Strike Gold with Effective Loyalty Programs

Think about it – almost every time you go shopping you’re asked if you’d like to join the “Insert Store Name” Rewards Program. Sometimes you say yes…sometimes you say no. But why do so many places offer these types of memberships? Because they work when implemented correctly.

Many retailers admit that they offer rewards programs solely because their competitors offer them. Some have no idea if their programs even promote loyalty or result in higher sales. What is known, however, is that customers don’t necessarily need to see cash rewards to be happy; what they want is to feel valued for giving you their business. 

Our economy has created an environment where competition for your customer’s dollar has never been more intense. Your customers can search the internet for better prices and deals at a moment’s notice, so it is imperative that you find ways to distinguish your company from the pack. Developing a strong customer loyalty program can help immensely to increase your customer retention rate. In the book “The Loyalty Effect” by Fred Reichheld, he shows how a meager five percent increase in customer retention can lead to a 25-100% increase in profit for your company. That sounds pretty good, right? Let’s examine a few programs that you can create that will help propel your business to the next level.

1. E-mail Opt-In:
Built into AutoBiz is a powerful and free marketing tool: Email. AutoBiz allows you to do more than just send invoices and quotes to customers. Emails can be generated based on specific purchases made in your shop, or to inform your customers of current specials. For example, it is very easy to set up the system to send your customers a courteous email reminder after getting an oil change to remind them that it may be time for another oil change. You could even offer a discount for your customers if they bring in the printed email when they come in for a particular service. There are many more ways you can utilize these features. Please call the AutoBiz Software support staff for more information.

2. Simple Punch Cards:
Everyone has shopped at an establishment that will give you a “Frequent Customer” card that offers either special offers or a free reward when all of the punches have been completed. Your business could design a simple card that offers discounts on any of the services that you provide. These can be based around seasonal services (such as wiper blade replacement or cooling system flush), standard maintenance (such as Free tire rotation) or manufacturer recommended services. Alternatively, a punch-card system could be implemented where each hole-punch represents a service rendered (such as an oil change), and when the card gets full the customer can redeem it for a free service. A recent study on human behavior showed that when offering a customer a punch card, a “Buy 4, Get One Free” offer was actually less effective than a “Buy 5, Get One Free” where the shop a gave the customer an extra punch to get started. The offers were the same, but psychologically, customers felt they were a step ahead when given the extra punch and customer loyalty went up 82% for this offer alone!

3. Social Networking Check-Ins and Reviews:
Does your Tire or Service shop have a presence on Facebook, Yelp or Foursquare?  These social networking sites can give you additional ways to get the word out to your customers that you have specials or sales. If a customer were to get $5.00 off an oil change if they “liked” or “checked in” to your location, it could help drive business your way. Every time someone initiates one of these actions, all of their friends that belong to the same social networking site can see that they are at your business, letting others know that your business is the place to be. Yelp in particular can be beneficial if someone is looking for a reputable repair shop, and because of your proactive approach you will have received many favorable reviews. 

4. Points Programs:
Many auto shops are using a simple points program to give customers rewards based on money spent on products and services. In most cases, one dollar equals one point, and a customer is given a list of products or services that they can trade in their accumulated points for. Surprisingly, the greatest success that shops report having with this type of program is when they offer rewards that the customer wouldn’t purchase for themselves. Many auto shops are located near other local businesses in the same building or in close proximity and trade services with one another. Doing this type of trading can reduce the cost of implementing the program and also offer a greater variety of rewards. Some of the more popular rewards offered were limo service, spa treatments and dinner for two at a local restaurant. When a customer can see their points accumulate and know that they are approaching a reward that they want, they are more likely to add additional work to be done on their vehicle to reach that reward. And by simply creating a note with the date that they started the program (in the Customer Entry area of AutoBiz), a report can be generated at any time showing how many dollars they’ve spent in your shop since being enrolled, giving them goals to reach for by spending money in your shop.

Any way you look at it, we are all searching for ways to improve our bottom lines. By utilizing email and other simple tools to develop customer rewards programs, you’ll build customer loyalty that will result in the growth of your business.

Adam Irby