Customer loyalty is one of the most significant achievements for a business. It leads to repeat business, referrals, and word-of-mouth advertising. The best kind. 

Repeat business could be considered a form of loyalty. But repeat business can also be perpetuated by things like rewards and incentives. It can also be the result of convenience. 

The biggest difference between repeat customers and loyalty clearly comes down to meaningful and tangible benefits. “I frequent a local gas station because it’s right across the street … so I’m a repeat customer to that.”

Rewards programs have become mainstream in recent years with retailers. From Starbucks to Sears, retailers are finding ways to incentivize and reward customers for their repeat business.

But do rewards and incentives create true loyalty to brands? How can auto retailers incentivize and reward customers for their business? How can they create loyalty?

To explore this, DrivingSales Members Bill Playford, DJ Snyder, and Myself had an extensive conversation about what drives loyalty for retailers, and how these ideas play out for dealers in auto retail.

Get the Complete Conversation

For the complete conversation, visit the article Customer Loyalty vs. Repeat Business in Auto Retail on our blog, which features the full podcast version. You can also catch the video replay of the original live stream on our YouTube channel.

Margin compression is more than a buzzword. It's a reality. Profits in new cars are effectively gone for good. And they have been for some time. Profits with used cars are compressing, as well.

But beyond the phrase margin compression, what can dealers do about it? You can’t make up for the difference simply by selling more cars. Dealers must optimize their process, and fine tune their strategy.

In this video, I talk with three progressive dealers who are tackling margin compression through where and how they source used vehicles, their disposition strategy, and by focusing on faster turn.

The video stems from a more in depth conversation, the complete version which you can find on my blog and podcast. 

Let's talk about it...

What are some ways you are combatting margin compression at your dealership?

This is a preview of my recent conversation with DrivingSales Members Amanda Ryan, Terry Lancaster, and Camron Moore. During the conversation, we reflect on Nike's controversial ad campaign featuring Colin Kaepernick and how it applies to the Auto Retail business.

In the video, Amanda points out, 

"[We all have to] gamble with our brands these days due to the fact that we have to narrow in so much of what our actual brand message is. In doing so, we actually attract those customers or clients that share the same message and in doing so we have more loyal customers and less turnover.”

Terry states,

“Nike could have sat back,” Lancaster points out, “and kept running pictures of Michael Jordan for the next 40 years until he was 180 year old man you know but eventually they would lose their audience.”

Enjoy the video. If you'd like to catch the complete conversation you can view the original live streamed recording or the on our podcast on our blog titled, What we can learn from Nike's Colin Kaepernick Play, or in the episode titled, Risk, Reward, and Consequence with Your Brand in Advertising.

Last month we welcomed Jumpstart Automotive’s VP of Marketing and Strategic Insights - Libby Murad-Patel on our live weekly broadcast to discuss at length some of the surprising statistics and trends in this year’s Insights book.

This collection of annual analysis on consumer shopping patterns spans Jumpstart’s portfolio of automotive websites representing 20 million in-market shoppers.

This video provides a good preview of the show, and if you would like to listen to the complete conversation then check out the podcast. 

To help marketers better understand the fast-moving nature of the automotive industry, Jumpstart Automotive Media released its eighth annual Insights Book—a yearlong compilation of online automotive shopping trends and industry insights.

New additions included this year...

• The consumer path to purchase with a spotlight on cross-shopping trends
• In-depth shopper surveys to identify what’s driving purchase decisions
• Excerpts from Jumpstart’s 2017 luxury study
• Why SUVs and CUVs continue to dominate the market
• 2018 Industry trends and predictions

Listen to the complete conversation on the podcast: ON AIR - Review of 2017-2018 Shopper Insights

This is a preview of my conversation with DrivingSales Member Cliff Banks that aired live on May 9, 2018. To listen to the complete conversation visit the podcast. 

For the last 100 or so years, five fundamental aspects of the industry have stayed relatively the same: Product, Manufacturers Distributors/Dealers, Buying Experience, Ownership Experience.

However, all signs point to change, serious change, and disruption. But when, and how? Who will be the winners? Who will be the losers? 

Cliff Banks, from TheBanksReport.com and a well-respected industry veteran and insider, sits down with me for a discussion around the forthcoming Era of Uncertainty, how the franchise dealership model will be affected, and what the real meaning is of the idea of "disruption" in the automotive industry.

Enjoy!

*AutoConverse ON AIR is a live weekly broadcast that explores people, ideas, and technologies related to how we get around (mobility) and how we are connected (connectivity). Learn more. 

In October of 2017, entrepreneur and early Bitcoin investor Peter Saddington bought a Lamborghini with Bitcoin, paying the equivalent of $115 thanks to Bitcoin’s high exchange rate. The story captured the public’s imagination and has also piqued the interest of car dealers.

