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Crafting a successful loyalty program in the automotive industry presents a formidable challenge. This endeavor is further complicated by the infrequent contact customers have with the industry, and the inherent conflicts of interest between individual dealers and the automotive manufacturers.
Furthermore, fostering B2C customer loyalty from purchasing new cars proves far from straightforward, often transcending mere brand loyalty. Customers' decisions to switch car brands are driven by diverse factors, such as economic considerations, emerging technologies, vehicle aesthetics, utility, ecological aspects, and more.
Hence, a multitude of variables influence customer purchasing choices within this industry, reinforced by a plethora of marketing initiatives capable of influencing these decisions, even in the eleventh hour.
In the fierce competition for customers, an increasing array of elements is deployed, contributing to the complex landscape of decision-making factors. Nonetheless, it is prudent to consider one particularly potent factor—the implementation of a customer loyalty program. Such a program possesses the potential to tip the scales in favor of a particular brand, ultimately leading to the acquisition of a vehicle from the brand it supports.
Irrespective of whether we are discussing loyalty programs tailored for car manufacturers, their dealers, and service centers, leasing or rental companies, tire manufacturers, or suppliers of oil and tools for service centers, the ultimate objective remains consistent: enhancing the long-term value of customers, spanning both B2B and B2C realms. The paramount considerations include:
The automotive market experienced a significant slowdown during the pandemic, with approximately 80 million new cars sold globally last year. This data underscores the enduring value of the market, despite the pandemic's impact, and the projections for 2023 are even more promising. Consequently, every automotive company is actively seeking to capture as many customers as possible who are in the market for a vehicle. Below, you will find the list of the top 10 best-selling cars worldwide in 2022:
It's essential to underscore that the automotive market has been undergoing rapid transformation in recent years, which is primarily driven by the increasing significance of ecological concerns, both for individual consumers and global sustainability efforts. Major car companies are acutely aware of their environmental impact and are actively working towards achieving carbon neutrality by 2050.Â
The market has witnessed the introduction of a myriad of new technologies aimed at enhancing safety, travel comfort, and efficiency, while simultaneously reducing emissions from conventional engines. Additionally, the growing availability of electric and even hydrogen-powered vehicles provides customers with a diverse range of options to choose from, aligning with their specific needs and preferences.
Despite the introduction of convenient solutions in both financing options and automotive services, the automotive industry faces the challenge of low purchase frequency. This issue results in a lack of sufficient "contact points" with customers and subsequently limits the acquisition of valuable customer data, which, in turn, hinders the ability to influence customer behavior effectively.
To combat this challenge, automotive companies are turning to dedicated smartphone applications designed to simplify vehicle usage and access support services for drivers. These apps also serve as a means to gather valuable customer data, including behavioral information. The adoption of such apps can notably boost the number of customers opting for authorized service centers, even those with vehicles beyond their warranty period. This approach holds promise for the industry.
Furthermore, retaining customers who choose authorized car service centers can be a formidable task due to the intense competition posed by these non-authorized workshops. Many of these alternative workshops specialize in repairing specific vehicle brands, making them a compelling choice for car owners.
Purchasing a car hasn’t changed much in the past few years, and in most cases, potential clients still visit stationary car salons operated by dealers. However, these car dealers tend to be strongly supported by IT tools and, of course, strong marketing techniques, which are implemented by the company's headquarters.
While a new vehicle purchase is a relatively rare event in the B2C market, customer loyalty to automotive brands is still an important factor. This is because loyal customers are more likely to repurchase a vehicle from the same brand, which can lead to increased sales and profitability for automotive companies.
A recent study by J.D. Power found that Toyota had the highest customer loyalty rate among mass market car brands in the United States in 2022, followed by Subaru and Ford in the truck category. These brands are all known for their high-quality vehicles and excellent customer service.
Automotive companies can improve customer loyalty by focusing on providing high-quality vehicles, excellent customer service, and competitive pricing. By doing so, they can create a loyal customer base that will continue to purchase their products and services for years to come
Highest ranking brands in terms of customer loyalty:
Automotive corporations, independent service groups, and individual car dealers recognize the necessity of acquiring and subsequently cultivating relationships with customers, be they individual consumers or businesses. Building loyalty is often executed through conventional means, such as warranties and their extensions (for an additional fee), various financial services like loans, leasing, and rentals, as well as consistent discounts on vehicle purchases and servicing, tailored to fleet size or purchase value, and discounts for loyal B2C customers. However, it becomes evident that these efforts alone may not suffice, given the competitive landscape, which compels additional actions to stand out in the market.
