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?

Whether your dealership has, or is considering a loyalty program, it’s important to make sure your marketing messages align with the overall brand or image of your store. What is your dealership known for? Aggressive, “best” pricing? Friendly, no-pressure salespeople? A multi-generation, family owned pillar of the community?

A brand is your identity’s business, and conjures up powerful images for customers, both consciously and subconsciously.  Whether you realize it or not, your brand creates a visual, emotional and cultural connection between you and your customers. Think about brands you know: Disney has a strong brand as the family entertainment leader. Apple commands higher prices than its competition because it has a loyal following that appreciates its innovative, counter-culture image. The Volvo brand is identified with vehicle safety. When a customer walks into your store, what kind of experience do they expect? Do they get that experience every time? Is that experience remembered when they receive their next communications?

All great brands share one thing in common: all of their marketing communications reflects their brand. This includes loyalty marketing. If your dealership is known for aggressive pricing and blow-out sales, and your latest loyalty program e-mail fails to mention pricing anywhere, or instead displays a cozy image of a family around the dinner table, that message will not resonate with your customers. They may not understand why, but it simply won’t ring true. Or, if your dealership is known for its no-pressure sales process but you are sending out e-mails with aggressive sales messages, chances are you are eroding your customers’ trust.

When customers buy a brand, they buy its values and promises, and feel that their expectations are aligned with the company. The goals of your marketing messages are to meet those expectations and continue to reinforce that alignment with your brand. Loyalty communications provides an opportunity to connect with your customers on a regular basis. Like customer loyalty, building brand awareness is an ongoing process—but an important one to ensure long-term success.

Do your marketing messages reflect your brand? In what way? What are your customers’ expectations when they visit your dealership? Does your marketing attempt to meet those expectations? Has one of your favorite “brands” ever disappointed you and if so, did they ever win your business back? 

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. 

How many cards do you have in your wallet? The average U.S. household now belongs to more than 18 loyalty programs, for a total of more than 2 billion memberships. That’s an awful lot of loyal customers, but as it turns out, all these programs and cards are having an unintended effect: customer loyalty fatigue.

According to a recent survey by LoyaltyOne, customers are becoming increasingly “fatigued” by customer loyalty programs. So does that mean you shouldn’t have a loyalty program? On the contrary; despite some of the annoyances, most people still participate in their ‘favorite’ loyalty programs, and for many businesses, it’s a proven marketing tool that adds revenue to the bottom line.

So why are customers being turned off? Some of the most common reasons are “I always forget to to bring my card,” “the coupon I got in the mail has expired,” “restrictions on merchandise,” “not getting good discounts,” etc. For the most part, it seems that customers just aren’t perceiving much value in their customer loyalty programs.

To combat this customer loyalty fatigue, make it a priority to create a loyalty program  that stands out from the rest, and is perceived as valuable by your customers. Here are a few tips on how to accomplish this:

1) Consider a loyalty program where cards aren’t mandatory. All the customer has to do is give his or her name, or phone number, and all the membership information and transactions can be pulled up and done on screen.

2) Give members something fun to work towards. Having a tiered loyalty program allows you to send updates like “only 100 points away from becoming a silver/gold/platinum member!” In general, people like to feel they’ve achieved VIP status or increased recognition. But if you have a tiered program, make sure the customer feels like they’re getting something for achieving the new level! How does gold feel different than silver? If you or your customers can’t explain that, then re-think the tiers. Remember, sometimes you have to give more to get more!

3) Offer choices. One thing that many customers don’t like is being restricted in terms of what they can use their rewards points for. Be sure to keep your plan flexible and place the customer firmly in control of what they can use their points for. Whether it’s towards a new car, a discount on a maintenance service, dinner for two at a good local restaurant, or even cold, hard cash, people define “value” differently and will appreciate different types of rewards.

4. Don’t spam your loyalty program members. These are your best customers who have entrusted you with their e-mail addresses. The last thing you want to do is break that trust by spamming them with e-mails every day, or even every week. Be sure that you are only sending them selective, relevant e-mails. It may take a little more work to divide members into groups with specific preferences, but trust me, it will pay off.

Are your customers suffering from customer loyalty fatigue? Creating a customized, flexible program that offers customers real benefits is the key to ensuring that your program is perceived as valuable.

