The recent years have signaled a turning point for the automotive industry. Car manufacturers, dealerships, repair shops and even ride-sharing services find themselves in a situation where they have to introduce new, disruptive measures to not only stay ahead of the competition but also to stay afloat. Automotive loyalty programs are one such solution: though previously they weren’t seen as a good fit for this vertical, next-gen car rewards systems are now capable of driving KPIs for such companies.
Key Takeaways — TL; DR
- Automotive loyalty programs are designed to target the specific needs and challenges of the automotive industry
- Connected car technology offers many new reward opportunities
- B2B loyalty programs and partnership rewards are also gaining traction
- Learning how to incentivize data sharing through the loyalty program is critical
- We collected 8 loyalty program examples for inspiration
What Is an Automotive Loyalty Program?
Automotive loyalty programs are unique customer retention tools geared toward companies in the automotive industry, including but not limited to car manufacturers, third-party dealerships and car rental services.
Whether we’re talking about car manufacturer loyalty programs, dealership loyalty programs, or car rental loyalty programs, the overarching goal is generally to increase customer lifetime value for the company. Still different types of automotive loyalty programs can be tailored to driving the individual KPIs of a specific brand, such as boosting personalization, raising brand awareness, increasing social media presence and so on.
“As the connected car becomes more prevalent it is going to be easier for OEMs to run loyalty schemes. Adding a loyalty program that gives the customer something back will make it more likely that the customer will choose the dealership rather than a third party garage. The location-based element of the connected car also opens up more opportunities. If the OEM has an agreement with a big coffee shop brand (for example) it could drive customers to their preferred brand and continue to earn points or redeem rewards outside of the traditional relationship with an OEM.”
Account Director at Acxiom UK
Here are some examples of how an automotive loyalty program may take shape:
- Commitment-based loyalty program: in this case, members receive a discount on their vehicle purchase, but in exchange, they commit to using the company’s services and network, to installing and using any required apps, as well as activating and using connected car technology to share data.
- Membership-based loyalty program: the aim here is to nurture customers through members-exclusive content, such as exclusive offers and priority service. Anyone can join. but there are no discounts, as the goal is to make sure the brand is the first on customers’ minds when it comes to making a purchase or using a service.
- B2B loyalty program for partners: this type of automotive loyalty program provides special benefits and rewards for partners, suppliers and subcontractors rather than customers, in order to boost the performance of these companies and strengthen the relationship within the partnership network.
- Loyalty program for the auxiliary services: a coalition-based program that covers rentals, car sharing, body shops, car repairs and other supplementary services, allowing customers to earn points from one brand, and then redeem it for a reward with another.
The Biggest Customer Retention Challenges for the Automotive Industry
In order to understand what type of loyalty program features and technologies make the initial concept more complete, it’s important to understand the needs and challenges of the companies in this vertical.
The automotive industry as a whole faces low purchase frequency, which results in three major pain points:
- Lack of touchpoints with customers
- Lack of customer data
- Lack of ability to influence customer behavior
Wish to explore more options for harvesting customer data? Check out our Mission: Loyalty video for top-notch loyalty intel!
Because of the high-value purchases associated with buying an automobile or having it repaired and modified, car companies and dealerships have a limited time window to engage with their customers. This makes it difficult to collect reliable data, on vehicles, preferences, driving habits and so on, which makes personalization a challenge. Lastly, having so few touchpoints makes it difficult to educate buyers and foster brand loyalty.
Luckily, there are a number of technologies that are about to revolutionize the industry. Connected car technology, in particular, will allow more sophisticated vehicle management by subscribing to features such as intelligent parking. This not only allows for more consistent engagement with customers but it also prompts customers to use the brand’s smartphone app frequently, which in turn opens up the possibility to send push notifications.
Whether you plan to rely on dedicated smartphone apps or connected car technology, a reward system no doubt enhances the customer retention plan you have in mind by incentivizing any activity you deem useful.
“Personalisation is the real secret to achieving maximum brand loyalty. Why? Because buying a car is not like other consumer goods. The period of time between one purchase and another is very long. So by creating targeted and personalised engagement opportunities with your customers over a period of time, in-turn, you will inspire brand loyalty and drive long-term retention.”
CEO of Hachiko
The Best Loyalty Program Features to Help Your Automotive Company Stand Out
Car loyalty programs are made from a number of building blocks. If you wish to stand out and capture people’s attention, all of these elements must be implemented seamlessly. Here are some of the most relevant features for companies aiming to launch a stellar automotive loyalty program.
An Engaging Membership Page
Companies tend to overlook the importance of a visually striking, easy-to-understand “home” for the program itself. That’s a huge oversight, as the membership page is the primary point of contact people have with the rewards system. Therefore it has to look inviting and fun, plus it needs to clearly and efficiently showcase the benefits of membership. The membership page also features each member’s loyalty ID to allow for in-store identification, as well as a FAQ section that breaks down the rules.
