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Top Five Reasons Loyalty Marketing is Critical (yes, even when inventory levels are low)

August 8, 2022

#1. Customer Retention

With more than 15 new OEMs coming to market and 100 new vehicle models arriving in the next five years, there is a tsunami of change coming. If you're not talking to or offering value to your loyal customers, someone else will.

Offering something valuable, not typically available to a regular walk-in, makes it more likely they’ll stick with your brand and your dealership, especially in the long term. Whether it’s a gift card or a special offer on their trade-in, loyalty marketing makes customers feel appreciated, encourages them to be faithful, and spend more in your dealership.

If you're not keeping in touch or offering value to your loyal customers, someone else will.

For some dealers today, the higher margins on new vehicle sales seem like a win, but what about tomorrow? Recent surveys indicate that in the past year, more and more customers are deciding to switch brands. If we're going to make improvements in customer retention, we need to put the focus back on loyalty marketing. Reminding your loyal customers that you appreciate them is a key ingredient to your dealership’s long-term success.

#2. Replenish Pre-owned Inventory

One of the advantages of running an effective loyalty event is that in conjunction with offering your loyal customer an incentive to respond - you can also attract them to consider selling you their current vehicle - even if they don’t buy one. We keep hearing that “used is the new, new” and it’s true! Many dealers have put an increased focus on used, and are reaping significant rewards. Encouraging a strategy to acquire vehicles for your pre-owned lot will help you fill in the gaps, provide your team with more opportunities to sell, and your customers a more diverse selection of products to buy.

#3. Generate Service Department Activity

A solid loyalty marketing strategy almost always includes the targeting of loyal service customers. Every time you interact with one, you’re extending the relationship that they have with your store. You’re able to track their vehicle history and monitor buying patterns. Personalized service reminders sent to them either by phone, email, or text keeps loyal customers engaged. Targeting and incentivizing those who may be nearing the end of their lease is also effective. Hone in on who may be considering selling or trading with you and initiate the consumer experience. Plus, any used vehicles you acquire will need attention from your Service & Parts department, which generates even more revenue for your dealership.

#4. Improve Incoming Vehicle Allocation

Wondering why your store has fewer incoming units than your competition? For some brands to increase their allocation, a reliable pre-order system (if at all possible) should be in place. A handful of OEMs are allocating models based on the store’s ability to presell, so if you’re not filling up that order bank, your dealership’s priority may be limiting the number of incoming vehicles shipped to your store.

For some brands to increase allocation, a reliable pre-order system (if at all possible) should be in place.

Encouraging, and rewarding loyal customers to make a factory order can also be an effective way to add value and create strong customer relationships. Placing a factory order is unpredictable, but as long as we communicate that clearly, manage their expectations, and reward them for their patience - we can keep the wheels moving.

#5. The Guest Experience & Appointment Culture

Whether the purchase journey begins online, over the phone, or in person, creating a memorable customer experience is important! We can forget how much of a big deal it is to purchase a car. Take a moment to ask yourself, “are we doing everything possible to make this experience easy, fun, and comfortable for the customer?” Raise the bar, go above and beyond. Consider revising how you welcome them to the dealership, or how you greet them over the phone. Take them on a tour. Introduce them to the Sales Managers. Humanize yourself before talking business. Maybe they need a drink or hit the bathroom before their test drive. It’s all in the details.

It’s much easier to sell a potential buyer on an appointment, then it is to sell them on a vehicle. So book appointments.

Create an appointment culture. Selling a car over the phone, or by email is incredibly difficult and rare. Before discussing trims, features, options, or price - increase opportunity by simply inviting the customer into the dealership first. It’s much easier to sell a potential buyer on an appointment than it is to sell them on a vehicle. Have a weekly contest with your staff, and reward them for the number of appointments they book, rather than just praise them for the deals they’ve won. If your appointment ratio goes up, so will your closing ratio. When it comes to the customer experience, before they even arrive at the store, your team has an opportunity to set the stage. When they do walk in, their initial impression will be that your staff is friendly and thoughtful and that the dealership has a positive energy about it. This is such an important step that helps loyal customers feel special and shows that you care.

Whether your focus is on customer retention, the in-store experience, or increasing sales and service activity - Loyalty Marketing can allow the journey to be more efficient, and reward you in the long run. If you need support, or if your store’s loyalty strategy could use some improvements, Shift Marketing is always here to help.

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