can keep them returning to their service lane for regularly scheduled maintenance. With these two factors alone, even a PMP given away for free would more than pay for itself by the end of its contracted term.

With this type of program properly priced and executed, PMP sales penetrations can reach up to 50% or more, providing dealers opportunities to continually win over their customers.

Does your dealership sell PMPs? If your penetration is less than 50%, you could be pricing them too high.

Many dealerships price prepaid maintenance programs (PMPs) high enough to shatter success from the start. Thinking that the real benefit comes from profit built into the plan along with forfeiture, they create a price point that’s prohibitive. While some new buyers will take the bait, the typical consumer, when asked to pay $895 for three years of scheduled maintenance, simply adds up the cost of nine or ten oil changes and a half dozen tire rotations and says, “Thanks, but no thanks!”

Successful PMPs are priced in such a way that even if a customer pulls out a calculator and – looking at the service menu – adds up the pricing for oil changes and tire rotations, the total represents at least an equal amount to what the F&I manager is charging them for the PMP.

Dealers who understand the full purpose and potential of PMPs price them well below the actual retail value. Instead of trying to turn huge profits in the F&I office, these dealers focus on the long-term potential of each customer. When incremental upsell can average over $90 per visit, dealers quickly see revenue increase. Statistics also show that up to 83% of customers will repurchase a future vehicle if the dealer can keep them returning to their service lane for regularly scheduled maintenance. With these two factors alone, even a PMP given away for free would more than pay for itself by the end of its contracted term.

With this type of program properly priced and executed, PMP sales penetrations can reach up to 50% or more, providing dealers opportunities to continually win over their customers.

Does your dealership sell PMPs? If your penetration is less than 50%, you could be pricing them too high.

General Motors recently announced a customer loyalty initiative to increase its customer retention rates from 52% to 58%. The car manufacturer has assigned a concrete value for every percentage point of improvement in customer retention rates: $700 million. If GM achieves their goal of 58% customer retention, it will add $4.2 billion in annual revenue to the bottom line.

Six percentage points may not sound like a lot, but 52% is the industry’s average and 58% would put GM in the same category as Toyota Motor Corp., the industry leader in customer retention rates. GM will soon be rolling out its rewards program, which will probably be similar to Toyota’s Rewards Points program and also to Ford’s Owner Advantage Rewards program, which both companies tout as a way of saying “thank you for your business each time you purchase parts or service from your participating dealership.”

It’s clear the car manufacturers are recognizing that customer loyalty is more than just a catch phrase: customer loyalty adds real dollars to the bottom line. If it can add $4.2 billion to GM’s ledger, what can it do for your dealership?

Earlier this year we released an e-book detailing the profits that dealerships realize as a result of enrolling customers in a loyalty rewards program. We analyzed more than 6 million repair order transactions in 72 dealerships, comparing loyalty program member spend versus non-member spend. The results speak for themselves:

Ÿ • Members visit service departments at least 1.6X more frequently during the year than non-members

Ÿ • Members spend $662.01 in service departments annually compared to $336.63 by non-members

Ÿ • Dealers see an average increase of $44 customer pay RO per visit, by members

Ÿ • The average customer retention rate of program members is $56.98% -- think GM would be happy with that?

Ÿ • Dealers sell an average of 15 additional units each month to loyalty program members who redeem their rewards points towards a vehicle purchase

Tom Wood Ford in Indianapolis, IN started their loyalty program in 2007. From 2008 to 2011, Service Manager Tom Kashman says his gross profit per month doubled. If you could double your service revenue, increase your customer pay RO revenue, and sell more units to loyalty program members, how much would that add to your dealership’s bottom line? Find out the real numbers that other dealerships have achieved by downloading our free e-book, The Hard Facts & Financial Impact Report: Auto Dealership Loyalty Programs and the Effects They Have on Profitability http://www.media-trac.com/resources/whitepapers.shtml

General Motors recently announced a customer loyalty initiative to increase its customer retention rates from 52% to 58%. The car manufacturer has assigned a concrete value for every percentage point of improvement in customer retention rates: $700 million. If GM achieves their goal of 58% customer retention, it will add $4.2 billion in annual revenue to the bottom line.

Six percentage points may not sound like a lot, but 52% is the industry’s average and 58% would put GM in the same category as Toyota Motor Corp., the industry leader in customer retention rates. GM will soon be rolling out its rewards program, which will probably be similar to Toyota’s Rewards Points program and also to Ford’s Owner Advantage Rewards program, which both companies tout as a way of saying “thank you for your business each time you purchase parts or service from your participating dealership.”

It’s clear the car manufacturers are recognizing that customer loyalty is more than just a catch phrase: customer loyalty adds real dollars to the bottom line. If it can add $4.2 billion to GM’s ledger, what can it do for your dealership?

Earlier this year we released an e-book detailing the profits that dealerships realize as a result of enrolling customers in a loyalty rewards program. We analyzed more than 6 million repair order transactions in 72 dealerships, comparing loyalty program member spend versus non-member spend. The results speak for themselves:

Ÿ • Members visit service departments at least 1.6X more frequently during the year than non-members

Ÿ • Members spend $662.01 in service departments annually compared to $336.63 by non-members

Ÿ • Dealers see an average increase of $44 customer pay RO per visit, by members

Ÿ • The average customer retention rate of program members is $56.98% -- think GM would be happy with that?

Ÿ • Dealers sell an average of 15 additional units each month to loyalty program members who redeem their rewards points towards a vehicle purchase

Tom Wood Ford in Indianapolis, IN started their loyalty program in 2007. From 2008 to 2011, Service Manager Tom Kashman says his gross profit per month doubled. If you could double your service revenue, increase your customer pay RO revenue, and sell more units to loyalty program members, how much would that add to your dealership’s bottom line? Find out the real numbers that other dealerships have achieved by downloading our free e-book, The Hard Facts & Financial Impact Report: Auto Dealership Loyalty Programs and the Effects They Have on Profitability http://www.media-trac.com/resources/whitepapers.shtml