The Benefits of a Loyalty Reward Program and Four Tips for Implementing it at Your Dealership

loyalty reward

When it comes to loyalty reward programs, turning your target audience into repeat customers should be the ultimate goal. Why? Well, repeat customers are buying almost 30 percent more items per order than first-time shoppers. Also, they generated three to seven times more revenue per visit. Ultimately, loyalty reward programs can provide incentives for casual customers to become long-term loyal customers. However, what are the additional benefits of loyalty reward programs, and how can you implement them at your dealership? Read on for our crucial tips to help you retain more of your audience through loyal reward programs.  

What are Loyalty Reward Programs?

This question may seem unnecessary, but understanding the original meaning and purpose of this marketing strategy is crucial to creating a program that works at your dealership. According to, a loyalty reward program is:

“A system of structured rewards given to customers, usually in exchange for desired behaviors, with the goals of increasing customer loyalty and collecting customer data. Loyalty programs use the psychological principles of reciprocity, commitment, and loss aversion to increase the likelihood of customer loyalty.”

In short, your goal is to create a program that encourages customers to keep coming back through a rewards-based system.

The Benefits of Loyalty Programs for your Dealership

What makes these programs worth it? Here are the benefits of offering these programs for your dealership:

Improves Customer Retention

As stated above, loyalty reward programs make it highly likely for your casual customers to return to purchase additional products or services. Returning customers are excellent for your business as increasing customer retention by only five percent can improve profits by 25 to 95 percent.

Increases Communication and Engagement

Loyalty programs give you a reason to interact with your target audience consistently. From sending out incentives by email to interacting with them in person, these perks make it easy for you to stay in the minds of your customers.

Get Sharper at Multi-Channel Marketing

If you are using social media, newsletters, and in-store marketing techniques to encourage your customers to enroll in loyalty reward programs, then you are gaining greater insight into the strategies that are helping your customers become more engaged with your brand. You will begin to detect trends that are causing them to participate, which can help you sharpen your omnichannel messaging for other audiences.

How to Implement a Loyalty Rewards Program at Your Dealership

There are a variety of ways to develop a loyalty rewards program at your dealership. Here are a few ways to implement this tactic for your customers:

Have Points that Lead to a Discounted or Free Maintenance Appointment

You can incentivize your customers to frequent your service department for maintenance and repairs by offering points for each time they visit. Set up a tiered system that attaches points to each repair or maintenance product. Then create a set number of points or visits that can lead to either a discounted or free maintenance appointment.

Offer Rewards Attached to Birthdays and Holidays 

Many times, businesses will have special incentives and discounts associated with holidays or birthdays. You can use your loyalty reward program to capitalize on this. Instead of offering it to all customers, have this be a perk that is specifically offered to your loyalty reward program members. You can provide perks like a half-off oil change, or even discounts toward a new vehicle purchase in the future.

Allow them to be the First to Know About New Acquisitions

Is your dealership acquiring a new popular vehicle with the latest car technology? Then let your loyalty reward program members be the first to know. Give them a heads-up of what you have—or will have— in the showroom. Giving them this information first makes them feel as if they are part of an elite group of customers who are being appreciated for their long-term commitment to your dealership.

Provide Perks from Third-Parties

Many businesses partner with other local companies to offer perks and rewards. For example, if a customer has purchased two cars from you within a specified period, you could provide a free dinner to a local restaurant, or offer movie tickets to customers who have visited your service department for a specific number of repair or maintenance appointments.

There are a variety of ways to show your customers you appreciate their business. Make sure it fits in line with your business goals, and that it is also worth the time of your customers.

Final Thoughts

Loyalty reward programs don’t have to be complicated or made up of a variety of offerings to be successful. The simpler they are, the more likely your customers are to join them. Be clear about what the perks are, how customers can get them, and how points are distributed. If customers understand the structure and see how it is benefitting their wallets, then the chances are high for them to become loyal reward program members as well as lifelong customers.