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.

What do you think would excite your customer more? A 15% discount on a tire rotation or being notified that they have been elevated to VIP status in your loyalty rewards program? You may be surprised that just as many customers respond positively to intangible rewards, such as an elevation in status, or feeling like they contributed to a good cause, as they do to monetary rewards. Think of that movie “Up In the Air” where George Clooney’s character was laser-focused on making the “10 million mile” club. And what did he get for it? A cool new card, a glass of champagne and a 1-800 number with an operator that greeted him by name. Some younger people are really into their social media status: think of people who visit restaurants so they can earn another badge on Foursquare, or shell out their own dollars to buy seeds to elevate their Farmville status.

Yet many marketers still focus on providing rewards only in the form of tangible points and dollars. This is key to every program, of course, but it wouldn’t hurt to include intangible rewards too. One example of this is the outdoor retailer, REI. The company uses social responsibility as a type of reward for its loyalty members, who become co-op program members. At the end of every year, REI pays them a dividend and outlines how program participants have contributed to the greater good just by being a member.

What do your customers care about? If you are involved in community activities that you’re proud of, maybe there’s a way to incorporate customer involvement through your loyalty program. In addition to discounts, you could do a promotion such as “for every dollar loyalty members spend, we’ll donate X amount to (your favorite cause).” Combining intangible rewards with tangible rewards is a great way to boost awareness of your loyalty program, and may encourage those customers that don’t respond to discounts or dollars in the same way they do to increased status or a good cause.

What other types of “intangible” rewards do you think customers respond to? What suggestions do you have for incorpor

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

It’s one of those unfortunate, inevitable facts of life: every company and every employee will at some point have to deal with an angry customer. Whether their anger is warranted because of a bad situation, or whether the customer is just plain difficult, doesn’t matter. These days, companies must respond to and deal with angry customers. If they don’t, they risk those customers becoming brand detractors, using social media to spread the word, starting boycotts or writing negative reviews.

Every employee should be trained how to deal with angry customers. Employees need to know that even if they are being insulted to their faces, they still need to make a genuine effort to regain that customer’s goodwill. Here are some steps that may help turn an angry customer into a loyal one (or at least, not a detractor):

1. Acknowledge the Anger.

Anger trumps logic. Sometimes, presenting a customer with the facts isn’t enough. Anger is a powerful emotion that stems from the fact the customer felt something very negative. It’s up to you to find out what the root cause of their anger is, and it may have little to do with the alleged incident or accusation. Is the customer really angry because they were overcharged, or did they feel like their complaint was ignored? Or were they shuffled around to three different people—or have to deal with a complicated voice mail system in order to register their complaint? The initial “issue” often isn’t the real issue, it’s how the company responds to the initial issue that can escalate a customer’s emotions into anger. Don’t try to rationalize what happened; instead, just acknowledge that they have a right to be angry.

2) Diffuse the Anger.

The next step in dealing with an angry customer is to diffuse their anger. This is easier said than done. Sometimes, people need time to vent. That’s fine. Be patient while they do so. The key to making this happen is to listen to emotion without getting emotional. Don’t start flinging angry comments back. Be patient, speak softly and in a steady tone, and state back to the customer what you believe their problems and concerns are. 

3) Own the problem.

It doesn’t matter if you created the problem or not. An angry customer doesn’t want to hear it wasn’t your fault or that you’re just the messenger and there’s nothing you can do about it. Employees should be trained that an angry customer is a top priority and should be taken care of. Even if they truly don’t have the power to fix the issue, they should take charge by taking the issue to the managers that do have the power. However, that’s no excuse for handing the customer and their problem over and forgetting about it. Owning the problem means making sure the issue is being taken care of, no matter who else is handling it.

4) Resolve the Issue.

Once the issue is resolved, inform the customer that this specific problem is resolved and is not expected to reoccur. Demonstrate your confidence by reiterating the customer’s original concerns and actions that you took to correct the issue. If more than one customer gets angry about an issue, there may be some long-term changes within your organization that need to take place. If you identify a problem with another employee, or with some policies in the workplace, then take your concerns to your manager with the complaints and some suggestions for necessary changes.

