Author Archives: paulhealy

So, what makes you different?

Every automotive dealer believes that they run the best operation and do everything a little better than their competition. Is this true? I have the pleasure of going to all regions of the country every week and walking into automotive stores that are new to me. I can assure you, that for most these stores, the look, feel and customer experience is the same. Fortunately for the consumer, most Dealers have done upgrades on their facilities. These range from cosmetic and operational changes to complete remodeling of their facilities. The automotive buying experience has gotten much better. But, the fact remains that all Franchise stores look the same. The only difference is the employees that work there and this is where the Dealer that wants to set the standard for customer satisfaction should look.

It is your employees that are the key to improving your profitability. Most come to you with prior experience within the Industry and established skill sets that you hope will mesh with your operation and sometimes they do and sometimes they don’t. It is up to you Mr. Dealer to give them an edge over their competition in both selling and servicing vehicles. You need a volume driver that will put more customers in front of your sales and service staff. All of you have tried direct mail and that is like a quick shot of adrenaline that fades quickly. You probably have done invitational sales and special promotions that are, at best, giving you one opportunity to sell something. Notwithstanding the fact that these programs are expensive!

So, how can you be different? What is something new that will put your operation ahead of the competition and give your employees the best opportunity to sell? Putting together a well thought-out and comprehensive retention program is the driver you need and must have. You must be willing to create a new culture within your organization and drive it from the top down. Your managers must buy-into your program or else you will never get it off the ground, therefore they should be involved in building the program. Since this is something new I recommend you find a professional company, with years of experience and proven results to partner with you in this endeavor.

Where do you start? List all the things you currently do to enhance the customer experience. Things that are often taken for granted but are an operational expense non-the-less. A few that are obvious are shuttle service, pick-up and delivery, complimentary beverages/snacks, multi point inspections and alignment checks, a vehicle wash at each service visit, quick lanes, etc. Then you build on these benefits by coming up with services your customers cannot resist, such as, complimentary oil changes and tire rotations, ding/dent repair, windshield repairs, etc. These can be for specific periods of time and capped to control the expense. All of these will cause your customer to choose your store for their vehicle purchase. Include a rewards component that will continue to drive your customer back for all the service and maintenance that are required on their vehicle. Keeping them in your service lane practically guarantees they will purchase their next vehicle from you. The final piece that must be in place is a robust communications component, via email, that keeps your customer informed about their vehicle, the services required and rewards earned and any specials that you periodically offer.

All this sounds complicated but let me assure you it is not. What is needed to make all this work seamlessly is data integration and software tools that are employee friendly. This is provided by your partner. Of course, you must do your part by establishing a new culture and getting your management staff on-board from the planning stages to implementation and ongoing training.

Roy Olive

A Viewpoint on Loyalty

You are thinking that you need a retention program to move your business model to the next plateau but you are not sure of what to expect? I have been training and installing retention programs for dealers for close to 10 years and here is what I know.

A Golden Rule in the creation of a Loyalty Program is to never start a retention program unless you are 100% committed to it. What I mean is that you are going into it with realistic expectations, you are looking at it as a long-term program and that you will work to ensure it becomes a culture in your business. When you open the doors each day it will be a priority and the way you conduct your business!

Let’s talk about the realistic expectations. There are immediate short-term gains, but you must be patient to realize the long-term success of your program. I will break down into 3 categories what you should be looking for. These categories are Sales, Service and Repeat Buyers.

Sales: Immediately, you will be offering a greater value-add to your customer in the buying experience which, if properly implemented, should result in higher front-end gross profits, added sales volume, higher CSI scores, more referrals and additional tools to make it easier to close more deals. You want to think of the benefits you offer as a “Why buy here instead of from my competition?” Most importantly, it will set you apart from your competition. They simply will not be able to compete with you on VALUE. Some common components that make up the benefits that you could offer each sales customer are Engine Guarantee, oil changes, tire rotations and car washes. These each have a high perceived value and help to overcome price objections. You couple these benefits with what you already are providing, such as Gourmet Coffee and Snacks, Children’s play area, shuttle service, pick-up and delivery service, etc. and you have just moved to a new plateau in how you value your customer. It is like the verse in the bible, Luke 6:38,and I am paraphrasing, “Give and you shall receive”.

