When a dealership offers a prepaid maintenance program (PPM) to its customers, what does the store hope to get in return? Customer affinity is one thing, but there are other benefits to this bottom line-driving F&I product.

Not only does a PPM plan deliver affinity, it provides dealers with profitable affinity. And experience shows that customers who use a dealer’s repair facilities are 17 times more likely to purchase their next vehicle from that dealer. As great as that is, the true long-term benefit is that PPM-plan customers frequently purchase additional customer-pay retail parts and labor services that boost repair order profitability.

To capture that opportunity, dealerships need to commit themselves to delivering a safety-and-reliability inspection to every vehicle owner. Doing so helps verify the needs that brought the vehicle into the shop. It also allows technicians to identify other legitimate maintenance and repair needs beyond those covered by the customer’s PPM plan.

Boosting a PPM repair order by upselling an additional $150 to $350 of retail customer-pay business will add serious money to the bottom line. When a PPM plan is built into used-vehicle prices, a dealer can bump after-sale service from about 15 percent to upwards of 50 percent.

A dealer who plugs a basic three-product PPM plan into every one of the 600 used units he or she sells each year can expect to generate more than $1.3 million in total incremental service revenue. This return is based on a $682 retail upsell per customer per service visit over the two-year plan term, even after factoring in a 55 percent utilization rate and plan costs.

PPMs Convert to More RO Dollars

Studies of current customers purchasing a PPM program reveal a remarkable statistic: While current industry stats indicate that roughly one in five customers return to the dealership for service, customers who opt for a PPM plan are visiting their servicing dealers at a rate of 72 percent.

Additionally, plan holders that return to the dealership to redeem their plan benefits purchase incremental retail service about 90 percent of the time. In addition to the increased visit frequency, those plan holders are spending an average of $128 per visit, which includes upsell products and services.

A dealer who writes 1,500 repair orders per month can easily sell 150 to 200 maintenance policies by simply asking customers visiting the service department. In the F&I office, it takes a 500- to 600-unit store to generate the same 200 maintenance policies.

Given these upsell profit opportunities, it’s difficult to fathom why some dealers have had disappointing experiences with PPM programs. Many have said that customers simply won’t buy these plans. But upon closer inspection, it becomes clear why customers wouldn’t be interested: the plans were loaded with services of low value to the customer yet priced quite profitably for the dealership. This is unfortunate, as the nature of these low-value plans – and dealers’ inability to sell the plans – result in lost service business for the dealer.

Newer, redesigned PPM programs help to eliminate those problems by offering a wider range of products and services. These programs – usually administered and managed to offer what is considered valuable to the dealership’s customers and market – seem to really work for both the consumer and dealer.

Next-Gen PPM Plans

Today’s PPM plans also are software-driven, handling once time-consuming chores like plan registration, service claims and premium submission. Because dealers control these programs, any reserve or forfeiture, or money remaining in reserve for plan services not redeemed by purchases, is immediate.

Every plan must also account for forfeiture, i.e., when a customer terminates the plan early or does not use the plan for whatever reason. For most traditional plans, the third-party administrator holds a dealer-funded reserve. It is from this reserve that the administrator could take up to 60 percent of the value of the cancelled services as part of its fee structure.

The new generation of self-administered, self-managed plans offers attractive advantages to today’s market and value-conscious buyer. Custom plan content really appeals to them, and it makes these plans more attractive. These plans also enhance the owner’s investment by having the vehicle maintained by the dealership that sold his or her plan. This, in turn, enhances opportunity for alert advisors to upsell additional services for healthier repair orders.

Originally Published in F&I and Showroom Magazine, October 2011

When a dealership offers a prepaid maintenance program (PPM) to its customers, what does the store hope to get in return? Customer affinity is one thing, but there are other benefits to this bottom line-driving F&I product.

Not only does a PPM plan deliver affinity, it provides dealers with profitable affinity. And experience shows that customers who use a dealer’s repair facilities are 17 times more likely to purchase their next vehicle from that dealer. As great as that is, the true long-term benefit is that PPM-plan customers frequently purchase additional customer-pay retail parts and labor services that boost repair order profitability.

To capture that opportunity, dealerships need to commit themselves to delivering a safety-and-reliability inspection to every vehicle owner. Doing so helps verify the needs that brought the vehicle into the shop. It also allows technicians to identify other legitimate maintenance and repair needs beyond those covered by the customer’s PPM plan.

