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Dealer
profit margins are tighter than they have been in years. To remain competitive,
dealers need to look beyond traditional marketing and sales methods to
gain and retain customers.
Today’s automotive consumers are more educated about their purchasing
decisions. They tap into the Internet and access a wealth of information
—all from the comfort of their favorite chair or on their PDA on
the showroom floor. So once a savvy customer has narrowed the field, how
do you win that customer’s loyalty in the sales process and keep
them coming back for ongoing service?
Dealers have made significant investments in DMS and CRM systems to manage
operations. These tools automate a number of activities and assist in
managing customer interactions, but they are unable to truly influence
customer buying habits. Real customer loyalty comes from offering customers
a reason to return to the dealership beyond the sales and service the
dealer offers.
Successful automotive loyalty programs are much more than a card and
simple tracking system. They combine the best element of CRM with a compelling
rewards-based marketing program. Solutions should include incentives and
automatic reminders that bring customers back for ongoing service.
Loyalty begins in sales
Rewards-based loyalty programs give new and used car sales managers an
additional value to sell in the sales process. Offering customers the
opportunity to be a part of a reward program gives customers one more
reason to buy from the dealership. And customers are more willing to do
business with the dealer because they know the dealer is interested in
keeping them for the long-term.
Improve F&I up-sell
Up-selling warranty and other F&I services significantly improves
dealer profitability. Creative dealers are packaging these value-added
services in a Platinum Loyalty Card. They’re bundling warranty,
oil changes, tire rotations or other services into a platinum package.
Customers perceive a greater value in this bundle of services and want
to be one of the dealer’s Platinum customers. As a result, F&I
is driving more revenue and profit.
Long-term profit comes from service loyalty
Customers have many choices when it comes to servicing their automobiles.
With a growing number of third-party oil change, and maintenance providers,
dealers need to focus on retaining their service customers. Recent NADA
statistics indicate that service and parts are 57 percent of a dealer’s
profits and 11.5 percent of revenue. Building customer loyalty through
a rewards-based program is the key to keeping customers coming back. Successful
loyalty programs offer customers points for each dollar spent in service.
These points are redeemable for dealer-offered services rather than trips
or other activities, which are unrelated to the dealers’ services.
And because the program tracks customer mileage with each visit, dealers
are able to discontinue other service reminder programs—saving time
and money.
Establishing a customer rewards program is an easy way to build customer
loyalty starting with new and used vehicle sales and continuing throughout
the dealership. As dealers continue to face profit pressures, a customer
loyalty program might just be the competitive tool they need to continue
their success.
For more information please contact Mike Gorun, Managing Partner, at
(800) 608-2080 or visit www.media-trac.com.
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