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Loyalty Drives Vehicle Sales, F&I, and Service
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.

April 4, 2006 – 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, contact Jeff Shenk at: 925-415-1300.

About Performance Loyalty Group

Headquartered in San Ramon, California, Performance Loyalty Group is a leading marketing technology company providing customized loyalty rewards, customer retention, prepaid maintenance and media tracking programs for the automotive industry.

Performance Loyalty Group Contacts

Jeff Shenk
Performance Loyalty Group
Sara Callahan
Carter West Public Relations

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