Boosting a PPM repair order by upselling an additional $150 to $350 of retail customer-pay business will add serious money to the bottom line. When a PPM plan is built into used-vehicle prices, a dealer can bump after-sale service from about 15 percent to upwards of 50 percent.

A dealer who plugs a basic three-product PPM plan into every one of the 600 used units he or she sells each year can expect to generate more than $1.3 million in total incremental service revenue. This return is based on a $682 retail upsell per customer per service visit over the two-year plan term, even after factoring in a 55 percent utilization rate and plan costs.

PPMs Convert to More RO Dollars

Studies of current customers purchasing a PPM program reveal a remarkable statistic: While current industry stats indicate that roughly one in five customers return to the dealership for service, customers who opt for a PPM plan are visiting their servicing dealers at a rate of 72 percent.

Additionally, plan holders that return to the dealership to redeem their plan benefits purchase incremental retail service about 90 percent of the time. In addition to the increased visit frequency, those plan holders are spending an average of $128 per visit, which includes upsell products and services.

A dealer who writes 1,500 repair orders per month can easily sell 150 to 200 maintenance policies by simply asking customers visiting the service department. In the F&I office, it takes a 500- to 600-unit store to generate the same 200 maintenance policies.

Given these upsell profit opportunities, it’s difficult to fathom why some dealers have had disappointing experiences with PPM programs. Many have said that customers simply won’t buy these plans. But upon closer inspection, it becomes clear why customers wouldn’t be interested: the plans were loaded with services of low value to the customer yet priced quite profitably for the dealership. This is unfortunate, as the nature of these low-value plans – and dealers’ inability to sell the plans – result in lost service business for the dealer.

Newer, redesigned PPM programs help to eliminate those problems by offering a wider range of products and services. These programs – usually administered and managed to offer what is considered valuable to the dealership’s customers and market – seem to really work for both the consumer and dealer.

Next-Gen PPM Plans

Today’s PPM plans also are software-driven, handling once time-consuming chores like plan registration, service claims and premium submission. Because dealers control these programs, any reserve or forfeiture, or money remaining in reserve for plan services not redeemed by purchases, is immediate.

Every plan must also account for forfeiture, i.e., when a customer terminates the plan early or does not use the plan for whatever reason. For most traditional plans, the third-party administrator holds a dealer-funded reserve. It is from this reserve that the administrator could take up to 60 percent of the value of the cancelled services as part of its fee structure.

The new generation of self-administered, self-managed plans offers attractive advantages to today’s market and value-conscious buyer. Custom plan content really appeals to them, and it makes these plans more attractive. These plans also enhance the owner’s investment by having the vehicle maintained by the dealership that sold his or her plan. This, in turn, enhances opportunity for alert advisors to upsell additional services for healthier repair orders.

Originally Published in F&I and Showroom Magazine, October 2011

Nothing creates warm-fuzzy feelings quite like cookies. That’s why Howdy Honda in Austin , TX recently used LoyaltyTrac, their service rewards program, to conduct an email campaign centered around the holidays and cookies.

Colorful, cheerful emails were sent to all of Howdy Honda’s service reward members, encouraging them to submit their favorite holiday cookie recipe to be included in a downloadable cookbook that the dealership would create and distribute in its December email. Members were encouraged (but not required) to post their recipes on Howdy Honda’s Facebook wall. Every member who sent in a recipe received a bonus 10,000 service rewards points redeemable towards any service of choice.

The email campaign achieved an open rate of nearly 20%, far surpassing the Direct Marketing Association’s (DMS) average of 12-14% for opt-in lists. More than 50 members clicked through to the dealer’s Facebook page, resulting in many cookie recipes being posted on their Facebook wall. The campaign’s focus was to engage service rewards members using social media, but a nice added bonus was that the campaign also generated service appointments that averaged $250 per RO in customer pay work.

Other LoyaltyTrac auto dealerships have achieved similar results with various non-solicit campaigns. Emailing seasonal recipes to service rewards members as a “thank you” or vehicle safety tips and do-it-yourself guidelines are other examples of how you can gain appreciation from your customers.

Howdy Honda’s cookie campaign is just one example of how customized campaigns work to build customer loyalty. LoyaltyTrac is a rewards-based loyalty and retention platform that may be points-based, activity-based or incentive-based, and extends the experience of a dealer’s loyalty program into Facebook and Twitter by making customers’ actions in social media both trackable and rewardable.

