Add a Little Magic to the Experience - AutoSuccessOnline

Add a Little Magic to the Experience

Discounts are a bribe. You are spending money to gain business and hoping it leads to more business. With a loyalty program, it is just the opposite. The customer gives us business and then we give them the "thank you."

It fascinates and amazes me that everyone in the automobile business doesn’t use a rewards program to thank their customers for their business. I don’t know the exact number who do, but over the course of visiting with more than 200 dealerships per year it appears to be a very low percentage of dealers who understand this concept.

Every industry wants to keep their customers engaged and coming back to do more business, and some have figured out how to make this happen. How many people fly and don’t sign up for the airline rewards card? The same goes for hotels, grocery stores and gas stations. When you think about it, most of us have multiple rewards programs we belong to and get rewards from.

The psychology of these programs is pretty simple to grasp: “I’m going to spend my money with you and, in return, you will invest in me to get my future business.” This is a true win-win for both the customer and the business. Many consumers have stopped using cash all together, opting to put their purchases on a credit card connected to a rewards program. The entire loyalty equation is changing. People don’t buy from you today just because their parents did. The prices on most products are already bare bones due to increased competition, so consumers don’t just buy because of a lower cost. Customers don’t always come back because we treat them right. There is not a company today that doesn’t think they treat their customers better their competition does.  Customers know that, if you don’t appreciate their business, someone else will.

In the cost-conscious world of the automotive industry, some dealers may look on a reward program as an extravagance. This is not and does not have to be the case. A small percentage back in rewards can add up quickly for the customer and, over time, all these visits will create numerous ROs. Think of it this way: A coupon for a $9.95 oil change will cost the service department $20 to $30, or more. Most likely, this will bring us a “price” buyer who spends money just for the oil change — and we’ll never see them again. That same money credited to a rewards program will, in most cases, bring us two or three ROs and, over time, a loyal customer who continues to use our dealership for all their automotive needs.

The differences between a rewards card and coupons or discounts are significant. Discounts are a bribe. You are spending money to gain business and hoping it leads to more business. With a loyalty program, it is just the opposite. The customer gives us business and then we give them the “thank you.” The best part about this method is we have thanked the customer, but he needs to do more business with us to reap the reward.

Let me go over that one more time — when you use a discount or coupon, the cost is up front and final. When you use a loyalty program with rewards, the recognition is up front but the cost is down the road and is developing future customers, not one-time buyers. The reward will motivate your customer to return to your business time and time again.  The promise of a reward will cause your customer to pass up the competition to get the reward.

A synonym for “reward” is “award.” Isn’t that what it is really all about? We all want to receive an award for the things we do. Awards are given to our top athletes, our top writers, actors, scholars and so on. The same principle must apply to our customer base. How are you awarding the customer for taking the actions you want?

Reward programs are an integral part of growing your business. They are easy for the customer to understand and cost effective. These programs answer two of our most important questions: “Why buy here?” and “Why service here?”  If we are not reinvesting back into our customers, we are wasting a golden opportunity to build repeat business.

Jack Garrity

You May Also Like

Connect to What You Expect

Recon workflow software is designed to bring accountability and organization to this chaotic part of your business.

If you practice management-by-number in your stores and yet don’t know with 100% certainty what your reconditioning times, costs and opportunities are, you’re not connecting to what you expect. 

What we mean by connecting to what you expect is reconditioning driven by a time-to-line (T2L) strategy that takes the uncertainty out of this vital business function. 

The Most Powerful Skill in Selling

If you can’t listen to what your customer is saying, how do you really know that you’re solving their needs?

Are You Ready to ROCK in 2023?

It’s time to meet today’s Vehicle Care RockStars, and we are asking you to help get us backstage.

The End is NOT Nigh

Car buyers abandon digital tools when the process gets too complex — easy-to-use ecommerce capabilities are essential.

Is the Sky Falling, Chicken Little?

Don’t let anyone fool you into settling for mediocrity in the showroom or online. 

Other Posts

Merchandising Strategies from Online Disruptors

Your online merchandising needs to rival Carvana’s. Here’s how to generate that emotional attachment.

The Game Plan Has Changed

Winning consistently never happens by accident; it’s time to focus on the fundamentals and get your game plan in order.

Top 10 Reinsurance Mistakes (& How to Avoid Them) Part 1

The right program can benefit every aspect of your dealership enterprise — from F&I and fixed ops to succession planning and retention.

If It’s Not Broken, Break It

Recon software provides the data to manage and motivate by the numbers.