Car loyalty programs serve as prime examples of such highly effective strategies. They can take the form of smaller, more personalized initiatives or broader, global undertakings involving numerous partners collaborating with vehicle manufacturers, such as tire producers, fuel companies, and insurers (both auto-related and otherwise). These programs naturally extend to both B2C and B2B domains, including specialized B2B actions aimed at fostering loyalty between vehicle service centers and oil or tire brands.
Establishing and maintaining regular and meaningful contact with customers is crucial. This is achieved by offering well-thought-out promotions tailored to their expectations and needs, thus building trust and loyalty. To implement such strategies, it's imperative for customers to provide their contact information, a task for which a dedicated loyalty program application (or a brand-specific app) serves as the ideal tool.
Continuity of customer engagement is vital, with points (or other rewards) accruing for future purchases. This approach serves the dual purpose of providing customers with a financial incentive to return and creating a value proposition significant enough for them to remember.
A customer must not be disappointed, as maintaining a strong connection significantly enhances the likelihood of repeat vehicle purchases from the same brand, be it new or used. This bond also extends to retaining their vehicle's servicing at authorized service centers and cross-selling even high-margin services and products. In such instances, dedicating a portion of the high margin to reinforce loyalty (e.g., double points for exceptional customers) pays off in the future. The customer not only returns for repeat purchases but also accumulates points for their next visit. This action ensures that the customer always holds value, encouraging their return to the brand.
Ideally, the brand-customer relationship transforms the customer into an inadvertent brand ambassador. A satisfied customer willingly recommends the brand to their acquaintances, sharing their positive experiences.
However, individual car dealerships may not possess the capacity to independently develop, launch, and effectively manage a loyalty program. It would be more suitable for such a rewards program to be organized centrally, as it can better align with the brand's objectives and provide a consistent offering nationwide. Furthermore, a centrally organized rewards program can undoubtedly receive more effective promotion and reach a significantly larger customer base. It's worth noting that when such a program is executed in collaboration with non-competing brands, such as fuel companies, tire manufacturers, banks, or insurers, it can become a potent tool in the battle for customers. Leveraging the business synergies of all participating companies, this approach facilitates the rapid expansion of the customer base.
Here are several of our favorite loyalty programs from the car industry that managed to achieve spectacular results for their brands over the last years:
Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquartered in Toyota, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on August 28, 1937. Toyota is one of the largest automobile manufacturers in the world, producing about 10 million vehicles per year.
Toyota is a major player in the global automotive industry. It has manufacturing plants in over 30 countries and sells its vehicles in over 170 countries. Toyota is also a major employer, with over 370,000 employees worldwide.
To join the Toyota Owners Club, you can create an account on the Toyota Owners website or through the Toyota Owners app. Once you have created an account, you will be able to start earning Toyota Rewards Points on your Toyota purchases and service appointments.
To earn Toyota Rewards Points, simply present your Toyota Owners Club membership card at the time of purchase or service. You will earn points based on the amount you spend. For example, you will earn 1 point for every $1 you spend on Toyota parts and accessories.
The Toyota Owners program offers a variety of loyalty campaigns, including special offers on parts and services, personalized recommendations, and access to exclusive events. One example of an effective loyalty campaign is the Clean Assist program, which provides Toyota owners with discounts on EV charging.
The Clean Assist program is a great way for Toyota to encourage owners of electric vehicles (EVs) to use public charging stations. The program offers discounts on charging at participating stations, which can help to offset the cost of owning and operating an EV. In addition to providing discounts, the Clean Assist program also provides EV owners with access to a variety of resources, such as information on charging station locations and tips for EV ownership.
The Clean Assist program is a valuable benefit for Toyota owners who are considering purchasing or leasing an EV. The program can help to make EV ownership more affordable and convenient, which can encourage more people to switch to electric vehicles.
