The LA Times reported this month that, in an interesting move, AMC Entertainment, the owner of over 300 movie theaters including 25 of the 50 highest grossing theaters in the United States, is offering its most loyal customers a chance to own a piece of the company prior to their planned $368 million initial public offering. According to the article, in a letter to members, Chief Executive Gerry Lopez said “We’re offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty.”

This ingenious idea does more than just offer its loyalty program members a special perk typically reserved for employees. It allows them to become stakeholders in the business. Nothing reinforces and strengthens loyalty more than when you own part of a company. These customers have been given an opportunity to achieve something that the average household wouldn’t be able to. Considering that many people don’t have investment accounts or stockbrokers which would allow them to buy minimal shares without incurring fees or requiring initial deposits to fund the account, the ability for the normal consumer to own a piece of the pie is attractive.

Disney runs a similar program that allows investors to purchase stock directly through them investing a minimum of $25 per month. Once the account has enough to purchase a share, Disney purchases it at the current market price for them and credits their account. As dividends are earned, they get reinvested into additional stock. One cannot argue with the level of loyalty in which Disney enjoys, that’s for certain.

Getting creative with how you reward your loyal customers is a great investment. As loyalty programs continue to flourish in retail, consumers now expect them. Sure a free bucket of popcorn is great but a owning a piece of the company is fantastic. Many of these loyalty members won’t buy stock in any quantity that would even register them on AMC’s ownership radar after the sale. There may even be limits to the quantities a single customer can purchase. Regardless, this is a creative way to get your customers invested in your company’s success with minimal cost.

Creating loyal customers is a challenge that businesses face continuously and also one that many business neglect. Without retention, a business cannot grow unless it’s acquiring new customers faster than it’s losing them and, for the most part, that’s a pricey growth strategy. AMC Entertainment has offered a loyalty program for years and the addition of offering those loyal customers this perk strengthens the sincerity of the program. This helps to elevate their reward program from one that is expected or normal to one that adds sincerity to their message of appreciation.

This is certainly not a replacement for providing a great customer experience. Treat them poorly and it won’t matter if they own a share in your company. 

The LA Times reported this month that, in an interesting move, AMC Entertainment, the owner of over 300 movie theaters including 25 of the 50 highest grossing theaters in the United States, is offering its most loyal customers a chance to own a piece of the company prior to their planned $368 million initial public offering. According to the article, in a letter to members, Chief Executive Gerry Lopez said “We’re offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty.”

This ingenious idea does more than just offer its loyalty program members a special perk typically reserved for employees. It allows them to become stakeholders in the business. Nothing reinforces and strengthens loyalty more than when you own part of a company. These customers have been given an opportunity to achieve something that the average household wouldn’t be able to. Considering that many people don’t have investment accounts or stockbrokers which would allow them to buy minimal shares without incurring fees or requiring initial deposits to fund the account, the ability for the normal consumer to own a piece of the pie is attractive.

Disney runs a similar program that allows investors to purchase stock directly through them investing a minimum of $25 per month. Once the account has enough to purchase a share, Disney purchases it at the current market price for them and credits their account. As dividends are earned, they get reinvested into additional stock. One cannot argue with the level of loyalty in which Disney enjoys, that’s for certain.

Getting creative with how you reward your loyal customers is a great investment. As loyalty programs continue to flourish in retail, consumers now expect them. Sure a free bucket of popcorn is great but a owning a piece of the company is fantastic. Many of these loyalty members won’t buy stock in any quantity that would even register them on AMC’s ownership radar after the sale. There may even be limits to the quantities a single customer can purchase. Regardless, this is a creative way to get your customers invested in your company’s success with minimal cost.

Creating loyal customers is a challenge that businesses face continuously and also one that many business neglect. Without retention, a business cannot grow unless it’s acquiring new customers faster than it’s losing them and, for the most part, that’s a pricey growth strategy. AMC Entertainment has offered a loyalty program for years and the addition of offering those loyal customers this perk strengthens the sincerity of the program. This helps to elevate their reward program from one that is expected or normal to one that adds sincerity to their message of appreciation.

