The automotive industry is undergoing a significant transformation. To thrive in this evolving landscape, car dealerships need to adopt innovative strategies to not only stay competitive but also build lasting customer relationships. Car Dealership Loyalty Programs have emerged as a powerful tool in this context. While initially underestimated in the automotive sector, these next-generation reward systems are now proving their worth in boosting key performance indicators for dealerships.
For deeper insights into the trends shaping the future of customer loyalty and valuable statistics, download our comprehensive Global Customer Loyalty Report.
Key Takeaways – Quick Insights
- Car dealership loyalty programs are specifically tailored to address the unique challenges and opportunities within the dealership environment.
- Leveraging connected car technology opens up exciting new avenues for rewarding customer loyalty at dealerships.
- B2B loyalty initiatives and strategic partnerships are increasingly valuable for enhancing dealership programs.
- Effectively incentivizing data sharing through loyalty programs is crucial for personalization and improved customer experiences.
- Explore our curated collection of 8 inspiring loyalty program examples to spark your own dealership strategy.
Understanding Car Dealership Loyalty Programs
Car dealership loyalty programs are specialized customer retention strategies designed for businesses operating in the automotive retail sector. This includes franchised dealerships, independent car retailers, and automotive service centers.
Whether it’s a manufacturer-backed program implemented at dealerships or a dealership-specific rewards system, the primary objective remains consistent: to enhance customer lifetime value for the dealership. However, the specific goals of these programs can be diverse, ranging from enhancing personalized customer interactions and increasing brand visibility to strengthening online presence and driving repeat business.
“As connected car technology becomes more integrated, dealerships have an unprecedented opportunity to enhance loyalty programs. By offering valuable incentives through these programs, dealerships can significantly increase customer preference for their services over independent garages. The location-based capabilities of connected cars further expand these opportunities. Imagine a dealership partnering with a popular coffee chain to reward customers for choosing their preferred brand, extending reward points and redemption beyond the traditional dealership service experience.”
Tom Arnold
Account Director at Acxiom UK
Here are several models of car dealership loyalty programs that dealerships can implement:
- Commitment-Based Programs: Customers receive upfront benefits, such as discounts on vehicle purchases, in exchange for a commitment to utilize the dealership’s service department, engage with their mobile app, and enable connected car data sharing.
- Membership-Based Programs: These programs focus on creating a sense of exclusivity and value through member-only perks. While not always offering direct discounts, they prioritize making the dealership the first choice for future purchases and services through exclusive content, priority service scheduling, and special offers.
- B2B Partnership Programs: Dealerships can extend loyalty programs to their business partners, including suppliers and local businesses. These programs reward partners for their collaboration and contribution, fostering stronger relationships within the dealership’s network.
- Service-Focused Coalition Programs: Dealerships can collaborate with related automotive service providers like repair shops, body shops, and car rental agencies to create a coalition program. Customers earn points across this network and redeem them for rewards at any participating location, increasing the overall value proposition of the program.
BMW Digital Connect features, which can be activated remotely via subscription, represent potential high-value rewards in a car dealership loyalty program.
Overcoming Customer Retention Challenges in Car Dealerships
Understanding the unique challenges faced by car dealerships is essential for designing effective loyalty programs. The automotive retail industry grapples with infrequent purchase cycles, leading to several key pain points:
- Limited Customer Touchpoints
- Difficulty in Gathering Comprehensive Customer Data
- Reduced Ability to Influence Customer Behavior
Want to discover more innovative ways to collect customer data? Watch our Mission: Loyalty video for valuable insights on loyalty data collection!
Due to the significant investment associated with vehicle purchases and maintenance, dealerships have limited windows of opportunity to engage with customers. This infrequent interaction makes it challenging to gather detailed data on vehicle usage, customer preferences, and driving habits, which in turn hinders personalization efforts. Furthermore, the lack of consistent touchpoints makes it harder to cultivate strong brand loyalty and educate customers about dealership services and offerings.