Service: If you are like most Dealers you probably fall somewhere in the range of 30 to 40% retention currently (as measured only by NEW vehicle sales and reported by your OEM based on 2 service visits within the first year after purchase). A properly designed, value-add, retention program will double your current percentage of sales customers that are using your service department. Rewarding your customer each time he services with you gives you a great opportunity to up-sale at the next visit through “found money”. It is a more honest way of conducting business in that the customer begins to feel that you have a vested interest in taking care of them by keeping them safe and operational. Each visit is an opportunity to prepare for the next visit and set realistic expectations on what services will be needed. You can expect your absorption rate to move closer to the gold standard of 100%, an increase in the number of repair orders daily and more customer dollars spent per RO. In every case where we have conducted an audit of who spends more, we find that the customer that is a member of your retention program spends anywhere from $12 to $226 more per visit than a non-member customer. An increase in repair orders results in more labor hours and more parts being sold.

Repeat Buyers: A customer that bought from you and serviced with you during their ownership cycle will return to you for their next vehicle approximately 86% of the time vs. a customer you sold and who never serviced with you returns to repurchase less than 25% of the time. It is a reality that it is much easier to resale a vehicle that you originally sold new and serviced. You want this trade-in as it is much more valuable than an auction vehicle! The typical time this type vehicle stays on your lot is approximately 2 weeks. By installing a well thought out retention program you are guaranteeing that you will increase your % of resales and receive a highly valuable trade-in as a part of the deal. You have created a “Pre-Owned Vehicle Factory”.

Are You Branding the Wrong Message?

My career has necessitated a lot of air travel over the years. During that time, I only flew one airline, so I could get all the points and perks that go with an airline trying to make me a loyal customer, and they did.

For about 15 years, I never flew another airline. They sent me a bag tag that said I was in their million-mile club. I got free upgrades to their airport club, extra reward points, first-class seats and on and on. You would think they had retained a customer for life … but they didn’t.

In the last 12 years, I have again flown over a million miles on another airline and never used the first airline again, even though the rewards with the first airline were far greater. The reason was simple; the first airline constantly jerked you around with almost everything they offered. The “free” airport club ended up having to be paid for. The rewards points needed for a free flight would double or triple every time I wanted to use them. There were constant blackout periods every time I wanted to redeem my points. The final breaking point was when I sent four letters to the company complaining about the treatment they were giving a customer who flew over 100 flights a year and no one answered any of them.

This is a cautionary tale of what can go wrong when you want to send a message to the customer about what a great place this is to do business, but the consistency of that message is never followed through and it ends up doing more harm than good.

As we work harder and harder to keep customers from defecting, we must keep in mind that this message begins with our people. We start out with our core principles and design a program around these values. We design what we think is a great loyalty program that should grow our business year after year. We allocate funds to give teeth to our message. Then we forget to train our staff on the message. Everyone needs to get on the same page. Once our branding message is developed, it should be presented to the entire group and not only reviewed but rehearsed with the word tracks that we expect to accompany our values.

A good way to design your values is around your retention program. The benefits we design for our customers should reflect how important they are in the relationship. When we set up certain things like car washes, loaner cars, oil changes or rewards programs, we are telling the customer how much we appreciate their business. However, it is critical that at the same time, this message is developed the same way and delivered the same way, every day. If we are offering a rewards card but no one talks about it or helps the customer redeem their points, what good is it? If a core value is to treat our customers with respect and we don’t even have time to say thank you, what message are we sending?