This is certainly not a replacement for providing a great customer experience. Treat them poorly and it won’t matter if they own a share in your company. 

In the October 2013 edition of Dealer magazine, I examined a phenomenon that occurred last Christmas. Partnering with luxury shopping site Gilt.com, Starbucks offered an ultra-exclusive steel metal loyalty card for sale on their site for $450. The loyalty cards came pre-loaded with $400 in Starbucks credit and there were only 5,000 available. You might think nobody would want to pay $450 for a loyalty card that they could get for free, but you’d be wrong. The cards sold out in 6 minutes generating $2,225,000 in sales. Almost immediately, these cards were listed on eBay and have sold for $2500 and up. In fact, even a year later, cards with no pre-loaded credit are still selling upwards of $625.

This month, Starbucks again offered these metal loyalty cards for sale. However, this time they only made 1,000 of them.  According to an article in USA Today, “the company made a ‘deliberate decision’ to make even fewer metal cards this year.” Group president, Cliff Burrows, is quoted in the article as saying “It’s now more special. We’ve elevated it to a new level.” This gift bestows upon the owner an instant Gold level status within their rewards program for a year. To maintain that status after the year, they must make purchases that would earn it just like anyone else.

With 5,000 metal cards already in circulation from last year’s sale, you’d think that the novelty of the card would have worn off and that those that wanted one would have found it by now. Introducing 1,000 more into the market simply means that 6,000 people will now own a metal loyalty card. That’s really not a lot considering that the card is good at any Starbucks location worldwide. To put it into perspective, if the cards were only sold in the United States, that would mean that, on average, only 120 people in each state would own one.

The demand for these cards; and the prestige that one gets form being able to whip out this metal card while the baristas and other consumers gawk; is apparently still very strong. This year’s stock of the 1,000 cards sold out in seconds, according to NBC News. The article goes on to say that the Gilt.com website received 2.5 times the traffic it did on Cyber Monday. Within 30 minutes of the cards going live there were over 11,000 people signed up on a wait-list to purchase one.

The Starbucks loyalty card program is one of the strongest in existence. “Our Starbucks card had its best holiday season in history, as measured by any metric, with more than $1 billion loaded during Q1, the most ever loaded onto any kind of Starbucks card.” Said CEO Howard Schultz.

These new metal cards are currently selling on eBay for upwards of $1,700+ dollars; and that’s before a single card has even been shipped by Gilt. With Christmas quickly approaching, the demand for these will only increase as people scramble to find that one-of-a-kind gift. The fanaticism and demand for these exclusive, hand-made loyalty cards, is testament to the strong brand and loyalty program that Starbucks has been able to develop over the years. For a company to transform its loyalty card from one that is hardly top of mind other than at the point of sale, to that of a coveted status symbol, is phenomenal.

Starbucks has proven once again that customers want to feel special. B offering an elite limited edition loyalty card, they’ve transformed 6,000 people into brand advocates while generating publicity that money can’t buy.

In the October 2013 edition of Dealer magazine, I examined a phenomenon that occurred last Christmas. Partnering with luxury shopping site Gilt.com, Starbucks offered an ultra-exclusive steel metal loyalty card for sale on their site for $450. The loyalty cards came pre-loaded with $400 in Starbucks credit and there were only 5,000 available. You might think nobody would want to pay $450 for a loyalty card that they could get for free, but you’d be wrong. The cards sold out in 6 minutes generating $2,225,000 in sales. Almost immediately, these cards were listed on eBay and have sold for $2500 and up. In fact, even a year later, cards with no pre-loaded credit are still selling upwards of $625.

This month, Starbucks again offered these metal loyalty cards for sale. However, this time they only made 1,000 of them.  According to an article in USA Today, “the company made a ‘deliberate decision’ to make even fewer metal cards this year.” Group president, Cliff Burrows, is quoted in the article as saying “It’s now more special. We’ve elevated it to a new level.” This gift bestows upon the owner an instant Gold level status within their rewards program for a year. To maintain that status after the year, they must make purchases that would earn it just like anyone else.

