How Loyalty Can Help You Shift Automaker and Dealership Success into High Gear

by Rohan Ahire |

Can you hear that? It’s the fundamental shift in how consumers are now buying cars. In response to the pandemic, consumers were quick to steer their car shopping online. Frost & Sullivan report that for automakers 72 percent of customer interactions are digital and dealerships are now often the last stop. Test drives are increasingly happening on YouTube. Digital interactions are now a major component in managing car buyer relationships and journeys, which is a challenge because many automakers and dealerships report having significant gaps in their digital marketing capabilities.

Two key factors predict whether automakers and dealers report high satisfaction with their digital marketing capabilities:

  • Their ability to provide a seamless customer experience across touchpoints
  • Their ability to unify customer data across channels into a single, comprehensive view of the customer

Source: Frost & Sullivan survey sponsored by Treasure Data

Meeting Consumer Increasing Expectations—Where the Rubber Meets the Road

Today’s car buyers want more. Specifically, they expect personalized engagement long before arriving at the dealership and a seamless experience across both digital and in-person interactions. Car buyers consider many factors—including preferences, lifestyle, commute, family safety, pets, and more. Because buying a car is such an emotional and personal purchase, consumers expect their journey to be personalized, so they can be confident their choice supports all these factors. Big brand awareness and one-size-fits-all messaging are no longer effective.

Meeting consumers’ expectations for personalization requires timely, unified customers. Unfortunately, automakers and dealerships are often use siloed legacy systems to house customer, transactional, and marketing data. This leads to disconnected messaging, marketing, and buyer journeys.

Why Automotive Loyalty Programs Are Gaining Traction

Customer loyalty strategies are one of the most effective ways companies can improve customer retention—and they’re gaining traction. According to a recent IHS Markit report, “During the past several years loyalty has emerged as one of the most-watched metrics in the US new vehicle industry, along with market share and profitability.”

Loyalty creates a mutual value exchange that enables automakers and dealerships to collect first-party data at scale and leverage it in real time across the entire buyer’s journey.

Here are just some of the reasons you should consider implementing an automotive loyalty program:

  • Increase Customer Lifetime Value—Leveraging robust first-party loyalty data enables automakers and dealerships to keep customers engaged and purchasing related products and services across their journey. Relevant, value-based engagement helps identify upsell and cross-sell opportunities and builds lasting relationships. It also keeps you top of mind when they’re ready to buy a new vehicle.
  • Gain a Unified 360-degree Customer Profile—Collect first-party data at scale to better understand your customers’ behaviors, preferences, and interests, respond to and anticipate customer needs in real time, and identify and reward your best customers.
  • Improve Marketing & Margins—Leverage first-party data to create more relevant messaging and offers at every touchpoint in the buyer’s journey. Gain visibility into customers who would benefit most from specific offers and avoid wasting ad spend on consumers least likely to buy.
  • Deliver an Individualized Omnichannel Experience—Create data-led, timely, relevant interactions across the entire buyer’s journey—from the time customers start researching online to driving off the lot and performing on-going maintenance. Individualize ads and promotions online, on mobile, via social, in person.
  • Increase Customer Acquisition—Gain new customers through advocates, referrals, and influencers
  • Inspire Innovation—Collecting timely, accurate customer data across their journey can lead to data-led product design, as well as new features.
  • Reduce Churn & Build Emotional Bonds—Deliver benefits customers can’t find anywhere else, like exclusivity and early access. Boost engagement and add value between purchases by rewarding desired behaviors and actions.

Examples of Automotive Customer Loyalty Rewards

Keeping customers engaged across their journey is key, so you’ll be top of mind when it’s time to make a purchase. Loyalty is a perfect way to engage, recognize, and reward customers. Here are a few ideas on how you could reward loyalty members:

  • Earn rewards based on spend, can be redeemed for discounts and exclusive offers
  • Earn points for oil changes, repairs, etc.
  • Earn points for purchase of a new car
  • Free trials of new technology (i.e. smart cars)
  • Earn points for downloading app
  • Gamification to collect data about driving habits, vehicle preferences, likes and dislikes
  • Partner rewards—reward with free treats or drinks, or discounts for repairs
  • Subscription-based membership—roadside assistance, free maintenance, etc.

Examples of How an Automotive Loyalty Program Might Work

When it comes to automotive loyalty programs, you have plenty of options. Here are a few ways automakers and dealers can leverage loyalty to build stronger customer bonds and accelerate growth:

  • Commitment-based Loyalty Program—Members receive a discount on their vehicle purchase, and in exchange, they commit to use the company’s services and network, including installing and using any required apps, as well as activating and using connected car technology to share data.
  • Membership-based Loyalty Program—The aim here is to nurture customers through members-exclusive content, such as exclusive offers and priority service. Anyone can join, but there are no discounts, as the goal is to make sure the brand is the first on customers’ minds when it comes to making a purchase or using a service.
  • B2B Loyalty Program for Partners—This type of automotive loyalty program provides special benefits and rewards for partners, suppliers, and subcontractors rather than customers, in order to boost the performance of these companies and strengthen the relationship within the partnership network.
  • Loyalty Program for Auxiliary Services—A coalition-based program can cover rentals, car sharing, body shops, car repairs, and other supplementary services, allowing customers to earn points from one brand, and then redeem it for a reward with another.

Annex Cloud

Annex Cloud’s Loyalty Experience Platform™ combines best-in-class loyalty management with powerful engagement and communication modules, enabling automakers and dealerships to build lasting customer bonds while accelerating growth. It’s modular, so you buy just what you need. Learn more about our automotive loyalty programs.

[White Paper]
[White Paper]