How to use loyalty programs effectively at your car dealership

Less than 30% of owners are loyal to a dealership.

In selling products, dealerships have an incredible opportunity to acquire new customers and retain existing ones. But, according to Polk, the sad truth is that less than 30% of owners are loyal to a dealership. For a dealership, an average defection rate of 70% should be a great motivator to improve loyalty. And in such a competitive market, dealerships often need to use ad campaigns, loyalty programs, promotions, and various other marketing techniques to generate more revenue.

Chip production may be down, but it will come back, and those cars will need marketing dollars behind them. And, even if dealers don’t have many vehicles, the fixed ops department always wants more parts and services sales growth.

How can I create loyalty?

If you type “automotive loyalty programs” into a search engine, you’ll see many loyalty programs that dealerships can use to create an experience that customers remember. These automotive loyalty programs work to retain customers, increase sales, and bring in new customers. With all the different loyalty program options available, dealerships should ideally focus on creating an automotive customer experience that is unique for the dealership and memorable for customers.

More: Why car dealers need to focus on increasing customer loyalty today

However, some dealerships can’t afford to create their own sales or service loyalty programs, but this isn’t always necessary. Instead, there are many dealership loyalty programs available through automotive software providers. While these programs will have their different strengths, there are some standard features.

Loyalty content

Most loyalty programs will have service benefits, special offers, or branded merchandise. These products or services should be exclusive to the loyalty program, available at a discounted rate, or specific to the automotive dealer’s target market. In addition, an effective automotive loyalty program will have frequent communication with its members, encouraging them to return and use the dealership services.

family2With so many programs available, dealerships should look carefully at what each loyalty program offers and consider customer demographics when choosing an automotive loyalty program. Factors such as the dealership model mix, geography, customer age range, and income level can significantly affect your choice of the most effective program for you.

Make the loyalty program easy

A loyalty program should also be easy to use and reduce the time it takes for automotive dealership customers to receive automotive-branded products they can use or prizes that they can redeem. Lastly, dealerships should only invest in automotive loyalty programs to give them a target ROI. Purchasing a loyalty program without any research will waste customers’ time and dealership money on programs that don’t help the dealership realize its goals.

Consider bringing on partnerships

Some automotive dealerships use loyalty programs that work with exclusive tire manufacturers, finance and insurance companies, and automotive rental services. In these programs, customers can earn points when purchasing third-party accessories or tires, adding a vehicle to an existing automotive service, or purchasing additional protection from a dealership insurance partner.

Satisfied customer, satisfied dealership

Automotive dealerships need to invest in customer experiences that create loyal customers. Creating an effective loyalty program will improve customer satisfaction and retention rates, increase referrals, bring more accessories sales and service revenue, reduce marketing costs, and increase automotive sales.

With knowledge of your customer base, research, and the right program, a dealership can build its brand, increase revenue, and create satisfied customers.

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Steve Mitchell
Steve Mitchell
Steve Mitchell is a contributing writer and reporter for CBT News. He earned bachelor's degrees in Marketing and Television from the University of Texas in Austin and a Masters of Theology study from Dallas Theological Seminary in Dallas. His passion for automobiles lead him to become a creative director for automotive marketing ad agency. Most recently, he was the manager of interactive marketing for Mitsubishi Motors, NA.

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