If we have taken the time to design a program to help retain the customers then we need to go the extra step to design a method to train and supervise what we want the customer to hear. There should be monthly training classes (both group and individual) for everyone who interacts with the customer. We should solicit ideas from everyone on how to improve the program. In these meetings, review the surveys and see what customers think about their experience. Get input on what tools we need to develop the message. For example, websites, apps, digital marketing are all things we can use to get our benefits in front of the customer. We can’t communicate enough with the customer nor for that matter listen enough.

I spend about $75,000 per year flying on business. In the last 12 years, the original airline I flew lost almost a million dollars of my business. Not because they didn’t take the time to design a great program but the implementation of that program and their method of communicating it was terribly flawed. The same thing can happen in almost any business if we don’t take the time to train and develop everyone to do the same thing every day, every time, without fail, no exceptions.

-Jack Garrity

Who is Branding Your Message?

Often, a business that is part of a franchise will have trouble carving out its own niche. Usually it is the company selling the franchise that is responsible for developing the branding message for all the franchisees. The automobile industry might be the exception to the rule.

The manufacturers do try to brand their products with slogans and marketing. For example, “It doesn’t just raise the bar; it is the bar,” “Let’s go places” and “The power of dreams,” to name a few. However, unlike most franchises, car dealers do more to separate themselves from the pack than almost any other business. It is not unusual for a dealership to not only promote their business, but to compete directly with the other franchisees.

Branding has been around for a long time. According to Google, the modern word “brand” is derived from the word “brandr,” a word from the Ancient Norse meaning to burn. By the late 1500s the meaning had changed to refer to a mark burned on cattle to show ownership. After reading that, it made sense to me that our current method of branding is a way to burn our core values into our customers’ minds.

Some companies are so successful at branding their message that their name can denote an entire industry. Go Xerox, Amazon Prime and I’ll have a Coke, are examples. Others use branding to control a complete segment of a certain market, electric cars – Tesla; guaranteed low prices – Walmart; taste great, less filling – Miller Lite.

When it comes to branding your automobile business, the job becomes somewhat more unique. Most dealers would love to brand themselves different than any other dealer in their market place, but where do you start? Lowest prices in town, biggest inventory, relentless advertising are all methods that have been tried in the past. But to really brand yourself, you need to start with your core values. What is important to you, and more importantly, what is important to your customer?

It’s critical to start by developing those core values and letting everyone in your organization know exactly what they are. You need to hold everyone accountable for how these core values are presented to the customer. How do you want your business to be perceived, by not only your customers, but also your employees? Build your business around those values. While the factory is branding their core values, you need to develop yours — and they will not always be the same.

Often, it will not be about price or advertising, but the customer’s ability to experience what makes you different. If the core value is about branding you as the dealer who spends his marketing dollar on the customer and not crazy TV ads, that message will resonate with not only your customer but also your entire staff.

The ability to develop your message can only come from you. Factory programs are great for branding the manufacturer’s product, but your message needs to be developed by you. What are you doing to give a customer a reason to buy here and service here? It does little good to spend your entire budget to get someone to buy something if you don’t give them a reason to come back for service and their next purchase.

I have a friend with a Hyundai store in Pennsylvania. He spends very little on advertising and yet he has increased sales tenfold since he bought the store almost 10 years ago. His core value is the money he would spend on advertising he is giving back to his customers in the form of a lifetime engine guarantee, lifetime oil changes and lifetime tire rotations.

He trains his people to sell the value and benefits of buying from their store. His branding philosophy is the same message, every day by everyone to every customer. The customers have bought into the message as well. His retention rates are in the high 70-percent range for both new and used cars. He calculates that he spends $68 per customer to retain them. This is not in addition to, but is the money he would spend to create a new customer. It works.

There are different ways to brand your business. Your main concern should be not letting someone else (the factory) brand it for you. Factory branding programs are designed for a broad demographic and must be so general that they don’t work for everyone. A program that develops your message around your program will have much greater results for your dealership and everyone working with you.