With 5,000 metal cards already in circulation from last year’s sale, you’d think that the novelty of the card would have worn off and that those that wanted one would have found it by now. Introducing 1,000 more into the market simply means that 6,000 people will now own a metal loyalty card. That’s really not a lot considering that the card is good at any Starbucks location worldwide. To put it into perspective, if the cards were only sold in the United States, that would mean that, on average, only 120 people in each state would own one.

The demand for these cards; and the prestige that one gets form being able to whip out this metal card while the baristas and other consumers gawk; is apparently still very strong. This year’s stock of the 1,000 cards sold out in seconds, according to NBC News. The article goes on to say that the Gilt.com website received 2.5 times the traffic it did on Cyber Monday. Within 30 minutes of the cards going live there were over 11,000 people signed up on a wait-list to purchase one.

The Starbucks loyalty card program is one of the strongest in existence. “Our Starbucks card had its best holiday season in history, as measured by any metric, with more than $1 billion loaded during Q1, the most ever loaded onto any kind of Starbucks card.” Said CEO Howard Schultz.

These new metal cards are currently selling on eBay for upwards of $1,700+ dollars; and that’s before a single card has even been shipped by Gilt. With Christmas quickly approaching, the demand for these will only increase as people scramble to find that one-of-a-kind gift. The fanaticism and demand for these exclusive, hand-made loyalty cards, is testament to the strong brand and loyalty program that Starbucks has been able to develop over the years. For a company to transform its loyalty card from one that is hardly top of mind other than at the point of sale, to that of a coveted status symbol, is phenomenal.

Starbucks has proven once again that customers want to feel special. B offering an elite limited edition loyalty card, they’ve transformed 6,000 people into brand advocates while generating publicity that money can’t buy.

A new benchmark report published last month by RSR Research, provides some interesting information about retailers and the shifts in focus and importance from 2012 to 2013.

According to the study, 61 percent of retailers feel customer retention has become more difficult, and building loyalty has become more challenging. This is a 10 percent increase from 2012. The study advised “if retailers are going to have collective leadership and responsibility for the customer experience, then they need to ensure that everyone is working off of the same vision for what the customer experience should be.”

In many businesses, there exists a general expectation that all employees proactively ensure that customers have a great experience. The problem is that there is typically not a single person charged with being responsible for it. You cannot have a goal of providing a great customer experience if you aren’t tracking whether or not you are providing it. You can’t rely solely on CSI scores and surveys from your OEM. You must have a process in place that surveys your customers and an employee in charge of analyzing the results and making process changes as needed. According to the study, “leaders identify – at an inordinate rate – that an executive tasked with managing and improving the overall customer experience is key to ensuring new marketing techniques have relevance.”

The study further found that 61 percent of business leaders believe that there needs to be a greater focus on customer experience and less on the product. At the same time, 44 percent responded that their marketing departments don’t spend enough time building customer loyalty.

And, while 52 percent of businesses with above average sales growth say that their marketing department is not spending enough time acquiring new customers; surprisingly this number rises to 100% for businesses with below average sales growth.

Dealerships have always spent the majority of their marketing budget on new customer acquisition. As the customer base grows, they may then shift some of their budget to customer retention. The problem is that while focusing on acquiring new customers, many dealerships fail to also pay attention to customer defection. The result is that they end up simply replacing defecting customers with new ones. And, rather than achieving growth, simply maintain the status quo.

According to the study, any growth strategy of acquiring new customers “may actually mean you can’t afford to take your eye off the target when it comes to keeping existing customers happy – because they can so easily share their dissatisfaction in social spheres and thereby chase new customers away.”

Business leaders increasingly recognize that the key to a successful growth strategy is to recognize that new customer acquisition must include a strategy for customer retention. It does not work to simply keep refocusing your efforts from one to the other. There has to be a symbiotic relationship between them.

Don’t try to plug the dam by running around sticking your finger in one hole to just to have another leak appear. A strategy that combines acquisition with retention along with successful execution will allow you to plug all of the holes at the same time. 