Next-gen Loyalty Engine
The term loyalty engine refers to the whole structure of the loyalty program. For example, you can gear your membership program towards point collection, where members earn loyalty currency based on how much money they spend at your dealership, shop or store (or at a partner store if it’s a coalition program). Then the points can be redeemed for discounts and exclusive offers for future purchases.
Another option is to use a perks system where benefits are available unconditionally to all members. Depending on your choice, membership may require a proven purchase, or simply enrollment. Perk loyalty programs are best if you wish to build a centralized customer base, using the system to collect contact information to engage and educate them.
Coalition loyalty programs unite several brands under one virtual roof. In the automotive industry, this could strengthen the relationship between manufacturers, dealerships, repair or bodywork garages and even forecourts. Unlike simply integrating certain rewards from individual partners, the coalition approach allows customers to earn points at any of the locations, and spend them at another.
Loyalty programs generally follow a free model, because nothing builds a community like complimentary rewards. However, companies like Amazon can break this rule by asking for a monthly subscription fee and still be immensely successful. The key is value: if the loyalty program offers rewards that are highly desirable for members, they will be willing to pay a recurring fee. In the case of the automotive industry, such membership benefits may include priority roadside assistance, free maintenance, vehicle health alerts and so on.
One of the most alluring aspects of a car or dealership loyalty program is the variety of rewards that are available through partners. Loyalty participants can enjoy benefits like a free treat or drink at their favorite forecourt or get a large discount on car parts at a body shop. The reward catalog of a car or dealership loyalty program is all about convenience, so make sure to utilize the partnership network to its full extent.
Gamified Data Collection
One big challenge for automotive companies is the lack of personalization. To remedy the issue, consider creating a survey about people’s driving habits, vehicle preferences, financial status, likes and dislikes regarding partner services or other preferences. Then use the loyalty program to give people an incentive to complete it.
Using an advanced profiling system, you can create customer tags based on the answers to fuel your segmentation process. Or update customer profiles directly based on the answers. Either way, the data you earn will allow you to send out more relevant emails.
Connected Car Tech Rewards
In the future, smart vehicles will be managed through over-the-air tuneups, allowing drivers to manage smart functions for their vehicles on the go. During the early adoption phase, you can help introduce your audience to this technology by giving loyalty program members free trials as a reward. For instance, you can offer enhanced driving assistance for a week to new members, which they can extend by spending loyalty points.
A dedicated loyalty app (featuring a digital loyalty pass) can act as an engagement hub, drastically increasing the number of touchpoints you have. For one, the app alerts members about the latest deals, offers and news regarding the loyalty program. The app also can be used to manage services, local partner companies, redeem rewards, fill in quizzes and receive weather reports. Besides the loyalty app, consider implementing a Mobile Wallet, which stores the digital loyalty card, alongside event tickets and reward passes.
Check out our video on how a Mobile Wallet can help you stay in touch with customers.
8 Inspiring Automotive Loyalty Programs & Dealership Reward Programs
Here’s a list of real-world car loyalty programs and dealer rewards programs as inspiration.
1. Enterprise: Enterprise Plus
Founded in 1957, Enterprise is a rent-a-car service that’s available in over 8,000 locations worldwide. The company operates a customer-centric loyalty program that combines earn & burn mechanisms with a tiered system.
- Spending $1 equals 1 point, which can be used to lower the price of future car rentals (or get a free ride altogether)
- Points expire every 3rd year, which can be extended with a single eligible rental
- There are four tiers total, which require either a set number of rentals or an overall rental period
- Tiered benefits include higher point conversion rates and free car updates
Why it works
- Car rentals are more frequent than car purchases, which is why the earn & burn model still works.
- Still, in this industry, it’s highly recommended to have a multi-year expiration for points.
- Tiers are excellent ways to keep customers’ interest for longer periods of time
2. Ford Motor Company: FordPass
American multinational car company Ford has been a trailblazer in the industry since the very beginning. An innovative force, Ford has introduced an app-based loyalty program to reward loyal drivers in multiple ways.
- Customers can earn points by spending money at Ford, and redeem them for discounts at participating dealerships
- Earning 42,000 points unlocks flexible complimentary maintenance
- Using the FordPass app, drivers can request 24/7 roadside assistance
- Loyalty program members receive early access to new events
- Members can use the app to connect to and control their car, for example remotely scheduling it to start
Why it works
- Car brands should utilize their partnerships so that customers can earn points for a variety of purchases.
- Benefits like roadside assistance are highly appreciated by drivers.
- Early access has strong perceived value among customers.
3. BMW: Inside Edge
BMW UK entered the field of automotive loyalty programs because they wanted to connect directly with company card drivers. Inside Edge (a program empowered by Antavo) is a no-point, reward-only perks program, where members have instant access to all the available benefits.