However, emerging technologies are poised to transform the industry. Connected car technology, in particular, offers dealerships new avenues for continuous customer engagement. Features like smart parking subscriptions not only enhance vehicle management but also encourage frequent interaction with the dealership’s smartphone app, creating opportunities for personalized push notifications and ongoing communication.
Whether leveraging dedicated mobile apps or connected car data, a well-designed loyalty program can significantly enhance customer retention by incentivizing valuable customer actions and fostering ongoing engagement.
“Personalization is the cornerstone of building lasting brand loyalty, especially in the automotive sector. Car purchases are infrequent, making consistent engagement crucial. By creating personalized and targeted interactions over time, dealerships can cultivate brand loyalty and drive long-term customer retention.”
Patrina Kerr
CEO of Hachiko
Essential Loyalty Program Features for Car Dealerships to Excel
Effective car dealership loyalty programs are built upon a combination of key features. To stand out and capture customer attention, dealerships need to seamlessly integrate these elements into their programs. Here are some of the most impactful features for creating a successful car dealership loyalty program.
Engaging Program Membership Page
Dealerships often underestimate the importance of a visually appealing and user-friendly program “hub.” The membership page serves as the primary point of interaction for customers with the loyalty program. It must be inviting, easy to navigate, and clearly communicate the benefits of membership. Key elements include a prominent display of member loyalty IDs for easy in-dealership recognition and a comprehensive FAQ section to address program rules and details.
A well-designed membership page should clearly display customer progress towards rewards and tier advancements.
Robust Loyalty Engine
The loyalty engine encompasses the core mechanics of the program. A points-based system is a common approach, where customers accumulate points based on spending at the dealership, service center, or partner locations (in coalition programs). These points can then be redeemed for discounts on future services or exclusive offers.
Alternatively, a perks-based system offers unconditional benefits to all members upon enrollment. Perk programs are ideal for building a centralized customer database and gathering contact information for ongoing engagement and communication. Perk loyalty programs are particularly effective for dealerships aiming to nurture a broad customer base.
Coalition Program Opportunities
Coalition loyalty programs bring together multiple brands under a unified program umbrella. For car dealerships, this could involve partnerships with manufacturers, local repair shops, auto parts retailers, and even gas stations. Unlike simple partner reward integrations, coalition programs allow customers to earn points at any participating location and redeem them at another within the network, significantly enhancing program value.
Coalition programs dramatically increase the value proposition for loyalty program members, giving dealerships a competitive advantage.
Subscription-Based Membership Model
While most loyalty programs are free to join, dealerships can consider a subscription model, especially if they offer high-value rewards. Similar to Amazon Prime, a subscription fee can be justified if the program delivers substantial benefits that members find highly desirable. For dealerships, subscription benefits could include premium roadside assistance, complimentary maintenance packages, proactive vehicle health monitoring, and more.
Strategic Partner Rewards
The allure of a car dealership loyalty program is significantly amplified by offering a diverse range of rewards through strategic partnerships. Members could enjoy perks like complimentary beverages at local coffee shops or discounts on car parts from partner auto stores. A well-curated reward catalog focused on convenience and relevance, leveraging a strong partnership network, is crucial for program success.
Partner rewards are identified as a key trend in customer loyalty for the coming years. Download our Global Customer Loyalty Report 2023 to explore this trend further!
Gamified Data Collection Techniques
Addressing the challenge of limited customer data, dealerships can utilize gamification within their loyalty programs to gather valuable insights. Interactive surveys about driving habits, vehicle preferences, service experiences, and lifestyle interests can be incentivized with loyalty points or rewards.
By implementing advanced customer profiling based on survey responses, dealerships can create targeted customer segments and personalize communication. This data-driven approach enables more relevant email marketing campaigns and tailored service offerings.
Gamified profiling unlocks a new level of customer understanding for dealerships, enabling highly personalized interactions.