A new benchmark report published last month by RSR Research, provides some interesting information about retailers and the shifts in focus and importance from 2012 to 2013.

According to the study, 61 percent of retailers feel customer retention has become more difficult, and building loyalty has become more challenging. This is a 10 percent increase from 2012. The study advised “if retailers are going to have collective leadership and responsibility for the customer experience, then they need to ensure that everyone is working off of the same vision for what the customer experience should be.”

In many businesses, there exists a general expectation that all employees proactively ensure that customers have a great experience. The problem is that there is typically not a single person charged with being responsible for it. You cannot have a goal of providing a great customer experience if you aren’t tracking whether or not you are providing it. You can’t rely solely on CSI scores and surveys from your OEM. You must have a process in place that surveys your customers and an employee in charge of analyzing the results and making process changes as needed. According to the study, “leaders identify – at an inordinate rate – that an executive tasked with managing and improving the overall customer experience is key to ensuring new marketing techniques have relevance.”

The study further found that 61 percent of business leaders believe that there needs to be a greater focus on customer experience and less on the product. At the same time, 44 percent responded that their marketing departments don’t spend enough time building customer loyalty.

And, while 52 percent of businesses with above average sales growth say that their marketing department is not spending enough time acquiring new customers; surprisingly this number rises to 100% for businesses with below average sales growth.

Dealerships have always spent the majority of their marketing budget on new customer acquisition. As the customer base grows, they may then shift some of their budget to customer retention. The problem is that while focusing on acquiring new customers, many dealerships fail to also pay attention to customer defection. The result is that they end up simply replacing defecting customers with new ones. And, rather than achieving growth, simply maintain the status quo.

According to the study, any growth strategy of acquiring new customers “may actually mean you can’t afford to take your eye off the target when it comes to keeping existing customers happy – because they can so easily share their dissatisfaction in social spheres and thereby chase new customers away.”

Business leaders increasingly recognize that the key to a successful growth strategy is to recognize that new customer acquisition must include a strategy for customer retention. It does not work to simply keep refocusing your efforts from one to the other. There has to be a symbiotic relationship between them.

Don’t try to plug the dam by running around sticking your finger in one hole to just to have another leak appear. A strategy that combines acquisition with retention along with successful execution will allow you to plug all of the holes at the same time. 

As social media gets more and more entrenched in our daily lives, it’s becoming the easiest and most visible place for one of the most important things your company can have but can’t buy – word-of-mouth marketing.

You can have your customer experience down pat, a loyalty program that rocks and customers lined up to do business with you; but does that mean you’re leveraging everything you can?

Many social media sites like Facebook, Foursquare, and Yelp have some sort of “deal” type feature. What would happen if you take advantage of this feature and tie it in to your existing loyalty program?

Here are some things you may or may not know about these deal features. (I’m going to focus on Facebook since it has the most advantages, in my opinion.) There have been many studies that have concluded that 60% of people “Like” a business’s Facebook page for special offers and deals. Facebook has two features: check-in deals and offers. I’m going to explain how check-in deals can benefit your dealership since this feature is free and easy to maintain.

When you have a Facebook check-in deal running, a customer would go to Facebook and “check-in” using their mobile device to your dealership. When they do this, it shares with their entire network that they are at your dealership. That’s great exposure! It gets better however. If you have a check-in deal, and the customer checks-in and claims the deal, not only does it share it with their network, it will share that 1) they are at your dealership 2) they claimed a deal and 3) the specifics of the deal, quantity remaining and deal expiration date. The best part about this is that these posts to their walls go into their friend’s news feeds and cannot be hidden!

Here’s an example of what one looked like after it was claimed:

Imagine if your “deal” was tied to your loyalty program. What would that look like?

Let’s say you give “points” for each dollar spent at your store towards your customer’s loyalty account. At some point you’ve placed a value on these points. How much would this advertisement, which, in reality is word-of-mouth advertising to your customer’s entire social network, be worth?