-Jack Garrity

Rethinking Rewards Cards

A friend of mine, who happens to an ex-service manager, sent me a cute cartoon the other day. There are two guys trying to pull a big wheelbarrow that was filled with parts and had square wheels on it. The salesman comes in with two round wheels and says, “Hey, can I show you something?” They both turn to the salesman and say, “Can’t you see how busy we are? Come back another time.” For some odd reason, this reminded me of how hard it has been for service departments to see the benefits of a rewards card for the service drive.

Frederick Reichheld documented in his book Quality Comes to Service, the following, “a company’s most loyal customers are also its most profitable. With each additional year of a relationship, the customer becomes less costly to serve. Over time, as the loyalty cycle plays out, loyal customers even become business builders: buying more, paying premium prices and bringing in new customers through referrals.”

Many managers think rewards programs are cheap promotional tricks, short-term fads or just a big giveaway. If you’re looking at your rewards program as a cost rather than a profit center, you’re doing it wrong. A loyalty program has to be a managed strategy. You must motivate the customer to engage in the rewards program.

Some stores have factory programs that are mandated to be given to each customer. This is better than nothing but not much. You can have all of the support the factory can give you, but if you’re not engaged why should your customer be?

Many don’t remember, but the first rewards program was S&H Green Stamps, which started back in the late 1800s. The stamps could be collected into booklets, which could then be redeemed for rewards ordered from S&H catalogs.

These days, rewards programs are so universally accepted that you rarely find any major business that does not offer some form of compensation back to their customer to try and retain their business.

The problem in most businesses when it comes to offering a rewards program centers on the fact that they are only as good as the design of the program. Have you ever gone into a store and the clerk said, “Just take this receipt home and enter it online to receive your reward”? Or how about, “We mail you coupons based on how much you spend” or “I’m sorry your points will expire in 30 days if you don’t use them”? Keep in mind when you’re designing your program, the more you can engage the customer, the more effective the retention will be.

When we are looking to create a rewards program for the service drive there are a few things we should keep in mind. First and foremost, there is nothing wrong with failure. I won’t get into the famous Teddy Roosevelt quote, but often we resist starting something because if it doesn’t work, we’ll get in trouble. It’s better to just keep doing things the same old way and keep the boat rocking to a minimum.

Starting a great branding program or loyalty program for your service department won’t necessarily be a walk in the park. There will be mistakes and starts and stops. However, if you make this message the central part of how you are doing your business going forward, gradually the rewards will start compounding.

Secondly, make sure you put a process in place so your message is going out the same way, every time to every customer. Have your program integrated to keep the customer engaged. The customer rewards card should tie into a customer website, which ties into a customer app, which ties into all of your digital marketing. You’re not only creating a loyal customer but you have branded yourself as someone who cares about their needs and their business.

I know we are all busy with our daily duties, but like the two guys with the square wheels, there are better ways to grow our business then the old “treat them right and they will come back” approach. Rewards cards are the best way to lay a foundation to grow your business year after year. They can enhance your service drive and create customers for life.

Instead of looking at rewards cards as just more work, put yourself in the customer’s shoes. Get creative, drive more business, the sky is the limit if you become as engaged in the program as you want your customer to be.

-Jack Garrity

Understanding Rewards

In the Feb. 12, 2018, issue of USA Today, there was an article about how people respond to rewards. It covered a lot of ground, but the main thing I took away from it was that if people felt engaged in an activity they reacted in a much more positive way. The article was written by Jeff Stibel, who happens to be a brain scientist. Far be it from me to put an old car guy in the same paragraph as a brain scientist, but it did get me thinking about how little people understand about the concept of rewards to the retail customer. Stibel said, among other things, that rewards were “psychological tricks.” He also stated that “…paradoxically, people will pay more money and perceive a higher value if they have to do something to ‘earn’ a product or service.”