Connected Car Technology Rewards Integration
The rise of connected car technology presents unique reward opportunities. Dealerships can leverage loyalty programs to introduce customers to these features. Offering free trials of connected services, such as enhanced driving assistance or remote vehicle management, as loyalty rewards can drive adoption and engagement. Members could earn points to extend these trial periods or unlock additional connected features.
Mobile Engagement and Accessibility
A dedicated loyalty app, complete with a digital loyalty card, acts as a central engagement hub, significantly increasing customer touchpoints. The app can deliver personalized notifications about exclusive deals, service reminders, and program updates. Furthermore, the app can facilitate service scheduling, reward redemption, access to partner offers, and interactive quizzes. Integrating a Mobile Wallet solution to store the digital loyalty card alongside service appointments and reward passes further enhances convenience and accessibility.
Watch our video to learn how Mobile Wallet integration can strengthen customer engagement and dealership-customer communication.
8 Inspiring Car Dealership and Automotive Loyalty Programs
Explore these real-world examples of successful car dealership and automotive loyalty programs for inspiration:
1. Enterprise: Enterprise Plus
Established in 1957, Enterprise is a global car rental leader with over 8,000 locations. Their customer-focused loyalty program, Enterprise Plus, combines earn & burn mechanics with a tiered structure.
- Earn 1 point for every dollar spent, redeemable for discounts on future rentals or free rental days.
- Points expire after 3 years but can be extended with qualifying rentals.
- Four membership tiers offer increasing benefits based on rental frequency or duration.
- Tiered benefits include accelerated point accumulation and complimentary vehicle upgrades.
Generous point expiration policies, particularly in automotive loyalty programs, are crucial for customer engagement and program appeal.
Why it works:
- The earn & burn model remains effective in the car rental industry due to more frequent customer interactions compared to car purchases.
- Multi-year point expiration policies are highly customer-friendly in this industry.
- Tiered programs effectively sustain customer interest and engagement over extended periods.
2. Ford Motor Company: FordPass
Ford, a pioneering automotive manufacturer, has embraced innovation with its app-based loyalty program, FordPass, rewarding loyal drivers in multiple ways.
- Customers earn points on Ford purchases, redeemable for discounts at participating dealerships.
- 42,000 points unlock complimentary flexible maintenance services.
- 24/7 roadside assistance is accessible via the FordPass app for program members.
- Loyalty members receive exclusive early access to events and vehicle announcements.
- The app enables remote vehicle control and monitoring features.
Ford’s partnership with Visa offers additional rewards to customers, incentivizing spending within the Ford ecosystem.
Why it works:
- Strategic partnerships expand point-earning opportunities for customers across various purchases.
- Benefits like roadside assistance provide significant practical value to drivers.
- Early access perks create a sense of exclusivity and appreciation among loyal customers.
3. BMW: Inside Edge
BMW UK launched Inside Edge (powered by Antavo) to directly engage with company car drivers. This perk-driven program offers instant access to rewards without point accumulation.
- BMW owners register using their license plate, which is validated by the system.
- Rewards include claimable gifts like movie experiences and prize draw entries.
- Short surveys enhance personalization by gathering driving habit and preference data to tailor future rewards.
Inside Edge focuses on building strong relationships with company car owners through exclusive benefits tailored for fleet drivers.
Why it works:
- Perk-driven loyalty programs offer immediate gratification and inclusivity.
- Prize draws add excitement and variety to the reward offerings.
- Partner rewards beyond car-related benefits, such as coffee vouchers, appeal to a broader demographic.
4. Volvo Cars Loyalty Program
Volvo in the UAE region implemented a unique program offering benefits on parts and labor based on vehicle age. Older vehicles qualify for greater rewards.
- Four tiers based on vehicle age: 0-2, 3, 4, and 6+ years.
- Discounts up to 35% on parts and 30% on labor.
- Additional benefits include free vehicle checks, mobility car discounts, and complimentary car recovery.