Instead of the check-in deal being “20% off any order,” it could be “1,000 loyalty program bonus points” with a check-in. Of course, you could disclaim it as a one time offer per loyalty member or one per customer per day and include that the check-in must correspond with a purchase to avoid people simply stopping by to claim their free loyalty points without spending any money. However, even they just stopped by, wouldn’t that endorsement to their entire network be worth something to you?

If you could get every one of your customers to recommend your dealership to their friends, you would. You certainly try all the time. You ask for referrals. You might even incentivize current customer for bringing you new ones.

Word-of-mouth advertising is still one of the most powerful forms of marketing in existence. The fact remains that it’s continuing to shift online all the time. Leveraging some of these social sites to increase the visibility of your loyalty program by incentivizing your customer for “checking-in” and sharing their endorsement of your dealership with their entire social networks is worth its weight in gold.

You couldn’t pay for better marketing.

[Note: Facebook is merging its "check-in deals" with it's "Offers" product as of July 1, 2013. It is still free but allows for more flexibility in creating different types of promotions. You can read more here [LINK])

As social media gets more and more entrenched in our daily lives, it’s becoming the easiest and most visible place for one of the most important things your company can have but can’t buy – word-of-mouth marketing.

You can have your customer experience down pat, a loyalty program that rocks and customers lined up to do business with you; but does that mean you’re leveraging everything you can?

Many social media sites like Facebook, Foursquare, and Yelp have some sort of “deal” type feature. What would happen if you take advantage of this feature and tie it in to your existing loyalty program?

Here are some things you may or may not know about these deal features. (I’m going to focus on Facebook since it has the most advantages, in my opinion.) There have been many studies that have concluded that 60% of people “Like” a business’s Facebook page for special offers and deals. Facebook has two features: check-in deals and offers. I’m going to explain how check-in deals can benefit your dealership since this feature is free and easy to maintain.

When you have a Facebook check-in deal running, a customer would go to Facebook and “check-in” using their mobile device to your dealership. When they do this, it shares with their entire network that they are at your dealership. That’s great exposure! It gets better however. If you have a check-in deal, and the customer checks-in and claims the deal, not only does it share it with their network, it will share that 1) they are at your dealership 2) they claimed a deal and 3) the specifics of the deal, quantity remaining and deal expiration date. The best part about this is that these posts to their walls go into their friend’s news feeds and cannot be hidden!

Here’s an example of what one looked like after it was claimed:

Imagine if your “deal” was tied to your loyalty program. What would that look like?

Let’s say you give “points” for each dollar spent at your store towards your customer’s loyalty account. At some point you’ve placed a value on these points. How much would this advertisement, which, in reality is word-of-mouth advertising to your customer’s entire social network, be worth?

Instead of the check-in deal being “20% off any order,” it could be “1,000 loyalty program bonus points” with a check-in. Of course, you could disclaim it as a one time offer per loyalty member or one per customer per day and include that the check-in must correspond with a purchase to avoid people simply stopping by to claim their free loyalty points without spending any money. However, even they just stopped by, wouldn’t that endorsement to their entire network be worth something to you?

If you could get every one of your customers to recommend your dealership to their friends, you would. You certainly try all the time. You ask for referrals. You might even incentivize current customer for bringing you new ones.

Word-of-mouth advertising is still one of the most powerful forms of marketing in existence. The fact remains that it’s continuing to shift online all the time. Leveraging some of these social sites to increase the visibility of your loyalty program by incentivizing your customer for “checking-in” and sharing their endorsement of your dealership with their entire social networks is worth its weight in gold.

You couldn’t pay for better marketing.

[Note: Facebook is merging its "check-in deals" with it's "Offers" product as of July 1, 2013. It is still free but allows for more flexibility in creating different types of promotions. You can read more here [LINK])

Creating a loyal customer is sort of like getting married. The introduction is followed by a period of courtship and, if all goes well, commitments are made. Loyalty in the automotive world is something that everyone battles from the OEM level to the dealership. Did you know, however, that the longer you’ve had a customer the harder it is to keep them?

