Five Reasons Why Customer Loyalty Programs Work

Some service departments have embarked on customer loyalty programs in the past that didn’t work and left a bad taste in everyone’s mouths, including customers. So if you mention the idea of doing a loyalty program again to those service managers, they will likely tell you to hit the road. Like jilted suitors, they had a bad experience years ago and that’s why they think that customer loyalty programs are a waste of time and money.

You know, some kid stole my milk money in kindergarten, but that doesn’t mean that I stopped drinking milk. If customer loyalty programs are designed and deployed the right way, they work well on many levels and their benefits will accumulate over time. So, if you implemented one years ago that fell on its face, maybe it’s time to turn the other cheek and try again.

More and more service departments all over the country are now utilizing customer loyalty programs more often than ever. They recognize the importance of retaining existing customers and one of the best ways to achieve it is by building genuine customer loyalty.

So, what is a customer loyalty program and how does it work? While the details of every program can differ, they are essentially marketing promotional vehicles that reward customers for purchasing things from you. The purpose of any customer loyalty program is to make the customer feel special and give them preferred deals and offers as a result. Loyalty programs can offer things such as added convenience (VIP or concierge service), store credits, prizes, car detailing, assorted swag  like hats and jackets, added services or other attractive benefits.

So, here are five reasons why we believe that loyalty programs work if executed properly:

Time-Tested and Proven Across the Board

The world’s top marketers believe in customer loyalty programs, because they have seen them work time and time again. People today are intense about the brands they buy and if they get top service, they are more apt to stick with what is working. So, once you hook a customer and work on their car at least once, a well-designed customer loyalty program can retain that client for the life of the vehicle and more.

Loyalty Programs Won’t Bust Your Bank

Customer retention is considerably easier than customer acquisition and in the end, customer loyalty rewards programs will pay for themselves. Depending on who you ask, an existing customer is 5-9 times less costly than acquiring a new one. Finding new car owners and wooing them is tough, so when you win and get a new customer for whatever reason, you need to do anything you can to keep them in the fold.

They Accumulate Vital Market Research

One of the byproducts of a customer loyalty program is that it offers you a chance to gather usable information about your customers. By trying different approaches, you’ll be able to surmise what incentives your clients want and once you determine this by studying their behavior, you’re in a prime position to keep them for many years to come.

Strengthens Customer Relationships

By implementing a well-thought-out customer loyalty program, you’re telling your present and future client base that you’re not just all about the money. For it to work, your relationship with customers has to be beneficial for both parties. A solid customer loyalty program creates goodwill and clearly illustrates that you truly care.

Set it Up and Let it Run!

After you’ve done your research and tested a few programs, most of the hard work is done. Many successful customer loyalty programs run seamlessly year after year. Once you it set up, it becomes literally a self-sustaining machine, that becomes an integral part of your annual marketing plan. Periodically updating the rewards will keep your customers engaged, but the work it takes to perform this will be overshadowed by the growth your service department experiences.