So, I wanted to apply some of this thinking to the car business and see how rewards shake out. First off, a “psychological trick”? As it pertains to his study, it was probably true but is that really how rewards work? Customers will see right through a bogus program. Many retail rewards programs aren’t very strong. A solid rewards program is not trying to trick the customer into doing business but thank them for their business in a meaningful way. Secondly, I couldn’t agree more that people perceive a higher value in a reward if they have to do something to earn it.

Coupons are a classic example of how this works. If you use coupons to drive your service business, there is really no customer involvement. Let’s say you charge $49.95 for an oil change and a tire rotation. You send out a coupon for $9.95 oil change to drive some traffic to your service drive. First off, you lost $40 on the coupon. Secondly, I guarantee that 80 percent of the customers are coming in just for the coupon. This will bring no extra business and you will probably never see them again. They didn’t earn it, so it is not very rewarding.

Now, let’s look at it from the rewards side. Same scenario, but instead of a coupon, the customer gets $40 in rewards points. Now the customer did something to earn it. He came in, spent $49.95 for the oil change and, in return, he received reward points he can use later. He earned them. An added benefit is the service department gets two visits instead of one.

Reward programs seem firmly rooted in the hotel and airline business but not very well received in the auto industry. I had lunch with a service manager recently and we were discussing reward cards for the service drive. He said he didn’t need them because he already had the customer in his service drive. Why should he send money if they are already here? I pointed out that I had used the same service department for all of my service work for the last four years and when I needed tires, I went back there to spend the $118 in rewards that I had earned during those last four years on a new set of tires. I also explained it was the first set of tires I had ever purchased at a car dealership and not a discount tire center. He said, “Well, maybe in some cases….” This perception is prevalent in the auto industry.

In another case, a dealer with a large chain of stores dropped his rewards program. He said he had more than $5 million in rewards points out on the street. He asked me what would happen if everyone redeems them at the same time? I think his exact words were, “If that happens, I’ll go broke.” Once again, this is a classic case of someone not grasping the concept of rewards. I explained to him his customers were redeeming points at less than 3 percent per year for the last four years, and I asked him how much service had he received off his program if the $5 million in points represented just 5 percent of all the service business he had written during that time.

People tend to have many different notions of what rewards are and how they work. In his article, Stibel said that “shopper rewards programs aren’t rewards at all.” Many in the auto industry look on them as just an unneeded expense. Used properly, however, they are a tremendous asset to any retail business. It is one of the key ways to keep your customer engaged in your business — and coming back — for a long time.

What’s Apping?

Apps have been around for a long time now. The App Store came about in 2008 offering 50 apps and within the first weekend they were downloaded 10 million times. Android and Blackberry soon followed with their own versions. By 2011 there were 100,000 applications for the iPhone alone.

Applications have become an everyday part of life, from checking the weather and the ball scores to writing an article for AutoSuccess magazine and getting a little background data. I’m sure hardly a day goes by without you checking your phone for some type of information that just 10 years ago might have taken you hours or days to find out.

Unfortunately, apps have been slow to come to the automotive business. Many dealers spent a lot of money developing mobile apps for their business that were nothing more than a mobile version of their website. Sure, it had the inventory and the sales hours. It might even have had a section on “meet our staff.” Throw in an end of the month sale and a service coupon or two and there you have it. Regrettably, for the customer it produced a collective yawn. Most dealers over time lost interest in this form of communication. Now when you bring up developing an app, there is very little interest.

Well, I think it’s time we revisit automotive apps. What the customer is looking for is not another sales pitch but something that affects their life and makes owning a vehicle easier and more cost effective. A customer who just purchased a car doesn’t care that you have 0 percent financing, but he might want to be notified when his first oil change is due. In my opinion, your focus when using this type of tool with your customer should be concentrated on the service drive and, if possible, directed toward their vehicle.

Here are a few examples that make using a mobile app much more customer centric. Let’s start with a rewards card. Most dealers today offer some type of service rewards card to their customer, if they don’t, they are probably wondering why their business is falling off. Let the customer use your app to redeem and track their points. When they pull into service, they just open the app, show the service writer the points and redeem them. Simple and easy but also very convenient for the customer.