- BMW car owners can enroll into the program by providing their license plate number, which is then validated by the system
- There are two types of rewards: claimable gifts, like movie experiences; and prize draws
- In order to claim certain rewards, members need to fill out a brief, 5-question survey so they can learn more about member’s driving habits and preferences
Focusing on exclusive benefits for fleet drivers, Inside Edge aims to aim a strong relationship with company car owners.
Why it works
- A perk-driven loyalty logic is very inclusive and provides instant reward experiences.
- Prize draws are thrilling reward opportunities that shake things up for members.
- Using partner rewards that aren’t tied to cars, like free coffees cater to a large variety of demographics.
4. Volvo Cars Loyalty Program
Swedish automotive company Volvo launched a rather unique loyalty program in the UAE region that provides benefits on parts and labor based on the age of the vehicle. The older the car, the better the rewards are.
- There are four “tiers” in total based on the age of the vehicle, with the milestone being at 0-2, 3, 4 and 6 years.
- Members receive up to 35% discount on parts and up to 30% discount on labor
- Other benefits include free 15 point vehicle check, mobility car discounts and free car recovery
Why it works
- Tiers are a great way to make members work for gated content, like discounts.
- Tiers based on the length of car ownership generate brand loyalty naturally.
- Morover, tiers are very useful if you wish to establish a haves and have not economy in the program.
5. Europcar: Privilege Loyalty Program
In the world of best car rental loyalty programs, Europecar’s reward system deserves a spot. The company has a hybrid-style program, with permanent perks available for everyone who joins, coupled with a tiered system for long-time engagement.
- All members are eligible for 10% off the public rate for a car or van rental of 3+ days
- After 3 rental members earn a free weekend; members are privy to priority service and a free one-car category upgrade
- Top-tier members can double the complimentary car upgrade and get a one-year Priority Pass membership for airport lounges
Why it works
- Making some rewards all-inclusive helps to boost enrollment rates.
- Benefits like free upgrades provide a lot of freedom for program members.
- Hybride-stlye loyalty programs offer the best of both worlds.
6. Nissan: One to One Rewards
Japanese auto company Nissan has dealerships all over the world, and to make the experience even more fulfilling for customers, the company launched a special loyalty program.
- Customers earn points for spending money on vehicles, parts and services.
- Buying a vehicle provides a $250 discount for the next vehicle purchase
- Enrolled members in the Nissan loyalty program are eligible for a physical loyalty card
Why it works
- In the automotive industry, large-value rewards are warranted after vehicle purchases.
- A $250 discount on the next car purchase has a strong swaying power.
- Physical cards can still represent exclusivity if they are rare.
7. Fred Beans: AutoRewards program
Fred Beans is a family-owned and operated dealership business that caters to drivers in the greater Philadelphia area. With more than 25 dealerships supplying 18 vehicle brands, the company set out to deliver additional value to customers in the form of a loyalty program.
- The program focuses heavily on discounts, as each loyalty point can be redeemed for a $2 discount (up to a total amount of $2,000)
- Benefits, such as free oil changes are unlocked upon hitting the 350, 500, 750, 1,000-point milestones
- Customers can also earn points for non-transactional activities, such as referring a friend, using the company’s loyalty app or swiping the membership card during checkout
Why it works
- For a truly impactful reward, choose something that’s used frequently, like oil changes.
- Ensuring that each tier has something desirable is key to a fulfilling progression.
- Rewarding non-transaction activities helps to keep buyers close to the brand between two purchases.
8. Subaru: Ownership Benefits
Subaru of America (the US division of the Japanese automobile manufacturer) offers all drivers a range of benefits they’re all entitled to. It’s not a dedicated ‘Subaru loyalty program’ rather than a pool of privileges, such as discounts on insurance and tech subscriptions, free lifestyle magazines, and invites to festival events.
- You have to be a legitimate Subaru owner to enjoy these perks
- You still have to apply to each benefit individually or go through the service provider’s preferred method, as there’s no unified experience
- The list of privileges changes thorough the year, giving drivers an incentive to check the page frequently
Why it works
- Limiting program membership to card drivers only ensures the exclusivity of the membership.
- Giving customers unlimited access to rewards compensates them for a lengthy enrollment or validation process.
- Changing up the reward list annually keeps the experience fresh for members.
There Are No Speed Limits on the Road to Success
Automotive loyalty programs provide so many opportunities to propel your brand towards success by fostering true customer loyalty. We are always ready to showcase our sophisticated loyalty solutions and robust API capabilities during your vendor selection process, so feel free to send us your RFP.
And don’t forget to download Antavo’s Customer Loyalty Report, an in-depth report that showcases dozens of statistics as well as future industry trends to help you navigate the world of next-gen loyalty programs.