Let’s talk points

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I was out training this past week – one of my favorite things. I love being on the road and interacting with salespeople. No surprise to those who know me – a big part of my talking about loyalty is POINTS, POINTS, POINTS. The idea is simple: awarding points will make your customers almost twice as likely to buy from you. Here’s how it works:

This researcher Joseph Nunes gave out two different punch cards to two different groups of people.

Punch card #1 asked customers to buy 8 car washes to get their 9th free. These customers felt like they were starting from scratch.

card one

Punch card #2 asked customers to buy 10 car washes and get their 11th free. But, and here’s the kicker: these customers were given the card with two punches already out of it. These customers started with the perception of already have earned something.

card two

In summary: what we have is two different cards asking customers to do the EXACT SAME THING. The results? Astonishing. When customers felt like they had made progress toward the goal (punch card #2 – like they had points), the buying rate went from 19% to 34%. Nearly double.

Fortunately, I’m here to help. Points programs are unbelievably easy to implement. Give me a call, I’ll show you how.

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I bought a car yesterday

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Well, I didn’t. My girlfriend did. But, as I am simultaneously a GREAT boyfriend and also an auto marketing guy, I jumped at the opportunity to help her/observe the car buying experience first-hand..

I had the privilege of observing not only the deal happening at our desk, but we also dropped in during the middle of negotiations at the desk next to us. The sales guy was getting beat up pretty bad. Back and forth he went with the customer. “That’s the lowest price, I can’t go down any lower.” The customer wasn’t having it and kept pressing for a lower price.

The salesman huffed and puffed. He comes back, sits down, more arguing with the customer. Up from his desk, off to see the manager. He comes back, sits down, more arguing with the customer.

Over, and over again. I lost count how many times this salesman went off and came back.

How much were they arguing about? $100. ONE. HUNDRED. DOLLARS. You read that right – on a $27k vehicle purchase, the customer was arguing over a 0.3% price difference.

Finally, the customer caved. The salesperson reaches out his hand, and exhaustingly says, “congratulations” and shakes the customer’s hand.

By Contrast, our deal was far different. After my girlfriend picks out her car, we go to close the deal. The salesman comes in about $500 higher than we wanted, even after coming down in price. She’s not having it, and she’s a tough negotiator. So our salesman says, “How about if I throw in 2 years of oil changes and car washes?” She’s no dummy and does the math, and it made sense. She agrees. We drove out of there in a 2015 Accord. We left that dealership with smiles on our faces. She’ll return to get her service done there, and will probably buy her next car there too.

So what happened? Same car, same dealership, two vastly different customer experiences. Salesman Grumpy sold the car on price. Our guy sold on value. He closed at a higher gross, made a higher commission, and had a happier customer.

So how are you selling cars? If you’re selling solely based on price, you’re probably handing yourself a pay cut and the relationship with your customers probably isn’t great either.

When it comes to closing that deal, my advice is this: talk about what kind of value your dealership brings. Are you offering car washes? Free oil changes? How about discounts in the community or gas? If you’re offering these things and not talking about them at the point of sale, you may as well not offer them at all.

Need help presenting value to your customers? I’ve got a ton of ideas. Give me a call or shoot me an email.

Click here if you liked this story and are considering a loyalty program

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