Logic would dictate that you would need to focus more on creating customer loyalty in the beginning than after the marriage. However, according to R.L. Polk, “loyalty rates decline after the third year of ownership and continue to decline after the fourth year, and every year after that.” Polk attributes this fact to “boredom”. Their studies show that the longer a customer owns a car, the less exciting the ownership experience becomes.

Just as in marriage, there’s what is referred to as a “honeymoon” period. You’ve taken the vows and began your new life together, and everything is wonderful. Apparently, according to Polk, a similar period exists when it comes to customer loyalty and retention. As we consider ways to increase customer retention, it seems as if length of ownership is extremely important. It certainly makes sense that, no matter how long you’ve had a customer and no matter how great of a relationship you’ve had with them, if they get “bored” and switch to a new make, you’ve definitely lost a sale but chances are probably very good that you will lose them as a service customer.

The fight against “boredom” is something that OEMs take on by introducing fresh models with new features, more powerful engines, sleeker more modern looks and technological advances. They encourage leasing by offering low residuals and money factors with the hopes that the customer will stay loyal by returning to lease another vehicle.

How do you help buck this trend and insure that your customers stay loyal? One way is certainly by making the customer experience exceptional. People certainly love excellent customer service, and it is one of your greatest weapons in creating loyal customers. Another way is by implementing a dealership loyalty program that incentivizes customers to keep doing business with you.  There’s a reason that almost every major retailer in the US has a rewards program of one form or another. It allows you to track how your customers are spending money with you which then gives you the data to create offers better tailored to them. 

No matter what you do, make sure that you’re retention strategy isn’t focusing solely on creating loyalty in new customers. Analyze your sales history and shift some of your focus to customers who purchased 24-36 months ago and you’ll be well on your way to helping your OEM increase brand retention while insuring that you’re giving your dealership the opportunity to intervene with your loyal customers before they get bored.

Creating a loyal customer is sort of like getting married. The introduction is followed by a period of courtship and, if all goes well, commitments are made. Loyalty in the automotive world is something that everyone battles from the OEM level to the dealership. Did you know, however, that the longer you’ve had a customer the harder it is to keep them?

Logic would dictate that you would need to focus more on creating customer loyalty in the beginning than after the marriage. However, according to R.L. Polk, “loyalty rates decline after the third year of ownership and continue to decline after the fourth year, and every year after that.” Polk attributes this fact to “boredom”. Their studies show that the longer a customer owns a car, the less exciting the ownership experience becomes.

Just as in marriage, there’s what is referred to as a “honeymoon” period. You’ve taken the vows and began your new life together, and everything is wonderful. Apparently, according to Polk, a similar period exists when it comes to customer loyalty and retention. As we consider ways to increase customer retention, it seems as if length of ownership is extremely important. It certainly makes sense that, no matter how long you’ve had a customer and no matter how great of a relationship you’ve had with them, if they get “bored” and switch to a new make, you’ve definitely lost a sale but chances are probably very good that you will lose them as a service customer.

The fight against “boredom” is something that OEMs take on by introducing fresh models with new features, more powerful engines, sleeker more modern looks and technological advances. They encourage leasing by offering low residuals and money factors with the hopes that the customer will stay loyal by returning to lease another vehicle.

How do you help buck this trend and insure that your customers stay loyal? One way is certainly by making the customer experience exceptional. People certainly love excellent customer service, and it is one of your greatest weapons in creating loyal customers. Another way is by implementing a dealership loyalty program that incentivizes customers to keep doing business with you.  There’s a reason that almost every major retailer in the US has a rewards program of one form or another. It allows you to track how your customers are spending money with you which then gives you the data to create offers better tailored to them. 

No matter what you do, make sure that you’re retention strategy isn’t focusing solely on creating loyalty in new customers. Analyze your sales history and shift some of your focus to customers who purchased 24-36 months ago and you’ll be well on your way to helping your OEM increase brand retention while insuring that you’re giving your dealership the opportunity to intervene with your loyal customers before they get bored.