The Toyota Owners Club is successful because it offers a compelling value proposition that resonates with Toyota owners. The program provides a tangible way for members to save money on their Toyota purchases and service appointments, which is a major incentive for car owners. Additionally, the program offers a variety of exclusive benefits that are not available to non-members, such as extended warranties, roadside assistance, and trip interruption coverage. These benefits make the program even more appealing to Toyota owners.
I like the Toyota Owners Club program because it is a well-designed and comprehensive program that offers a wide range of benefits to members. The program is also easy to use and understand, which makes it a hassle-free way for Toyota owners to save money and gain access to exclusive benefits. Additionally, Toyota is constantly adding new benefits to the program, which keeps it fresh and engaging for members.
Another interesting commitment-based loyalty program in the United States is FordPass Rewards Visa, operated by the Ford Motor Company, an American automaker that produces passenger cars, sports cars, commercial vehicles, and trucks (headquartered in Dearborn, founded in 1903). This concept is similar to Toyota's and allows for significant benefits for active use of the Visa card.
Ford has launched an app-driven loyalty program to express appreciation for devoted drivers in various ways. Through the FordPass Rewards Visa Card, customers can accrue FordPass Rewards Points with every card purchase. These earned Points can then be used to obtain discounts on various Ford offerings, including your future Ford vehicle, Ford servicing and maintenance, and Ford parts.
The campaign offering 3% Back in Points on gas, auto insurance, tolls, parking, and dining, and 1% Back in Points on all other purchases is very effective for the program and its customers. It is clear that the program organizers understand how important it is to keep their customers engaged on a daily basis, and the above examples of offers address this challenge.Â
Motorized customers can successfully use these offers during their trips, whether they are daily or long-distance. Well-designed campaigns that are easy to understand and beneficial to the customer make offers that are used much less frequently, such as purchases and service at Ford dealerships, more attractive to the customer.
A very important element of the program is the co-branded Visa card, which makes the program open to offers from program partners, or even business areas, that are beneficial to the organizers and desired by customers. In this case, the offer emphasizes the importance of several areas of direct interest to drivers, while giving them significantly more benefits for purchases made using the card. Of course, other purchases are also rewarded, but with only a 1% bonus. The ease of using the program with the co-branded Visa card and the obvious benefits for the customer in each case of its use are a major advantage of this program over other loyalty programs. An additional value for the organizer is the ability to collect and analyze significantly more data about the behavior of program customers.
Nissan, a Japanese car company, has launched a loyalty program in the US to reward customers for their loyalty. Nissan One to One Rewards program is simple: customers earn cashback for their purchases and service at Nissan dealerships in the US.
The rules of this project are very simple: customers earn points for purchases and service at Nissan dealerships in the United States, which they can then use to offset future purchases and service costs at Nissan dealerships. The details of the program mechanics are as follows:
You can check your member points balance at any Nissan loyalty point scanning terminal or on the website.
There isn't a high level of customer engagement in this program since cashback rewards are given for expenses like repair and parts costs or accessory purchases, which are relatively infrequent events. Even rarer are the cashback rewards of $250 for a new car purchase. As a result, the program may not appear particularly enticing, but it is certainly more appealing than traditional discount promotions. In this program, existing customers who utilize the funds accumulated from previous purchases are rewarded, as opposed to every customer, who might receive a discount even during their first visit.
The Nissan One to One Rewards program is successful because it offers Nissan owners valuable rewards that are relevant to their interests, is easy to understand and participate in, and is promoted regularly to remind members about the benefits of participation.
Members can redeem their points for a variety of rewards, such as discounts on future service and parts purchases, free oil changes, and gift cards to popular retailers. This gives members the flexibility to choose rewards that are most valuable to them.
In addition to the above, I also like the Nissan One to One Rewards program because it is focused on building relationships with customers. The program offers members personalized service and support, and it regularly promotes special events and promotions that are designed to engage customers and keep them coming back to Nissan dealerships.
Tesla is a company that makes electric cars, solar panels, and batteries. It was founded in 2003, and its goal is to help the world switch to sustainable energy.
One way that Tesla tries to do this is through its referral program. This program lets customers earn rewards for referring their friends and family to Tesla products. When a customer refers someone, and that person buys a Tesla vehicle or solar product, the customer gets a reward. The amount of the reward depends on what the person buys, but it can be up to $1,000 for a new Tesla car.
