Preparing for a Market Slowdown

As national sales plateau and eventually decline, and the pond that we’re all fishing begins to go dry, your existing customers become that much more important to the overall ongoing success of your dealership.

Loyalty programs are marketing strategies designed specifically to motivate customers to keep shopping at your dealership and use your services. They not only turn consumer attention toward your local brand and spotlight what you’re doing locally, but also keep your current customers engaged with your dealership, informed about new products and services and ultimately boost revenue.

The tactics and rewards of individual loyalty programs vary, but a good program generally includes a point or tier system that allows customers to earn rewards when they use services, purchase from the dealership, or participate in events. It all adds up to one thing: more engagement in your specific local brand. I keep saying local because it is all about your local store not the broader OEM brand.

You work hard to build relationships, and it’s important to let people know how valuable they are. A good loyalty program will help you reward your best customers and strengthen new relationships in various ways.



Let’s start with the obvious. In a major industry like automotive, loyalty goes a long way for both the customer and the dealer. Your customers already know your dealership, and most want to stay loyal because they’ve done business with you and know what to expect. On the dealership’s end, loyalty comes across when you’re able to contact shoppers ahead of time with simple, subtle reminders (maybe it’s time for an oil change or a tire rotation). With tools like AlertMiner, you’ll be prompted when customers’ warranties are about to expire or when their mileage allotments are almost up—keeping them informed is an excellent service. Your pros can let shoppers know they can save money by taking advantage of your dealership’s loyalty program. This gives your customers incentive to come to you and remain loyal.

Partnership Opportunities

Maintaining a loyalty program allows your dealership to partner with other local businesses to boost income and gain customers. If your dealership understands its customer-purchasing patterns and general needs, it can be beneficial to partner with other businesses or organizations your customers frequent and support. For example, consider working out a punch-card deal at a local car wash for your customers. In return, the car wash can refer its customers to you for oil changes and other services. Partnerships help you grow your network and reach a broader customer base.

Customer Retention

This is tied to loyalty. How long do your customers stay with your dealership currently? By starting a loyalty program, your customer retention rate should increase over time as you gain more participants and offer more incentives. According to Fred Reichheld’s The Loyalty Effect, a five percent improvement in customer retention can lead to a 25-to-100-percent increase in profit for your dealership.


According to Inc., it costs a business five to 10 times more to acquire new customers than it does to sell to existing ones, and the average spending of a repeat consumer is 67 percent more than a new shopper. It’s relieving to know your most predictable source of income is already part of your dealership. Having tools like LoyaltyTrac, with it’s analyitics based customer segmentation and geo-targeting is a major bonus because they’ll do the work for you by alerting when a current customer is in market again, needs to renew a contract, or is eligible for an upgrade. This makes your sales professionals’ job easier and allows them to be more strategic and direct when offering loyalty program perks and reaching out to existing customers. Plus, you still do service on the trade-in car, and now that customer has a new vehicle that will also need service.

Staying in touch …

… with your current customers and offering a loyalty program that allows them to benefit from coming to you for all of their automotive needs is a huge positive for both your customers and the dealership financially. From a networking and customer retention perspective, loyalty programs help your dealership gain new customers, while retaining existing ones. Additionally, the customers you retain stay loyal and easily become a reliable source of income when they enter the automotive market for products or services.