How about coupons? Dealers spend thousands of dollars a year sending out mailers with service coupons. Why not send the coupon directly to the customer’s phone? When they come in for service, they just open your app and show the coupon. Have a “redeem” button on the coupon that the service writer uses, and the coupon is gone. Quick, easy and cost effective.

Do you do have a pickup and delivery service for your service department? If so, why not set up a valet service on the app? Your customer can chose their day and time and not have to take two hours out of the work day to sit in your waiting area every time they need any work done on their car. Your service manager will love it as well because it will be easier to schedule the service and he won’t have someone coming into his office every hour wanting to know if their car is ready.

Another great feature could be to include the customer’s service history on the app. How many times has the customer ask when did they buy their tires or wiper blades? Every service they have ever had done on their vehicle could be right on their phone. Using this service history, we could set up the mobile app to send out notifications for oil changes, 30K’s and to track just about any future service their car might need.

Hopefully, you’re starting to get the picture of what a successful app should look like. There are a thousand other features you can add to an app that will make the customer’s life easier. Some other great ideas I’ve seen on apps are geo fencing, where did I park my car?, closest gas station, social media posts from the dealership and QR scanners. I’ve have even seen a customer app that tracks a subscription marketing program for the service drive.

Mobile apps are about the customer. This is a great communication tool between the customer and the service department. Just as we check our other apps every morning for phone calls, texts and the weather, you need to design your service app to be exciting, informative and functional so your customers look at you as their dealership for life.

-Jack Garrity

It’s All About The Customer

I’m reading a book called the Everything Store. It’s about how Amazon started and I recommend it highly. The idea behind the Everything Store was to develop an e commerce business that would sell everything, and they did. My main take away from the book was not how great Amazon is as a company although I think that question was answered years ago, it was the underlying concern of developing for the customer, what they needed at any cost. The old adage, the customer is always right, came to mind often. Many of the programs they developed started with: “What does the customer need?” and “How do we develop it?”.

This got me thinking about some of the meetings I had last week with three service managers. The first one was with a service manager who didn’t want to do prepaid maintenance. The F&I department wanted it, the General Manager wanted it, and the F&I manager said they had customers requesting it. The service manager said, I don’t want it and I don’t need it. Good example of the tail wagging the dog.

The second meeting was with a large group who had developed an app for their customers and it had totally flopped. The main problem they said was no one signed up for it and no one used it if they did. After a few questions it became apparent that the reason it wasn’t what they had hoped it would be was because it was designed to promote things the dealership was interested in and not anything the customer was interested in.

The third meeting was with a service manager who had a customer first attitude. He had developed a great rewards program to thank every customer who used his service drive. His retention numbers were some of the highest in the zone. He was constantly surveying his customers to see what their needs were and developed programs to cater to those needs. His latest resource was a customer app for every customer in his data base. It offered a history of their car, any recall notices on the vehicle, how many points they had on their rewards card, every coupon and every special that was available to them. The app could remind them when they needed a service like an oil change or 30K checkup. He had even gone so far as to add a valet service so if the customer didn’t have time for a service visit they could use their app to have the car picked up and delivered back to them. He wasn’t done there, he was working on a way the customer could redeem their points off the app and actually pay for their service using their app.

To say which meeting I was the most excited about would be too obvious. Customers have longed been overlooked by many businesses. The brick and mortar companies for too long took their customers for granted. As e commerce continues to develop, the old attitude of, I’m not doing that I can’t make any money on it, will no longer be the right answer.

The factory seems much more in tuned to what the customer wants. They are trying to develop rewards programs, subscription marketing, CSI to improve the facilities and customer surveys. However, we can’t depend on the factory to do our job. E commerce is moving too fast. It’s not always just about price. How much do you think free delivery cost for each order? Or and unlimited return policy? Ask a customer if he would rather buy something on Amazon Prime or purchase something in your service department? We need to create the same type of environment in our stores that wows the customer every time they come to do business with us. We need to constantly be working on our branding message. What separates us from the pack? Forever and ever we heard that the customer is always right. We have heard it so many times that it’s become just lip service to many.