However, before you design your own campaign, LoyaltyTrac makes the following recommendation: service managers should assign every recipe to one employee so they can bring in the various treats. After all, you wouldn’t want to hand out recipes that you haven’t personally tried, would you? We didn’t think so!

Happy Holidays and enjoy the treats, customer goodwill and extra revenue!

Nothing creates warm-fuzzy feelings quite like cookies. That’s why Howdy Honda in Austin , TX recently used LoyaltyTrac, their service rewards program, to conduct an email campaign centered around the holidays and cookies.

Colorful, cheerful emails were sent to all of Howdy Honda’s service reward members, encouraging them to submit their favorite holiday cookie recipe to be included in a downloadable cookbook that the dealership would create and distribute in its December email. Members were encouraged (but not required) to post their recipes on Howdy Honda’s Facebook wall. Every member who sent in a recipe received a bonus 10,000 service rewards points redeemable towards any service of choice.

The email campaign achieved an open rate of nearly 20%, far surpassing the Direct Marketing Association’s (DMS) average of 12-14% for opt-in lists. More than 50 members clicked through to the dealer’s Facebook page, resulting in many cookie recipes being posted on their Facebook wall. The campaign’s focus was to engage service rewards members using social media, but a nice added bonus was that the campaign also generated service appointments that averaged $250 per RO in customer pay work.

Other LoyaltyTrac auto dealerships have achieved similar results with various non-solicit campaigns. Emailing seasonal recipes to service rewards members as a “thank you” or vehicle safety tips and do-it-yourself guidelines are other examples of how you can gain appreciation from your customers.

Howdy Honda’s cookie campaign is just one example of how customized campaigns work to build customer loyalty. LoyaltyTrac is a rewards-based loyalty and retention platform that may be points-based, activity-based or incentive-based, and extends the experience of a dealer’s loyalty program into Facebook and Twitter by making customers’ actions in social media both trackable and rewardable.

However, before you design your own campaign, LoyaltyTrac makes the following recommendation: service managers should assign every recipe to one employee so they can bring in the various treats. After all, you wouldn’t want to hand out recipes that you haven’t personally tried, would you? We didn’t think so!

Happy Holidays and enjoy the treats, customer goodwill and extra revenue!

The holiday season is here – a time for free shipping and 20% off everything!

At least that’s what a bulk of the major retailers out there tend to focus on this time of year. For many of us – regardless of the holiday(s) we each celebrate – the focus of this holiday season is on family and friends, on creating memories and sharing traditions, on expressing gratitude and love. It is a season of goodwill and giving.

As a business, are you focusing on the steep rise in sales you can expect over the next two months or on the emotional aspects that impact so many this time of year? What do you think your customers are focusing on? Are the two one in the same?

These are questions that we need to ask ourselves as marketers, particularly in the medium of email marketing. With the barrage of emails that your customers are already receiving, how can you differentiate your email campaigns from all the competition – both in your industry and out? The following suggestions should help you start thinking of ways to make your email marketing efforts be more meaningful – and more successful – this holiday season.

1. Beware of Overkill

Over the last week, I have received at least one email each day from a major toy retailer. I expect that average to increase significantly over the coming weeks. When I initially signed up on the retailer’s mailing list, I read each email. Now, however, I honestly can’t remember the last time I opened an email from this retailer; if they don’t automatically filter to my junk mail, these emails are sent to my trash before I open anything I actually want to open and read.

This is classic email fatigue. When consumers receive emails with irrelevant content or too many emails in quick succession, they develop email fatigue. During the holidays, many retailers think that sending emails more frequently is a good thing; it keeps customers aware of sales, contests and other events. But consider that every other business is also amping up the number of emails they send, and eventually consumers just stop reading them. Fewer, highly targeted emails are more likely to give you the successful results you’re looking for than emailing every update to your entire distribution list.

2. “When” Matters

Are you planning to send out an email campaign on Cyber Monday (the first Monday after American Thanksgiving)? Several reports have estimated that consumers spent well over $1 Billion online on Cyber Monday in 2010. With such augmented consumer spending, it comes as no surprise that email marketing efforts increase significantly that one day each year. So perhaps it is a day you should avoid. Consider sending out any Cyber Monday promotions in advance to avoid getting lost in the glut of emails your customer will receive the day of.

Also, if you’re planning on sending out a holiday greeting to your customers (if not, you should), avoid sending it out on the actual holiday. Most of your customers won’t check their email inboxes on major holidays, increasing the odds of your greeting being read days after the holiday, if it gets read at all.