There are now a number of dealers happy to accept Bitcoin for a new car purchase, which you can locate on spendbitcoins.com. These dealerships can work with people locally and some offer nationwide service. Interested customers can search these dealers through the search offered on Spend Bitcoins.

There’s still some debate as to whether or not Bitcoin holders should spend their money, even if it means getting an amazing deal. It’s hard to say what the future will bring of Bitcoin, but some experts have predicted Bitcoin value to go even higher in the next 12 months. 

More importantly, how long before your dealerships expects to be accepting Bitcoins? Maybe it is already?

Last week's news of Authenticom being granted its request from the court for an injunction against CDK and Reynolds and Reynolds to continue accessing dealerships' R&R data management systems to provide the information that dealers and agencies need and have a right to was a BIG WIN for the auto industry. 

Information is power – it’s a truism we all know. But in the 21st Century, access to information is where the real power lies. This point has been illustrated with crystal clarity in the recent CDK / Reynolds & Reynolds lawsuit brought by Authenticom. The public fight between these companies is finally getting its day in court and the first round has made headlines throughout the industry.

CDK and Reynolds & Reynolds handle the vast majority of the data management software sales for the auto industry. CDK alone boasts more than 27,000 retail client locations and is the primary provider of data management systems (DMS) to most of the top US dealer groups.

Reynolds also represents a large portion of the market and bundles DMS solutions with consulting, training and management systems for the entire dealership. Both companies also offer data integration, the combining of separate data to present one, unified view. Simply put, the two companies represent the lion’s share of the data available in the auto marketplace.

When you’re dealing with that much information, you’re also talking about a lot of power.

CDK / Reynolds & Reynolds - The Story

The story begins back in the early 2000s. At that time, the data management system market was developing – and flourishing. Both CDK and Reynolds had come out publicly supporting the idea that data belonged to the dealers.

At the time, Reynolds emphatically stated “The data belongs to the dealers. We all agree on that.” CDK agreed and said they had "always understood that dealerships own their data and enjoy having choices on how best to share and utilize that data with others."

This inclusive and open environment allowed the data integration market to flourish. With more than a dozen providers offering data integration services, the competition kept prices competitive while fostering plenty of innovation in terms of user-friendly software.

But all that began to change in 2007, when Reynolds and Reynolds was acquired by Bob Brockman. At the time, Brockman was the owner of Universal Computer Systems (UCS), a company he founded in 1970. Over three decades he built the company up to become a heavy hitter in the world of automotive services. When he headed up the acquisition of Reynolds and Reynolds, people expected a change – and Brockman delivered.

Almost immediately, Reynolds began restricting who could access the data their system had. Other data integrators found themselves with their credentials yanked and a wall built between them and the data they needed to deliver results to their own clients. It was a complete about face from the position of Reynolds just a few years ago, and the dawn of a new age when it came to data integration.

In a somewhat niche field like the auto industry, the actions of Reynolds and Reynolds effectively cut off nearly half of the available data to other integration service providers. Over the next few years, this tug of war over access to information effectively killed off much of the competition.

But even as Reynolds was limiting the flow of data, they were placing a higher premium on the data they alone could provide. Fees to access their data climbed to almost staggering numbers, with some dealerships coughing up $150,000 or more every year simply to access and manage their data.

Meanwhile, their stranglehold was about to become even stronger. While the number of players was dwindling in the field, Reynolds clearly wanted to narrow things even further. According to the story laid out in Authenticom’s Complaint, in February of 2015 Reynolds and Reynolds reached out to CDK to strike a deal.

The two teamed up to freeze out everyone else. They would attack, undermine and thwart the efforts of everyone else in the market, ultimately leaving the two companies to reap the full rewards of a niche – but lucrative – market. Not only would this plan leave the entire market theirs for the taking, it would allow them to set any price they wanted. They would control ALL of the information – meaning they could charge whatever they wanted for it and dealerships would have to fall in line.

Since then, the companies have controlled the data integration system world with an iron fist. It became the Nasty Little Secret everyone knew about. As companies fell by the wayside, turning their focus to another area of service or simply going under, the pressure was turned up on the competitors that remained.

A Problem (Not Just) for Authenticom

One such competitor was Authenticom, headed up by President and CEO Steve Cottrell, who was another well-known player in the automotive data industry. With more than three decades of experience in the industry, he had spent 15 years building Authenticom into an impressive and well-respected company.

During that time he managed to grow their revenue from $3.7 million to $20 million in under 5 years. In 2015, the company was saluted by President Obama as "one of America’s own fastest-growing private companies”, so his efforts were clearly paying off.

Until, he says, CDK and Reynolds decided there wasn’t enough room for all of them. Authenticom, like other rivals, felt the pinch of CDK and Reynolds’ attempts to prevent data integration companies from accessing their data.

Read the full story on DealerRefresh.