Drive Customers & Profits: Auto Shop Loyalty Programs

It is common to hear marketing experts telling auto shop owners to promote loyalty programs. And the truth is that it can work to drive customers and improve their satisfaction. But how do they work? Are all of them good for auto shops? And if I don't have a marketing budget, can I start a loyalty program? Well, in this article, we'll explain why loyalty programs could increase customers. Besides, we'll provide useful tips to start your own program in your auto shop.

What is the importance of the loyalty programs for auto shops?

One of the most effective ways to increase customer retention is to offer a loyalty program. In fact, it is a marketing tool that rewards customers for their repeat purchases and referrals. Loyalty programs can help you create a customer base that will spend more, visit more often, and spread the word about your business. That's why they are important for auto shops.

In fact, loyalty programs are not just a nice-to-have feature for auto shops. They are a necessity if you want to survive and thrive in the automotive industry.

Here are some of the main benefits of having a loyalty program for your auto shop:

Increase customer retention

According to research, it costs five times more to get a new customer than to keep an existing one. A loyalty program could reduce customer churn and increase repeat purchases. To show it in numbers, 79% of consumers look for deals in reward programs before buying. And 75% of buyers say they are more likely to make another purchase after receiving an incentive.

Improve the customer lifetime value (CLV)

Customer lifetime value is the total amount of money a customer spends in your shop over time. The higher the CLV, the more profitable your customer is. Loyalty programs can increase CLV by encouraging customers to visit your shop more often, spend more per visit, and stay with you longer. It creates an emotional connection with your customers.

Increase customer referrals

There is no better advertisement than word-of-mouth. It is one of the most powerful ways to attract new customers to your auto shop. A loyalty program could generate more referrals by incentivizing customers to speak about your shop. In fact, you can offer rewards such as cash back, gift cards, or free services for every referral that leads to a new customer. This can help you expand your customer base and increase your brand awareness.

What are the types of loyalty programs for auto shops?

There are many types of loyalty programs that you can offer for your auto shop. Actually, it depends on your goals, budget, and target audience. Here are some of the most common types of loyalty programs for auto shops:

Punch card

A punch card is a simple and low-cost way to reward customers for their repeat purchases. You can give customers a card that gets punched or stamped every time they buy a service from your shop. After a certain number of punches or stamps, they can get a free or discounted service. For example, you can offer one free oil change for every 10 oil changes purchased.

Points-based

This is a more flexible loyalty program. The reason is simple: it is a customizable way to reward customers for their purchases and actions. In fact, you can give customers points they accumulate and redeem. The rewards could be discounts, free services, or gift cards.

Moreover, you control the number of points earned based on different factors. For example, the amount of money, frequency of services, type of service, or referrals. You can give 10 points for every $100 spent, 20 points for every referral, or 50 points for every five-star review.

Tiered

A tiered program is a way to segment your customers based on their spending level or loyalty status.

For example, you can set different tiers or levels that offer different benefits. This will create a sense of exclusivity and prestige for your loyal customers. In fact, this motivates them to spend more and move up the tiers. A way to work with tiers could be through a level program. And you'll offer different perks based on each level.

Subscription-based

This program is a way to charge customers a recurring fee in exchange for access to exclusive services. This can create a steady and predictable revenue stream for your business. In fact, you can set up different subscription plans that cater to different customer needs. Thus, create plans such as Basic, Standard, and Premium and offer different benefits such as unlimited oil changes, tire rotations, or roadside help.

Coalition

A coalition program is a way to partner with other businesses that offer complementary services to your customers. This program will expand your customer base, increase your brand exposure, and offer more value to your customers.

It works when you share customer data, rewards, or discounts with your partner businesses and create a network of loyalty. For instance, you could partner with gas stations, car washes, or insurance companies and offer cross-promotions or joint rewards.

Successful case

At this point in the blog, you should be thinking, Are they worth it? Well, one successful case of an auto shop loyalty program is the FordPass program by Ford Motor Company.

FordPass is a mobile app that allows customers to access various features and benefits related to their Ford vehicles.

In fact, Ford customers can earn points for every service they get at a participating Ford dealership. Customers use them for discounts on future services, parts, or accessories. Besides, they access other features such as remote start, lock, unlock, vehicle health alerts, fuel level, oil life, tire pressure, parking location, roadside help, and more.

Implementing a loyalty program in your auto shop

Now that you know some of the most useful loyalty programs for auto shops, let's dive into some steps to start your loyalty program.

Image from AutoLeap: https://autoleap.com/blog/start-auto-repair-loyalty-program/

Define your goals

Before you launch your loyalty program, you need to have a clear idea of what you want to achieve with it. What are the main objectives of your loyalty program? How will you measure its success? How will it align with your business strategy? Think about these questions before choosing the loyalty program.

Know your customers

To create a loyalty program that appeals to your customers, you need to understand who they are, what they want, and what motivates them. Use various methods to collect customer data, such as surveys, interviews, focus groups, or analytics.

Also segment your customers based on different criteria, such as demographics, behavior, preferences, or services. This can help you tailor your loyalty program to different customer segments. Besides offering personalized rewards and experiences,.

Choose your type

Based on your goals and customer insights, you can choose the type of loyalty program that best suits your business. Work with one of the types mentioned above, or create a hybrid or unique program that combines different elements. Also consider the costs and benefits of each type of program and how easy or difficult it will be to manage and maintain.

Choose your rewards

The rewards you offer in your loyalty program are the main attraction for your customers. Choose rewards that are valuable, relevant, and attainable for your customers. Also, calculate the costs and margins of each reward and how they will affect your profitability. Use different types of rewards, such as discounts, free services, points, gift cards, cash back, or partner rewards.

Choose your format

The format of your loyalty program is how you communicate and deliver your rewards to your customers. Set up a format that is convenient, accessible, and engaging for your customers. In fact, there are different formats, such as punch cards, plastic cards, and keychain tags.

To sum up, auto shop loyalty programs are a great way to drive customers and profits for your business. They can help you keep existing customers, attract new ones, and increase your revenue. If you want to start or improve your own auto shop loyalty program, contact us today. We'll help you design a customized solution that suits your needs and goals.