5) Follow Up

After a few days and then again after a few weeks, follow up with the customer to inquire whether the corrective action was effective. A phone call or personalized e-mail demonstrates compassion and attentiveness, and sends a powerful message that your company cares about their individual customers. This type of follow-up may be enough to turn a now-neutral customer into a loyal customer, and may even earn you a few new customers!

Do you have any additional tips for handling angry customers? What steps do you think are the most challenging or difficult for employees to learn? Can you share examples of how you have turned an angry customer into a loyal customer?

Just about every business receives a complaint at some point or another. Whether it’s by phone, e-mail or via social media, when a customer is unhappy or feels they have been taken advantage of, they want to be heard. Most customer service people are trained how to deal with unhappy customers. But does the buck stop there? What happens with the complaints once they are resolved?

While occasional complaints are to be expected, if the same complaint is repeated on a consistent basis, it’s time to look at what’s going on internally. Often, one or several employees are responsible for the same complaints. Or, it could be an internal process that isn’t working or a scheduling problem, i.e. not enough employees to effectively deal with the volume of customers.

Fortunately, identifying the source of customer complaints is not difficult. All it requires is tapping into the customer service agent or whoever else is responsible for addressing customer complaints.

Who is responsible for dealing with customer complaints? Is it a customer service agent or agents, or is it individual department managers? Hold a brief weekly meeting to gather information on complaints. How many and what were the issues? Was the same issue complained about more than once? Was a specific employee named?

If an employee is responsible for the complaints, don’t immediately criticize that person. They may be genuinely unaware how their behavior is affecting customers. Instead, be gentle but informative, and give specific advice on how that person’s behavior should be.

If you are receiving complaints about your product or service, first you have to put aside any defensive feelings you may have on the subject. Just because you feel like your product is the best, or your service is the best you can offer, doesn’t mean that all your customers will agree. If the complaint is repeated, change may be necessary; either in the way you’re providing the service, or in the internal process itself. If the problems are with a product, there’s less you can do. This may just be personal preference on the consumers’ part. But addressing their concerns and checking into them to see if there is really a problem with the product will go a long way towards creating goodwill with that customer.

Resolving customer complaints is a necessary first step towards building customer loyalty; but resolution alone will not ensure that the customer will come back. Using information from complaints to implement genuine change within your organization will both reduce customer complaints and increase the likelihood that your customers will return to purchase, again and again.

What system do you have in place to handle customer complaints? What do you do once they’re resolved? Have you ever changed an internal process because of repeated complaints? If so, how did it turn out? 

For dealers, two primary goals of implementing a loyalty program are: (1) to have the customer return to the service department for repairs, in order to increase customer pay RO, and (2) to have the customer purchase their next vehicle from your dealership. Therefore, it’s important to ensure that both sales and service are working together to build loyal customers.

The relationship between these two departments is critical, according to the recently released J.D. Power 2012 Canadian Customer Commitment Index Study, as summarized in this Loyalty 360 article.  The study measures the service behaviors, satisfaction and loyalty of owners of vehicles that are four to 12 years old. Overall customer satisfaction is determined by examining five key factors of the service experience: service initiation; service advisor; service facility; service quality; and vehicle pick-up. The study also examines customer satisfaction with both new-vehicle dealerships and aftermarket facilities.

The results were that 42% of customers who rate their dealer service experience 10 (on a 10-point scale) indicate they “definitely will” purchase the same make the next time they shop for a new vehicle. In contrast, only 7% of customers who rate their service experience between one and five say they definitely will purchase the same make. Clearly, providing a good service experience is one of the keys to building loyal customers who will purchase their next vehicle from your dealership.

Additionally, the study found that one of the biggest factors in making sure customers are happy with service, and therefore more likely to return for future purchases, is communications.

Customers prefer to be communicated with via the same method they use to schedule service appointments. Among customers who schedule a service appointment via telephone, 54% prefer to be contacted in the future by telephone, compared with e-mail (32%) and traditional mail (10%). Similarly, among customers scheduling service appointments via the Internet, 66% prefer to be contacted by email, compared with phone (22%), traditional mail (3%) or text message (8%).

What processes do your dealership have in place to ensure that both sales and service are “on the same page” in terms of how they reach out and communicate to customers? How often do your sales and service people work together as a team, solving problems and referring customers to each other?