Secrets to getting the most out of your customer loyalty program

As you know, at re:member group we specialize in automotive loyalty marketing. And along the way we have learned what makes an automotive loyalty program a success. In today’s fast paced, highly digitalized world, it isn’t enough to just create a loyalty program and hope it does all the heavy lifting for you.

The creation of a successful loyalty program takes into consideration how it interacts with customers, and how well it delivers their wants and needs. Loyalty isn’t a scheme it’s a relationship, and like any relationship, it takes time and hard work, but it is always worth the effort. Studies suggest it costs more to acquire a new customer than to keep an old one, so why not take advantage of that!

Things to think about when designing your program

Set a goal that you want your customer to achieve

For example, if you have an automotive loyalty program in place, your ultimate goal for them may be to redeem their points on a future service, or vehicle purchase. Without a goal for them to reach, they will have no motivation to earn points.

Think about what behaviors you want to reward them for.

Do you want to reward them for filling out a survey, getting their vehicle serviced, referring a friend? Decide on some behaviors that would benefit your company, and let them know how much you appreciate it by rewarding them.

Give them a head start

Do you want to reward them for the simple act of engaging, such as activating their rewards account? Giving them an easy way to earn points when they get started is like giving them a head start. We all know how the endowed progress effect works right? If not, it’s rather interesting, and you should read more about it here.

Make it easy for them to interact

Some loyalty programs make it so confusing to figure out how many points you have, or how you can go about redeeming those points. With our loyalty programs we make sure it is easy for the customer to keep track of their points, redeem points, and understand all the ways they can earn rewards. They can login and see all the important information about their account from any device, making it easy for them to be engaged in the program.

Continue to engage with your customers

We have all done it, signed up for a rewards program just to get a specific discount or benefit, and then it leaves our mind, and we never think about it again. Without interaction, a customer either loses interest, or forgets all about it. That’s why it is important to interact with them by sending them emails, or offers in the mail that allow them to take advantage of special discounts or events. If you treat them like they are important and not just another number, they will be more likely to be repeat customers.

Engaging the customer with a relevant message builds trust and keeps the company on the top of their mind for when they are ready to purchase in the future. According to Retail TouchPoints a customer’s overall satisfaction with a loyalty program is 4.6 fold higher when they receive relevant communications.

Continue to evaluate the existing strategies

Listen to things your rewards members are saying. We get customer feedback on a daily basis in our customer service department. Another way to get honest and helpful feedback is to send out surveys. Find out what existing strategies have been successful. Consistently listen to your customers on an ongoing basis to revise the program as needed. If you can understand the customer needs, then it is easy to craft a valuable customer loyalty program.

When a customer loyalty program is done right, it can be very rewarding. But if done wrong, it is just a waste of time. If you already have a customer loyalty program with us, hopefully you learned some helpful tips on getting the most out of your program. If you are interested in setting up a loyalty program for your business, or would like some more information, please give us a call at 952-224-8000.

Get In Their Brains

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How do you get inside the brain of an average customer? Give them the chance to provide feedback of course. If you don’t give a person the chance to provide an opinion, how will you know what needs to be done in your company? It is simple. One person can’t successfully grow a business. It takes many people to provide different aspects of the puzzle. A person once said, “Two are better than one.” Two masterminds are better than one. What the heck, even three are better than two. This same principle can be applied to your customers. How else will you know what they are thinking about your business?

A customer holds all the key pieces to what it takes to build a loyal base of fans. They are the eyes, ears, and mouth of a business. They know what could be changed about the product, they know what they like, and they know what could use some improvement in the experience. It is always important to utilize surveys, emails and social media to get a feel for what they are thinking. The number one thing is to get them to feel connected to your company. There is no better way to make sure your customer’s experience is top notch.

There are many things you can do to make sure you are hearing all thoughts and opinions. Provide your customers with an incentive to write a review. We all know that word travels fast, whether it is bad or good. There are emails and surveys dedicated to getting the most information you can gather about your services. If you have a call center, have your employees ask questions. “How was your experience with (so and so company) today?” “If you could change one thing about (so and so company), what would it be?” This way it comes straight from the customer’s mouth. Often times, this can be the best way to get feedback. If you want to grow your company, make sure you are asking questions. After all, the customer is what makes your business. Without them, there would be no growth. Have you gotten a handle on what they are thinking?

 

Walser Rewards – The re:sults

In case you are curious, we get serious results at re:member group. Walser Automotive Group teamed up with the us to create Walser Rewards a few years ago. The program is very simple; members earn 10% back in points of what they spend in the service department. The points go into their personal account to be redeemed towards their next vehicle purchase. The results have been astonishing as each year the program continues to grow. The infographic below proves how creating loyal customers can improve your profits. re:member group can help you create your own rewards program, so you can start gaining loyal customers and making more money.

(Click infographic to enlarge.)

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2 Ways to Improve Your Loyalty Program

Our guy Tim educating employees and making them advocates one at a time

Don’t Make Your Members Jump Through Hoops

Customers want a rewards program that is easy, fast and rewarding. Make the enrollment process simple or people won’t join. Redeeming points or rewards should be just as easy. Step back and walk through all of the aspects of your program as if you were a customer to see how it easy it is. Better yet have your parents try to enroll or use the program. If there are confusing areas or things they don’t understand, fix them!

Employee advocates of your rewards program

Our guy Tim educating employees and making them advocates one at a time

Educate Your Employees

Your employees are your best advocates. I’m sure you’ve heard this before, but it is so true. You could have members not using the program because they were never invited to sign up or the benefits were never explained. Worst case scenario, employees get asked questions about the program and they don’t even know. Educate your employees and make your rewards program a part of your identity and training. Have a contest to see who can enroll the most members or give incentives for the employees who ask their customers if they have points to redeem. If your employees are pumped about the program, your members will be too.