3. Go for the Open

The subject line is one of the most important aspects of your email marketing campaigns – in fact, it is the one single factor that most often determines whether or not your email gets opened. When email inboxes are full of ads and offers from countless businesses, you need to ensure your email’s stand out. A good subject line is the best way to catch your customer’s eye. Use personalization and humor. Appeal to your customers’ emotions. Brainstorming as a team is one of the best ways to develop solid subject lines, so don’t be afraid to run them past your coworkers. Use small A/B test groups from your database to see what works best. And be sure to use catchy header text to ensure your customers want to keep reading the email once it’s been opened.

4. Get Social

Remember all those “overkill” emails you’re not sending anymore? All that content is still vital to your holiday marketing; it just takes on a different form. Research reports are indicating that in the last year, social networks have surpassed search engines as the most visited batch of websites. Instead of creating new emails for each new promotion or event update, get social. Not only are social media sites like Facebook and Twitter great ways to reach large groups of customers, those posts can be shared and re-tweeted, increasing your visibility in ways that emails can never do.

Social platforms are also great ways to encourage involvement from your customers. An auto dealership in Texas that we work with is sending out an email campaign encouraging its loyalty club members to post their favorite cookie recipe on the dealership’s Facebook page. The members will not only receive loyalty club points, but this dealership will assemble each recipe into a cookbook that members will be able to download after the submission period closes. This is just one great example of using social media to engage your customers – and it’s something this dealership’s customers will not soon forget.

5. Don’t Sell

If every other retailer is offering free shipping and 20% off coupons, then you need to go against the flow. Find ways to differentiate your business from all the others out there competing for your customers’ attention – and purchases. Offer more than simple discounts and savings. The more unique your emails are, the more they’ll distinguish your business and the more likely they are to be shared with others.

We encourage our clients each year to significantly downplay sales and promotions this time of year, and we’re not the only ones. Constant Contact managing editor Martin Lieberman says, “Everyone is selling at holiday time. The more you can NOT sell, the more it will help you stand out from your competition. Shopping tips, gift-giving advice and entertaining content” are perfect examples of email content you can use to help differentiate your business from others. Many of our clients’ members wait anxiously for the email distributed right before Thanksgiving; these campaigns receive some of the highest open rates and best positive customer feedback. What are they sending? A recipe.

6. Be Meaningful

The holiday season is packed with emotion for many of your customers. Are you appealing to that emotion with your email campaigns? Express your thanks to your customers for their business and support during the past year. Share with your customers what you hope to accomplish in coming new year. Actively participate in local charities. Start your own annual food and toy drive. Most importantly, don’t ignore the significance that this season has to so many of your customers. Make your marketing efforts meaningful – and memorable. Give them a reason to share your business with everyone else they know.

This blog reprinted from www.drivingretention.com

, your one-stop customer loyalty resource.

The holiday season is here – a time for free shipping and 20% off everything!

At least that’s what a bulk of the major retailers out there tend to focus on this time of year. For many of us – regardless of the holiday(s) we each celebrate – the focus of this holiday season is on family and friends, on creating memories and sharing traditions, on expressing gratitude and love. It is a season of goodwill and giving.

As a business, are you focusing on the steep rise in sales you can expect over the next two months or on the emotional aspects that impact so many this time of year? What do you think your customers are focusing on? Are the two one in the same?

These are questions that we need to ask ourselves as marketers, particularly in the medium of email marketing. With the barrage of emails that your customers are already receiving, how can you differentiate your email campaigns from all the competition – both in your industry and out? The following suggestions should help you start thinking of ways to make your email marketing efforts be more meaningful – and more successful – this holiday season.

1. Beware of Overkill

Over the last week, I have received at least one email each day from a major toy retailer. I expect that average to increase significantly over the coming weeks. When I initially signed up on the retailer’s mailing list, I read each email. Now, however, I honestly can’t remember the last time I opened an email from this retailer; if they don’t automatically filter to my junk mail, these emails are sent to my trash before I open anything I actually want to open and read.

This is classic email fatigue. When consumers receive emails with irrelevant content or too many emails in quick succession, they develop email fatigue. During the holidays, many retailers think that sending emails more frequently is a good thing; it keeps customers aware of sales, contests and other events. But consider that every other business is also amping up the number of emails they send, and eventually consumers just stop reading them. Fewer, highly targeted emails are more likely to give you the successful results you’re looking for than emailing every update to your entire distribution list.