Volvo’s program incentivizes existing customers to maintain their vehicles and fosters long-term loyalty by rewarding continued ownership.
Why it works:
- Tiered programs effectively motivate customers to strive for higher levels of benefits.
- Age-based tiers naturally reward long-term brand loyalty and vehicle ownership.
- Tiering creates a sense of progression and exclusivity within the program.
5. Europcar: Privilege Loyalty Program
Europcar’s Privilege program is a leading example in car rental loyalty, featuring a hybrid approach with instant perks and tiered benefits.
- All members receive a 10% discount on rentals of 3+ days.
- After 3 rentals, members earn a free weekend rental, priority service, and a free car upgrade.
- Top-tier members receive double upgrades and a Priority Pass for airport lounge access.
The Privilege program effectively targets both frequent and occasional renters, with a separate version for business travelers, demonstrating program adaptability.
Why it works:
- Inclusive baseline rewards drive program enrollment and participation.
- Valuable benefits like free upgrades offer tangible value and program appeal.
- Hybrid programs combine the advantages of immediate perks and long-term tier progression.
6. Nissan: One to One Rewards
Nissan’s One to One Rewards program focuses on rewarding customers for spending on vehicles, parts, and services at dealerships.
- Points are earned for purchases of vehicles, parts, and services.
- Vehicle purchases earn a $250 discount towards the next vehicle purchase.
- Enrolled members receive a physical loyalty card for in-dealership recognition.
Nissan utilizes a traditional earn & burn approach, offering simplicity and ease of program launch and management.
Why it works:
- High-value rewards are justified for significant purchases like vehicles in the automotive industry.
- A substantial discount on a future vehicle purchase is a powerful incentive for repeat business.
- Physical cards can still convey exclusivity and program membership.
7. Fred Beans: AutoRewards program
Fred Beans AutoRewards, from a family-owned dealership group in the Philadelphia area, emphasizes discounts and rewards for customer engagement.
- Points are highly valuable, with each point redeemable for a $2 discount (up to $2,000).
- Tiered rewards include free oil changes at point milestones (350, 500, 750, 1,000 points).
- Points are earned for purchases and non-transactional activities like referrals and mobile app usage.
Fred Beans effectively engages customers beyond the purchase cycle, fostering ongoing brand connection and loyalty.
Why it works:
- Frequently used services, like oil changes, make impactful and desirable rewards.
- Tiered rewards ensure continued customer engagement and program progression.
- Rewarding non-transactional activities maintains brand engagement between purchases.
8. Subaru: Ownership Benefits
Subaru of America offers a range of Ownership Benefits to all Subaru drivers, rather than a traditional points-based loyalty program.
- Benefits include insurance discounts, tech subscription offers, free magazines, and event invitations.
- Program access is exclusive to verified Subaru owners.
- Benefit application is individual, lacking a unified program experience.
- Regularly updated benefit list encourages frequent program page visits.
Ideally, automotive loyalty programs should offer a seamless user experience, consolidating access to benefits on a single platform, even for third-party partnerships.
Why it works:
- Program exclusivity for car owners enhances perceived value and desirability.
- Unlimited reward access compensates for potentially complex enrollment or validation processes.
- Regularly refreshed reward offerings maintain program interest and engagement.
Accelerating Towards Customer Loyalty Success
Car dealership loyalty programs offer substantial opportunities to drive brand success by cultivating genuine customer loyalty. We are ready to demonstrate Antavo’s advanced loyalty solutions and API capabilities to support your dealership’s loyalty program development. Send us your RFP to explore how we can help.
Don’t forget to download Antavo’s Global Customer Loyalty Report for in-depth statistics and future trends to guide your next-generation loyalty program strategy.
Sheila Power
Sheila is Antavo’s VP of UK & North America, bringing extensive experience in consulting and SaaS technology within the loyalty program space. She is passionate about helping brands develop and implement effective loyalty strategies.
