As car purchases are high value and low frequency, automotive customer loyalty programs are designed to foster brand loyalty. Loyal customers are an invaluable supply of high ROI sales, typically less likely to negotiate pricing and generate service and other fixed-ops revenues. Moreover, selling to loyal customers is more cost-effective than attracting new ones through costly conquest marketing strategies.

    Increased Repeat Business

    Dealerships that want to stand out in the automotive retail marketplace should consider leveraging automotive dealership loyalty programs to maximize their fixed ops profits. Often, dealers offer customers free maintenance after purchasing their vehicle to encourage them to return for service and establish familiarity. These loyalty perks help dealerships differentiate themselves from the competition and provide a reason for customers to keep returning, even if the price is not the best. Advocates of dealership loyalty programs claim they can lead to higher customer retention, more outstanding service sales, and a better ROI than other marketing strategies like advertising. However, skeptics point out that some third-party automaker-branded programs can cost more than they generate in benefits, and many dealerships may need help to support the additional expense of an in-house program. Whether the dealer has an in-house or third-party loyalty program, introducing it to existing customers can be done via various tactics, including in-store signage and social media posts that invite drivers to sign up. By including family members in the program, dealerships can also increase their reach and expand the impact of their loyalty rewards.

    Increased Customer Satisfaction

    As the car business becomes increasingly competitive, dealers seek ways to differentiate themselves. Many focus on customer service, but the dealership culture must be refocused to place equal value on building customer loyalty. Currently, the day-to-day focus in most dealerships is on hitting sales goals. This often conflicts with the need to improve customer retention. For instance, some actions that are good for customer satisfaction (such as absorbing repair costs in an OEM warranty dispute or providing a free loaner) may cost dealerships in the short term. However, if those same dealers were to make these decisions to build customer loyalty consistently, they would generate repeat and referral business. An effective automotive customer loyalty program allows dealerships to provide customers with a better experience, rewards, and benefits that aren’t available at other dealers. This program’s personalization is critical, as it creates an emotional connection with customers and helps them feel valued by the dealership.

    Increased Customer Referrals

    Auto dealers work tirelessly to convert prospects into car-buying customers, yet many dealerships need to focus on building relationships with their loyal customer base. When dealerships focus on loyalty, they increase retention and generate repeat business. This results in a healthy bottom line — and it doesn’t take long for this increased revenue to offset the costs of loyalty programs. Studies have shown that it can cost between 5 and 25x more to acquire a new customer than to retain a current one, so focusing on loyalty is the best way for auto dealers to increase their ROI. Moreover, a loyalty program can offer numerous benefits that increase a dealership’s brand awareness. Customers will more likely refer their friends and family to the dealership. Personalized messages are another way a loyalty program can increase a dealership’s customer referrals. When dealerships send a congratulatory email or offer free maintenance for their repeat buyers, it shows they appreciate their business and want to reward them. This creates a positive impression of the dealership and encourages customers to continue shopping at that location. In addition, a loyalty program can offer exclusive perks unavailable to the general public. These perks can include priority service appointments, free maintenance packages, and exclusive events. Offering these perks to repeat customers will show that you value their business and encourage them to purchase their vehicles from your dealership.

    Increased Sales

    As cars are a high-cost purchase out of reach for most consumers, retaining customers already in the market is vital to long-term dealership growth. With a loyalty program, your dealership can offer perks and discounts that help drive customer satisfaction while increasing sales. This can be done by offering personalized experiences, remembering customers’ preferences, and providing exclusive perks or discounts that help build a relationship with your brand. In addition, automotive loyalty programs can encourage customers to return for service and buy a new car. Dealerships can measure their retention goals and performance and report them to their manufacturers, much like sales reports. A loyal customer base supports your immediate sales and service goals, but more importantly, they are also the foundation of your future revenue. A study found that a dealership that loses one customer for every hundred it sells will break even after six months. This means that focusing on retaining your loyal customers is critical to your long-term success, and that’s why loyalty programs are becoming a must-have for dealerships.


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