2. “When” Matters

Are you planning to send out an email campaign on Cyber Monday (the first Monday after American Thanksgiving)? Several reports have estimated that consumers spent well over $1 Billion online on Cyber Monday in 2010. With such augmented consumer spending, it comes as no surprise that email marketing efforts increase significantly that one day each year. So perhaps it is a day you should avoid. Consider sending out any Cyber Monday promotions in advance to avoid getting lost in the glut of emails your customer will receive the day of.

Also, if you’re planning on sending out a holiday greeting to your customers (if not, you should), avoid sending it out on the actual holiday. Most of your customers won’t check their email inboxes on major holidays, increasing the odds of your greeting being read days after the holiday, if it gets read at all.

3. Go for the Open

The subject line is one of the most important aspects of your email marketing campaigns – in fact, it is the one single factor that most often determines whether or not your email gets opened. When email inboxes are full of ads and offers from countless businesses, you need to ensure your email’s stand out. A good subject line is the best way to catch your customer’s eye. Use personalization and humor. Appeal to your customers’ emotions. Brainstorming as a team is one of the best ways to develop solid subject lines, so don’t be afraid to run them past your coworkers. Use small A/B test groups from your database to see what works best. And be sure to use catchy header text to ensure your customers want to keep reading the email once it’s been opened.

4. Get Social

Remember all those “overkill” emails you’re not sending anymore? All that content is still vital to your holiday marketing; it just takes on a different form. Research reports are indicating that in the last year, social networks have surpassed search engines as the most visited batch of websites. Instead of creating new emails for each new promotion or event update, get social. Not only are social media sites like Facebook and Twitter great ways to reach large groups of customers, those posts can be shared and re-tweeted, increasing your visibility in ways that emails can never do.

Social platforms are also great ways to encourage involvement from your customers. An auto dealership in Texas that we work with is sending out an email campaign encouraging its loyalty club members to post their favorite cookie recipe on the dealership’s Facebook page. The members will not only receive loyalty club points, but this dealership will assemble each recipe into a cookbook that members will be able to download after the submission period closes. This is just one great example of using social media to engage your customers – and it’s something this dealership’s customers will not soon forget.

5. Don’t Sell

If every other retailer is offering free shipping and 20% off coupons, then you need to go against the flow. Find ways to differentiate your business from all the others out there competing for your customers’ attention – and purchases. Offer more than simple discounts and savings. The more unique your emails are, the more they’ll distinguish your business and the more likely they are to be shared with others.

We encourage our clients each year to significantly downplay sales and promotions this time of year, and we’re not the only ones. Constant Contact managing editor Martin Lieberman says, “Everyone is selling at holiday time. The more you can NOT sell, the more it will help you stand out from your competition. Shopping tips, gift-giving advice and entertaining content” are perfect examples of email content you can use to help differentiate your business from others. Many of our clients’ members wait anxiously for the email distributed right before Thanksgiving; these campaigns receive some of the highest open rates and best positive customer feedback. What are they sending? A recipe.

6. Be Meaningful

The holiday season is packed with emotion for many of your customers. Are you appealing to that emotion with your email campaigns? Express your thanks to your customers for their business and support during the past year. Share with your customers what you hope to accomplish in coming new year. Actively participate in local charities. Start your own annual food and toy drive. Most importantly, don’t ignore the significance that this season has to so many of your customers. Make your marketing efforts meaningful – and memorable. Give them a reason to share your business with everyone else they know.

This blog reprinted from www.drivingretention.com

, your one-stop customer loyalty resource.

Would you rather have 1 million Facebook fans or 100 loyal customers? Until recently, businesses have generally focused on the number of fans they acquired, trying to get a high number of people to “like” their page. The number of Facebook fans your business has, however, is immaterial if you have no relationship with them as customers.

A recent post on All Facebook: The Unofficial Facebook Resource outlines 7 ways to build customer relationships on Facebook. We’ve expounded on each of these tips and suggest loyalty program and marketing managers evaluate what steps in this process would best help your business harness the potential in customers using social media.

1. Build a Single Database: Just like with customers who visit your business in person, in order to manage a relationship with your fans you need to start with a comprehensive database. Most social networks allow interfacing through their API using an open graph.
Learn More about Interfacing with Facebook

2. Prioritize Engagements: Fans can interact with a business profile in many different ways, from commenting on and sharing your content, to driving more traffic to your corporate website, to posting pictures of them using your products. Determine which interactions with your fans would be the most effective at building the desired relationship and encourage those interactions.

