All You Need to Know About Automotive Loyalty Programs
- Posted on September 6, 2022 by natalia
- Reading time about 6 minutes
Winning your customers ‘hearts is essential if you want your business to succeed and gain a competitive advantage in the tough market. Loyalty programs are gaining huge attention in several industry sectors to help businesses retain customers and gain maximum positive outcomes.
Talking about the automotive industry, many car manufacturers, dealerships, and repair services owners struggled a lot to not just stay ahead of the competition but to survive in the market. In the year 2020, this industry witnessed the growing demand to start introducing new and disruptive measures to meet evolving customer needs. Automotive loyalty programs hold the potential to drive KPIs for such businesses.
In this blog, you will learn everything you need to be aware of related to an automotive loyalty program, the challenges, and the best loyalty program features that can help you stay ahead in the automotive business.
Automotive Loyalty Program –What Is It & Why Your Business Needs It?
As customer retention plays a great role, a loyalty program is a must in every business. Automotive loyalty programs can be defined as the unique customer retention tools used by the automotive industry. The common goal of a loyalty program used by many automotive business owners is to increase customer lifetime value. However, these programs can be tailored to meet the individual KPIs of different brands having multiple goals like delivering more personalization, increasing brand awareness, boosting social media presence, etc.
Some common loyalty program examples are stated below-
1. Commitment Loyalty Program
Here, loyalty program members get an exclusive discount on their vehicle purchase, but in return, they must stay committed to the brand by using their services & network for app installation and usage enabling brands to use customer data.
2. Membership Loyalty Program
Aimed to nurture customer relationships through a members-only program, customers get priority services, privileges, and special offers. Anyone is free to join this program & avail of these benefits.
3. B2B Loyalty Program
Built exclusively for partners, suppliers, and subcontractors, these programs offer special rewards and benefits to boost the performance of the companies and boost the relationship with partners.
4. Coalition Loyalty Program
This is a program run for rentals, car sharing, car repairing, body shops, and others that enable customers to earn points from one brand and redeem them on another brand with the help of an effective Customer Points System.
Top Challenges Faced By Automotive Businesses while Retaining Customers
Before choosing the loyalty program and its features, the business owner must understand the specific needs and challenges faced by automotive businesses. Known for facing low purchase frequency in the automotive industry, there are two challenges faced as-
– Lack of touch points with customers
– Having no proper customer data
– Lack of capability to influence customer behavior
As the automotive industry is mainly associated with high-value purchases that don’t occur frequently, companies have limited time to interact with customers, making it hard for them to collect & analyze customer data, hence, personalization is still a big challenge.
Things have changed with the evolution of technology in this industry. Connected car technology enables seamless vehicle management with features for intelligent parking. This not only helps in engagement but also prompts users to make use of the app through push notifications.
Main Features to Make Your Automotive Loyalty Program a Success
Though automotive loyalty solutions are still new in the market, having an idea about the most relevant features can help in building the program of your choice. Here are some of the best features-
– Interactive Program Membership Page
The main point of contact where people will have an idea about the program is the membership page, where one must showcase easily understandable features along with all the benefits. This page plays the main role in helping customers understand the program and also features a unique membership ID for easy account access, tracking, in-store identification, etc.
– Coalition Program
As the name suggests, these programs unite several brands in one place building the relationship between manufacturers, dealerships, repair stores, etc. The best thing about such a program is that it enables customers to earn points at any location and spend them at another.
– Subscription-Based Models
Many customers prefer to use the loyalty program only when it is offered for free. However, there are popular brands like Amazon that charge monthly/yearly subscription fees and are quite successful in the market. The reason behind this is value, which means customers are willing to pay sine amount if the brand will offer rewards that are highly desirable for their program members.
– Partner Programs
Offering a variety of rewards through partners is an attractive aspect of the car or dealership loyalty program. Whether members get a free coffee at their favorite store or a special discount on car parts at the car body store, these benefits or rewards are preferred by many customers, ensuring the partner program is more successful than any other loyalty program type.
– Next-Gen Loyalty Engine
Planning the whole structure of the loyalty program i.e. the loyalty engine is a must. For instance, you can build a program that enables the collection of points that can be later used for discounts and offers for future purchases. Another option is to use a members-benefit program that offers special perks to only the members. Depending on your need, you must plan the structure. If you have to build a centralized customer base, perk loyalty programs are the best.
We can see that the automotive loyalty program holds great potential to transform brands to achieve true success by fostering customer loyalty. However, without strategic planning & the right expertise, your loyalty program wouldn’t be a success. Reach out to the experts that can help you guide in to understand your automotive loyalty program features and how you can build the right program for your business needs.
Novus is an all-in-one Loyalty Program Platform that enables several brands across the globe to overcome the toughest challenges faced by the automotive industry and understand their specific business needs to build custom-made loyalty programs that work exclusively for their customers. To know more, book a demo with our experts to help you discover the world of next-gen loyalty solutions with Novus.