If your loyalty program is encountering a slump, don’t get discouraged. Just take this as a way to revive it to its full potential. If your program needs more help than this, check out re:member group’s awesome tools. Or better yet, give us a call or shoot us an email, we’d love to help!

Creating Customers For Life

Focusing on customer retention is one of the most rapidly growing trends in the automotive industry. Manufacturers are driving retention, and with good reason. Newly appointed GM CEO, Mary Barra shared her thoughts in a 2012 statement, “We believe a single percentage point improvement in sales retention is about 25,000 vehicles or about $700 million annually, so it’s a pretty big financial incentive.” A single percentage point!

While retention to an automotive brand is all well and good, I can still buy that same vehicle from any number of area dealers. The same holds even more true in fixed ops. Not only are we competing for that customer’s service business with other dealerships, we are fighting the independent shops as well as the quick-lube/tire/brakes shops.

What sets your dealership apart? The answer we hear time and time again: we’ve got the best people/parts/products. The best sales/service/selection. The truth may very well be that you do, but your competition is saying the exact same thing. And it is falling on deaf ears. You’re dealing with a more informed consumer than ever before. At the click of a mouse they can learn everything about your dealership, your special offers, what people think about you. They can do the same for your competition.

So how do we attract, create and keep a customer that is loyal to your dealership? The first step is truly separating yourself from the other guys. What are you offering the customer that the competition can’t? We need to stop talking about price and start talking about value. How are you making your customer’s life better? What are you providing that makes it worth choosing your dealership every time?

Think about the last flight you took. The last hotel you stayed in. The credit card you used to pay for those. Did you earn points? Do these multi-billion dollar industries offer a rewards program simply because it’s cute? Come on – these are banks! The truth is that a loyalty initiative is one of the most effective tools available to drive more business, more often.  In today’s economy, a customer is expecting their dollar to go further and are willing to go to great lengths to continue doing business with an organization that rewards them for their loyalty. How far will they go? Rockwell Clancy, VP of Financial Services at J.D. Power and Associates had this to say – “Consumers will often pay higher prices, or stick with a service that’s unsatisfying, simply because they’ve started earning points.”

What does this look like in the auto dealer world? The Walser Automotive Group in Minneapolis, MN, together with the re:member group, created the Walser Rewards program to attract and keep their most profitable customers. It couldn’t be easier to play. Members enroll for free, simply by providing an email address. Once enrolled, 10% of customer pay service work goes into a bank account that they can redeem toward their next vehicle purchase. The results have been amazing – Walser found that Members of their program service more often and spend 40% more in service than non-Members. This resulted in a boost of $4.6 Million in additional service revenue in a 2011 study and it continues to grow every year. Better still – since these points are redeemable only toward a vehicle purchase, Walser is on target to sell over 1,000 vehicles in 2013 from points redemptions. This holistic approach to customer loyalty has helped Walser attract and keep loyal, profitable customers in both service and sales, all while delighting the customer.

Customers that are truly loyal to your dealership are going to do 4 very important things that have a big impact to your bottom line. 1) They visit your dealership more often – not just for the major repairs, but for all repairs. 2) They spend more. A loyal customer is less price-sensitive and more likely to agree to recommended services. 3) They give great feedback. You’ll learn powerful insights from your customers and see strong online reviews – thereby attracting more customers. 4) They refer their friends and family. There is no greater form of advertising than a personal recommendation from a happy customer.

A customer becomes loyal when you present a value that the competition can’t match. When you exceed a customer’s expectations – not simply by satisfying them.

Nate Sieveking is president of the re:member group, the auto industry leader in customized loyalty solutions (www.remembergroup.com). You can email him at nate@remembergroup.com.

What is Your Break Point?

I’m incredibly loyal to my airline. Its been years since I even checked the competition’s pricing. Why? Because in a very competitive market, where the end result is always the same (I land at my destination) I know that prices are generally going to be with a narrow range. I choose my airline every time for one reason – the frequent flier miles. When you get that free trip from Minneapolis to St. Petersburg, FL in a snowy November – there’s no beating it!

Today however, I reached my break point. While looking to book business travel, the dates and times just didn’t add up. When I needed to land, I found the tickets from my airline were 50% higher than times that simply would not work. 50% higher! I reluctantly did my cross shopping and found the tickets with another carrier at the right date/time matching the best price of my airline at the wrong time. And so with a heavy heart, I booked with the competition. No frequent flier miles this time around.

The same can be true in any industry – when the product is essentially the same (a Toyota Camry is a Camry where every you buy it), and in a competitive market, 50% more is simply too much to justify the price vs.

breakingpoint

the loyalty factor.

Now luckily for us,. we’ll rarely ever see a scenario in the retail sector where the same product would vary by 50% between competitors. Loyalty programs however have proven time and again that a customer will spend more (even for unsatisfying service) if they are earning rewards. We’ve heard story after story of dealerships selling a vehicle for $500+ more than the competition, simply because the customer had points to cash in. This means a loyalty program can drive higher margins, while still closing sales. It’s a win-win scenario – as long as we’re not crossing the Break Point.

So what is your Break Point? Where’s the magical threshold that makes you leave your favorite business? Or is price the only factor that would cause you to defect? Leave us your thoughts in the comments. If you’d like to discuss customer loyalty and the huge impact it can have on your business, give us a call at 866-414-2582.

Also – do yourself a favor and go see Point Break. You can thank me later.

 

Nate Sieveking

President

nate@remembergroup.com

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