3. Identify Your Most Important Fans: You know who your best customers are: the frequent buyers, the big spenders, advocates who are great word-of-mouth marketers. It’s just as important to identify your best fans and target your content to reach them. These are individuals who regularly perform the interactions you’ve determined to be the most important and are the most influential with your other fans and their friends.

4. Give Value to Your Fans: Once you’ve identified your most active fans, give them something in return. It could be something as simple as recognizing them as a top fan and thanking them for their contributions. Some businesses have established loyalty plan – of sorts - just for their Facebook fans’ engagement and are rewarding points for interactions like inviting a friend, uploading photos and answering trivia questions correctly, depending on what interactions are seen as most important.

5. Tie In Your Other Loyalty Programs: Bring your fans’ “virtual” interactions into your “real-world” business by letting them convert their “virtual” Facebook points into “real” points and rewards. For example, 100 Facebook points could equal a $1 purchase in your rewards program.

6. Communicate the Value You Offer: As with any other customers, communicating well with your Facebook fans is imperative. When they respond to your content, respond back. Let them know what points you are offering for different interactions and be clear about any rules or restrictions. Keep them up to date on how many points they have accumulated and what that value would convert to in your rewards program. Being “in the know” doesn’t just help the customer or fan experience – it’s what social media is all about.

7. Measure Return on Investment: You need to track the successes and failures of any marketing campaign. The same is true with your Facebook page. Calculate ROI to verify that the interactions you’ve prioritized are creating profits. Is a highly active fan a loyal customer? Do you have fans that became customers just through experiencing your engagements on Facebook? Are customers discovering more products and services they can use by following you on Facebook?

“For the first time, in this type of world, we can see the connection between a loyal fan and a devoted customer, identify the connection between action on the social network and action at the cash register, allowing us to reward fans and followers with rewards for their participation in social activities” (allfacebook.com).

This blog condensed from http://www.drivingretention.com, your loyalty resource. 

As a fan of other businesses on Facebook, what types of engagements have you responded to? What interactions seem to elicit the most involvement from fans?

Would you rather have 1 million Facebook fans or 100 loyal customers? Until recently, businesses have generally focused on the number of fans they acquired, trying to get a high number of people to “like” their page. The number of Facebook fans your business has, however, is immaterial if you have no relationship with them as customers.

A recent post on All Facebook: The Unofficial Facebook Resource outlines 7 ways to build customer relationships on Facebook. We’ve expounded on each of these tips and suggest loyalty program and marketing managers evaluate what steps in this process would best help your business harness the potential in customers using social media.

1. Build a Single Database: Just like with customers who visit your business in person, in order to manage a relationship with your fans you need to start with a comprehensive database. Most social networks allow interfacing through their API using an open graph.
Learn More about Interfacing with Facebook

2. Prioritize Engagements: Fans can interact with a business profile in many different ways, from commenting on and sharing your content, to driving more traffic to your corporate website, to posting pictures of them using your products. Determine which interactions with your fans would be the most effective at building the desired relationship and encourage those interactions.

3. Identify Your Most Important Fans: You know who your best customers are: the frequent buyers, the big spenders, advocates who are great word-of-mouth marketers. It’s just as important to identify your best fans and target your content to reach them. These are individuals who regularly perform the interactions you’ve determined to be the most important and are the most influential with your other fans and their friends.

4. Give Value to Your Fans: Once you’ve identified your most active fans, give them something in return. It could be something as simple as recognizing them as a top fan and thanking them for their contributions. Some businesses have established loyalty plan – of sorts - just for their Facebook fans’ engagement and are rewarding points for interactions like inviting a friend, uploading photos and answering trivia questions correctly, depending on what interactions are seen as most important.

5. Tie In Your Other Loyalty Programs: Bring your fans’ “virtual” interactions into your “real-world” business by letting them convert their “virtual” Facebook points into “real” points and rewards. For example, 100 Facebook points could equal a $1 purchase in your rewards program.

6. Communicate the Value You Offer: As with any other customers, communicating well with your Facebook fans is imperative. When they respond to your content, respond back. Let them know what points you are offering for different interactions and be clear about any rules or restrictions. Keep them up to date on how many points they have accumulated and what that value would convert to in your rewards program. Being “in the know” doesn’t just help the customer or fan experience – it’s what social media is all about.

