Performance Loyalty Group Study Finds Auto Dealer Loyalty Program Members Visit Service Department almost Twice as Often, Spend Twice as MuchSan Ramon, CA – March 26, 2012 – Performance Loyalty Group today announced the results of a new comprehensive study of 72 automotive dealerships and over 6 million repair order transactions from January 1, 2010 through February 29, 2012, which proves that customers choose to stay longer, spend more and repurchase more often at dealerships that reward their patronage. The results are covered in a new eBook: "The Hard Facts & Financial Impact Report - Auto Dealership Loyalty Programs & the Effects They Have on Profitability." Visit www.performanceloyalty.com to download a free copy.
The study shows that auto dealership customers enrolled in rewards-based loyalty programs visit their dealership every 4.26 months versus every 6.82 months for non-members. Average annual member spend mirrors the increase in visitation with a 97% increase in overall retail spend. Furthermore, according to the study, retention of members is nearly 60% - almost three times the NADA average and better than many non-captive service OEM-branded loyalty program goals.
Key elements of the study include:
- The comprehensive study included 72 individual, multi-and single-brand domestic and import dealerships conducted from January 1, 2010 through February 29, 2012.
- Loyalty rewards members at dealerships participating in the study totaled over 864,000.
- Over 6 million repair order transactions were segmented and analyzed over the data analysis period. Data was derived directly from participating stores' Dealer Management Systems (DMS).
- All participating dealerships had an existing points-based loyalty program in place for a minimum period of 12 months prior to the data extraction period for this study.
- All participating dealerships employed a captive-sales and service element. Members were required to redeem earned benefits only at the issuing dealership.
In addition to confirming member retention and spend increases, the study provided evidence of these programs' marketing responsiveness, member versus non-member vehicle repurchase intent and sales-to-service conversion rate. For full results download this new eBook.
"A popular national chicken franchise spends more to retain customers of its $1.99 sandwich than most dealers do to retain customers that spend tens of thousands of dollars to purchase a vehicle. Dealers are losing considerable opportunity, our study shows, by neglecting this customer-loyalty-building part of their business," notes Mike Gorun, President, Performance Loyalty Group.
"However, with this study," Gorun adds, "dealers now have the proof that loyalty programs do retain customers, sell more service and sell more cars."
In fact, the study found that on average dealerships enrolling customers in these programs sell an additional 15 vehicles a month. These sales are to customers redeeming rewards points/dollars toward those purchases.
The Performance Loyalty Group study found that compared to non-members, member customers:
- Visit their service department more often, 2.82 times per year compared to 1.76 annual visits.
- Spend $662.01 annually compared to $336.63.
According to Performance Loyalty Group President Mike Gorun, the study is important for the industry. "Dealers rightly look hard at every investment's ROI," he says, "so this evidence is confidence that rewards-based loyalty programs can indeed increase their business - and measurably so."
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.
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