Yes, Loyalty Programs Are Worth the Effort!
Dealers often question the need for a points-based customer loyalty program for their business. The real question isn’t whether or not they need one, our research says they do, but how to move beyond a traditional loyalty program structure to something designed with the needs of the customer and the dealer in mind. DMEautomotive’s white paper, “Marketing Success in a Changing Loyalty Landscape,” which is based on a survey of over
4,000 consumers, asked customers whether a loyalty program is important to them, whether they would join a program and what features would be most important to them. The study validates loyalty programs as a highly viable strategy with substantial consumer interest and a high potential for turning disloyal customers into dealer loyalists.
In the survey dealer loyalists identified a loyalty program as among the top 10 most important service provider attributes, with 34 percent saying they would be likely to participate. Your loyalists care about loyalty programs and you risk losing your most valuable customers if your competitors offer a loyalty program and you don’t. For years dealers have struggled implementing easy, effective customer loyalty programs, often because they were overly complex and costly. The good news is that you no longer need to change your operational processes to deliver the most desired features of a loyalty program to your customers, including discounts on parts and services, special savings events, and the ability to earn rewards points. All of this can be done through direct marketing communications.
The most important thing to remember when implementing a loyalty program is that it needs to be easy for you and easy for your customers. The problem with many loyalty programs on the market today, is that they require the infamous “loyalty card.” With a loyalty card there is the issue of scanning and keeping track of the card, which can frustrate both dealership personnel and customers. There’s a better way. New card-less loyalty programs automate the entire process. Points are awarded based on sales and/or service purchases, and point certificates are automatically sent to customers via mail and email.
But are customers really okay with not having a card? Of 12 common loyalty program features evaluated by DMEa, a physical membership card ranks last in importance for customers. Only five percent of customers said it was important to them.
Also, with the recent emergence and growth of mobile apps for dealerships, consumers can now easily manage their loyalty points at their fingertips via their smartphone. According to Pew Research Center, 46 percent of all adults now own a smartphone. And people are spending more time on their phones than ever before. According to a recent study by Flurry Analytics, consumers now spend more time on mobile apps than on the web! Mobile apps are the ultimate platform for making future loyalty programs super customer friendly.
When it comes to loyalty programs remember:
- Loyalty programs are an important tool for retaining you most valuable customers.
- Make sure the program simple for your dealership to implement.
- Make sure the program simple for your customers to use (i.e., no card!).
- Keep these things in mind and your loyalty program will be an easy success.
Mike Martinez is chief marketing officer for DMEautomotive (www.dmeautomotive.com), an industry leader in science-based, results-driven automotive marketing that provides a range of marketing services to the biggest and most innovative automotive organizations in the industry. For more information, email firstname.lastname@example.org.