From drugstores to local restaurants, businesses are embracing rewards programs. In fact, QueueIt explains that the vast majority of businesses offer these programs. Car dealerships should consider jumping on this trend, if they haven’t done so already. Loyalty or rewards programs not only enhance customer satisfaction, but they also can boost business. Here’s why dealerships need a rewards program and how these programs can benefit the dealership:
- Increase customer communication outreach
- Boost customer satisfaction
- Motivate customers to utilize dealership service centers
- Increase dealership foot traffic
- Drive other revenue streams
- Keep up with the competition
What Is a Rewards Program?
Businesses can create their own unique rewards program, and some businesses may refer to these programs as loyalty programs or even insider’s clubs. Typically, the programs allow customers to earn points for every purchase. These points or visits are tracked via a customer’s telephone number or their email.
Programs can allow customers to receive a credit towards a future purchase; for example, 100 points could denote a $10 reward that’s deducted from a purchase price. Other clubs or programs offer a free service after a specific number of visits or services.
Dealerships could allow customers to accumulate points that correlate to dollar amounts towards purchases/services, or they might follow the rewards platform that provides a free service after the customer accumulates a specific number of visits or purchase points.
In addition, some of these programs offer a card that helps track these points/services. Customers might need to present a card that is punched at each visit. How a business tracks points/visits for their program could correlate to the budget they have for the program; some create electronic access for members, while other businesses will use just a punch card.
Programs Can Increase and Enhance Customer Communication
Loyalty or rewards programs that are linked to an email or cell phone number could also facilitate customer communication. For example, a customer might receive an email or text message updating them on their point totals.
The program also could be tied to its own mailing list. Businesses might send out communications that alert customers that certain visits might be worth more points or customers in the program might receive updates about unique opportunities or discounts for members.
These programs can help enhance communication between the business and the customer. Emails or updates might encourage customers to schedule a visit or take advantage of a deal that is offered to members.
Rewards Can Boost Customer Satisfaction
Participating in a rewards program could help boost customer satisfaction and loyalty to the business. Everyone likes to get something for free; earning rewards that provide discounts on a service or a free service can make customers feel valued.
TechTarget explains that these programs also could give a bump to reviews. The site explains that these programs can make customers so happy “…that they feel compelled to share their experiences on social media, which can bring in new business and loyalty members.”
These programs offer a positive experience for customers in the form of discounts, free services or other rewards. In return, the dealership might benefit from better reviews, referrals and more business.
Motivate Customers to Utilize Dealership Service Centers
While car sales might be a dominant revenue stream for dealerships, many car dealerships also offer service centers where customers can drop off their vehicles. Some customers buy their vehicle from the dealership but never utilize the service center for repairs or routine maintenance.
Loyalty/rewards programs can be used to heighten the customer’s awareness of the service center and motivate customers to utilize it for their vehicle. Programs might be tied to points earned from routine maintenance visits like oil changes, tire rotations, etc.
If customers know that they receive a free oil change after 10 oil changes, they might be motivated to schedule this service at the dealership. Not only can programs boost business at service centers, but they also could allow dealerships to better communicate and track vehicle health for their loyal customers.
Increase Dealership Foot Traffic
Programs tied to vehicle services or maintenance also could help boost foot traffic in the dealership. Customers might walk around the dealership while waiting for their vehicle to be serviced. Maybe they spot a new model that catches their eye.
As loyalty and service visits increase for customers, they might spend more time at the dealership. Their visits might allow them to notice vehicles that they like; when it’s time for them to buy a new vehicle, the dealership could be their first stop.
TechTarget explains that loyalty programs also could help create a sense of community. This could be true for car dealerships, too. Customers might bring their car in for regular visits and become acquainted with the maintenance team and others at the dealership. More time at the dealership allows customers to get a sense of the culture and the team.
Drive other Revenue Streams
Is the service center meeting the monthly goals for revenue? Loyalty programs can help boost interest in other services and offerings from the dealership. For example, points could be earned when customers buy new tires, have a routine service appointment, etc.
Dealerships can utilize their loyalty or rewards program to help draw awareness to other offerings. Some customers don’t realize what the dealerships offer after they buy their car. Use the program to help customers understand that the dealership can be a one-stop shop for servicing and repairing their vehicle.
Keep Up with the Competition
If other dealerships offer a loyalty or rewards program for their customers, this perk might be an expectation. Customers might flock to other dealerships for their car purchase and service needs because the dealership makes them feel valued.
Loyalty and rewards programs can help dealerships keep up with their competition and stand apart from competitors, too. Structure the program differently than other dealerships or create a program that offers different tiers of benefits; for example, some programs are designed like ‘VIP clubs,’ and these clubs might include a membership price. At a certain level, customers might gain access to special events, discounts or more.
Central Chevy in Springfield, Mass. offers a VIP Service Club for $49.95. Members receive $5 off oil change/tire rotations, free towing to the car dealership, free brake inspection and more.
VIP clubs can offer value for members and encourage them to only utilize the dealership for their car maintenance needs. Dealerships could offer a firm price for members (like Central Chevy), or they might design their club with multiple levels, rewards and prices. VIP Clubs provide yet another revenue stream for the dealership.
How to Promote Loyalty/Rewards Programs and VIP Clubs
How can dealerships promote a program when they are prepared to launch this type of offer for customers? Promoting a loyalty/rewards program is easy. Dealerships can create a pamphlet or offer a handout that explains how the program works and how customers can join (maybe it’s via email, cell phone, etc.).
For VIP Clubs, dealerships could offer membership to all customers who purchase their car at the dealership. Perhaps the first year of membership is free. Some businesses tell customers about VIP programs when the customer is paying for a service or purchase.
If VIP Clubs offer different membership tiers, dealerships should create a handout or pamphlet to help customers to better understand their options. Offering a yearly membership fee could be the easiest option for both the dealership and customer, although some VIP clubs could require a monthly membership.
Loyalty/rewards programs and VIP clubs also should be promoted via the dealership’s website and via social media accounts. Include pricing and other details (for clubs). Dealerships also should make it easy for customers to sign up.
Other Loyalty Perks and Offerings
Not every customer will join a loyalty/rewards program or a VIP club. Some customers simply aren’t interested in these programs. To reach out to all customers, dealerships also could host a customer appreciation event that includes special deals, promotions and perhaps kid-friendly activities, too.
Send out invites via email or in the mail (if the budget allows). Hosting these events is a great opportunity to encourage customers to view and explore new inventory; in addition, the dealership also could offer deals or promotions on certain services. Some dealerships also include drawings for door prizes.
Loyalty is Crucial to Customer Retention
For dealerships that notice a lull in returning customers, it might be time to assess overall satisfaction. Customers who don’t return to the dealership for a new car or for vehicle service appointments could be dissatisfied with the culture, the service or maybe they simply don’t feel appreciated.
While a poor dealership culture could repel repeat visitors, dealerships also might need to evaluate the overall customer experience. A rewards or loyalty program could help customers feel valued and appreciated; in addition, offering a VIP Club can give customers a sense of value and increase their loyalty to their dealership.
However, dealerships that have a poor culture might need to step back and understand that falling customer loyalty could be tied to the overall attitude of the staff and how they treat their customers. If the culture is poor, even the best loyalty programs might not be effective.