Develop programs based around the customer. So many times we ask ourselves how much money can I make on this or on that. When we should be putting ourselves in the customer’s shoes and looking at how we do business through their eyes. Toy r Us, Kodak, Sears, and hundreds of other companies couldn’t figure out how to make their customers remain loyal. Go above and beyond his expectations is a good place to start.

Factory Rewards Programs Versus Dealer-Owned Rewards Programs

Customers like to be rewarded and the more you reward them, the more loyal they become.

One of the OEMs has an new loyalty program in which their dealers will soon need to decide whether or not to sign up for it. I commend the OEM for recognizing how important it is to design this program for their dealers. Their reason for starting it was to “incentivize customers to spend more money, more frequently.”

A friend of mine asked me to look at the program and compare it to the dealer-owned program he is currently using. Here’s how they stack up.

How easy is it to join?
OEM: Every customer is not automatically enrolled. They have to sign up and join the program.

Dealer Owned: Every customer (new and used) is enrolled in the program as soon as they buy a car or come in for a service visit.

Is there a cost to the program?
OEM: Yes, some dealers will pay $1,000 a year, and all will pay 2 percent of every repair order of a member. This money will be used toward the rewards points and the OEM will match at 1 percent. After five years the points will expire, and the dealer will not participate in the reserve.

Dealer Owned: The dealer decides how much he wants his points to be worth, and how much he wants to spend to administer the program. The two biggest differences seem to be the money for the points reserved stays in house and all of the reserve belongs to the dealer.

How do members earn points?
OEM: Customers can earn points in a variety of ways. Enrollment, CPO purchase, vehicle purchase, customer pay service and the in-vehicle safety and security service, to name a few. They earn a different voucher for each component.

Dealer Owned: The dealer designs how he wants the points to be used, when he wants them to expire and how to combine them to be the most effective.

How do members redeem points?
OEM: The member has to download a voucher, which has an expiration date on it, bring it to the service drive, present it to the service writer, who then looks it up and redeems it. This voucher then needs to be submitted to the OEM for redemption before it expires. If it expires, the dealer has to pay for the points again.

Dealer Owned: The customer comes in, redeems his points on his app in front of the service writer.

Can I customize the program?
OEM: No, dealer-specific enhancements are not available at launch.

Dealer Owned: Yes, the rewards program can be tied into your digital marketing and your app with the intent to drive customer behavior. You can also enhance the program by adding other features like prepaid maintenance or bundling products to the rewards card.

Is Training Offered?
OEM: Training will be available only on a special website.

Dealer Owned: In-house monthly training for all service and sales staff.

So, as I see the breakdown, there are benefits to both. The good thing is the customer will win in the end no matter which program you use.

One word of caution, if you decide to go with a factory program, since the dealer does not participate in the reserve, you might want to ask an administrator to keep track of the points you are giving out to your customers. The breakdown is two to one, dealer cost versus the OEM. You need to make sure your customers are redeeming at least 66 percent of their points or you will be losing some serious money.

In the pilot program, only 20-some percent of the points were redeemed. Another benefit of having an independent administrator overlooking your program is, unlike a dealer-owned program, every dealer in town will have the same rewards program. You can greatly enhance your branding opportunity by not only tracking point usage but also adding other features to your factory rewards card to separate you from the pack. The cost to administer this is a fraction of what the benefits will be.

Creating loyalty to your business is not always easy. As you can see, there are a variety of ways to accomplish it. One person wants to have their own branding message and control over that message. The other person wants a more traditional footprint in their marketplace. The important thing is, we are now building our business on repeat customers who appreciate our service.

– Jack Garrity

Understanding Rewards

Jack Garrity