7. Measure Return on Investment: You need to track the successes and failures of any marketing campaign. The same is true with your Facebook page. Calculate ROI to verify that the interactions you’ve prioritized are creating profits. Is a highly active fan a loyal customer? Do you have fans that became customers just through experiencing your engagements on Facebook? Are customers discovering more products and services they can use by following you on Facebook?

“For the first time, in this type of world, we can see the connection between a loyal fan and a devoted customer, identify the connection between action on the social network and action at the cash register, allowing us to reward fans and followers with rewards for their participation in social activities” (allfacebook.com).

This blog condensed from http://www.drivingretention.com, your loyalty resource. 

As a fan of other businesses on Facebook, what types of engagements have you responded to? What interactions seem to elicit the most involvement from fans?

In September Groupon launched the first phase of Groupon Rewards, a new platform that tries to provide businesses with a way to build customer loyalty. Groupon Rewards’ release comes amid concerns from merchants that Groupon customers demonstrate no loyalty to the businesses offering deals.

What Groupon Rewards Does:

Groupon users who spend a merchant-determined fixed amount (at that same merchant) can earn a Groupon Reward, providing a deeper discount than a regular Groupon deal. For example, after spending $50 or $100 at a business over time, a customer might get a Groupon Reward to spend $4 and get $20 worth of food.

How Groupon Rewards Works:

Groupon Rewards are tracked using user credit cards. Once users have opted in to the program, they would need to consistently use the credit card which is already on file with Groupon in order to build their Groupon Reward. A spending goal, set by the merchant, can be met after multiple visits. Users will receive email or phone notifications after each visit alerting them that they just spent money at a merchant offering a Groupon Reward and indicating how much more they need to spend to unlock their Reward.

Pros & Cons for Businesses & Their Customers

While there is no cost for the Groupon Rewards program itself, TechCrunch indicates that “unlike a regular Groupon deal, the merchant will not keep half of the coupon amount. If the reward is a $4 coupon for $20 worth of goods, that entire $4 will go to Groupon.”

Businesses will now be able to track ROI – a feature that was previously unavailable through Groupon.

As the program is tied to the customer’s credit card, merchants and shoppers wouldn’t have to worry about a loyalty or membership card; however, in order for the program to work at all, customers must only use the credit card they have registered with Groupon.

How effective do you think this new program will be in generating repeat business? In generating loyalty? What is the difference?

How well do you think Groupon Rewards would work for businesses when compared to other loyalty rewards programs?

This blog condensed from www.drivingretention.com,  your customer loyalty resource.

In September Groupon launched the first phase of Groupon Rewards, a new platform that tries to provide businesses with a way to build customer loyalty. Groupon Rewards’ release comes amid concerns from merchants that Groupon customers demonstrate no loyalty to the businesses offering deals.

What Groupon Rewards Does:

Groupon users who spend a merchant-determined fixed amount (at that same merchant) can earn a Groupon Reward, providing a deeper discount than a regular Groupon deal. For example, after spending $50 or $100 at a business over time, a customer might get a Groupon Reward to spend $4 and get $20 worth of food.

How Groupon Rewards Works:

Groupon Rewards are tracked using user credit cards. Once users have opted in to the program, they would need to consistently use the credit card which is already on file with Groupon in order to build their Groupon Reward. A spending goal, set by the merchant, can be met after multiple visits. Users will receive email or phone notifications after each visit alerting them that they just spent money at a merchant offering a Groupon Reward and indicating how much more they need to spend to unlock their Reward.

Pros & Cons for Businesses & Their Customers

While there is no cost for the Groupon Rewards program itself, TechCrunch indicates that “unlike a regular Groupon deal, the merchant will not keep half of the coupon amount. If the reward is a $4 coupon for $20 worth of goods, that entire $4 will go to Groupon.”

Businesses will now be able to track ROI – a feature that was previously unavailable through Groupon.

As the program is tied to the customer’s credit card, merchants and shoppers wouldn’t have to worry about a loyalty or membership card; however, in order for the program to work at all, customers must only use the credit card they have registered with Groupon.

How effective do you think this new program will be in generating repeat business? In generating loyalty? What is the difference?

How well do you think Groupon Rewards would work for businesses when compared to other loyalty rewards programs?

This blog condensed from www.drivingretention.com,  your customer loyalty resource.