Tesla customers can earn "credits," or points, for referring up to 12 vehicle orders (e.g., Model S, X, Y) and 60 test drives in a calendar year, according to the program's terms and conditions. Credits must be redeemed within 12 months of the date of issue, exclusively for certain benefits in the Tesla app, which may vary by region.
An example of an effective loyalty campaign used in the Tesla referral program is the "Tesla Referral Exclusive" program. In this program, customers who refer the most friends and family to Tesla earn exclusive access to limited-edition Tesla products and experiences.
This campaign is effective because it offers customers something that they cannot get anywhere else. This makes the rewards more valuable and appealing to customers, and it can further motivate them to participate in the program.
Tesla does not advertise on TV like other automotive companies, and although it has a commercial, it is significantly different from the competition in this regard. On the other hand, it is able to leverage the power of its loyal customers to recommend Tesla vehicles or test drives to their friends, but not for free. It is difficult to say how effective these actions are, but Tesla's approach is certainly interesting and worth noting.
It is also worth paying attention to the B2B segment, which can also be very interesting in the context of loyalty programs. Two major brands, Continental and Castrol, have decided to develop their own loyalty programs for workshops. Both are based on a points system and a simple mechanism for exchanging points for rewards.
Continental Aftermarket is a division of Continental AG, a German automotive technology company. They're known for their high-quality replacement parts and repair services for cars, trucks, buses, and motorcycles.
Continental Aftermarket also has a loyalty program called the Continental Elite Rewards Program Member (RPM) Club. This program rewards customers for purchasing Continental products and services. Members earn points for every dollar they spend, and they can redeem those points for rewards like gift cards, merchandise, and even exclusive discounts on new Continental products.
Continental Aftermarket's Elite Rewards Program Member (RPM) Club is a loyalty program that rewards you for buying Continental products and services. You earn points for every dollar you spend, and you can redeem those points for rewards like gift cards, merchandise, and even exclusive discounts on new Continental products.
To join the Elite RPM Club, just create an account on the Continental Aftermarket website. Once you're enrolled, you can start earning points by buying Continental products and services from authorized Continental Aftermarket distributors and retailers. You can also earn points by participating in special promotions and events.
One example of an effective loyalty campaign used in the Continental Aftermarket Elite Rewards Program Member (RPM) Club is the "Continental Aftermarket Cash Back Program." In this program, members can earn cash back on their purchases of Continental products and services. The amount of cash back earned depends on the product or service purchased, but it can be up to 10%.
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This campaign is effective because it offers members a valuable reward that is relevant to their interests. Members are already saving money by purchasing Continental products and services, and the cash back program allows them to save even more money. This can motivate members to continue purchasing Continental products and services, and to earn even more cash back.
The Elite Rewards Program Member (RPM) Club is a successful loyalty program because it offers valuable rewards that are relevant to members' interests, is easy to understand and participate in, provides members with exclusive benefits, and is promoted regularly to remind members about the benefits of participation.
The rewards are valuable and relevant to members' interests. For example, members can redeem their points for gift cards to popular retailers, Continental merchandise, and even exclusive discounts on new Continental products. The program is also easy to understand and participate in. Members can join the program for free and start earning points immediately. They can also track their points and redeem them for rewards through the Continental Aftermarket website or mobile app.
Castrol is a British multinational lubricant company that produces engine oils, greases, and other automotive fluids. It is a subsidiary of BP plc. Castrol's products are sold in over 140 countries around the world.
Castrol FastScan is a loyalty program for independent automotive workshops. You earn points for every liter of Castrol products you buy from authorized Castrol distributors. You can then redeem those points for rewards like gift cards, merchandise, and event experiences.
To join the Castrol FastScan program, you need to be an independent automotive workshop and register on the Castrol website. Once you're registered, you'll get a unique QR code. When you buy Castrol products from authorized Castrol distributors, scan the QR code on your receipt to earn points. You can also earn points by participating in special promotions and events.
The program's rules are simple, everything is done in a simple and user-friendly app, but the rules for how many points each product earns could be simpler.
The program offers a variety of attractive merchandise rewards for those who have accumulated enough points, as well as a great incentive for those who are just starting out. All of this is of course available in the app. The entire process of exchanging points for rewards is very simple, and merchandise rewards are delivered by courier within a few business days of ordering.
ne example of an effective loyalty campaign used in the Castrol FastScan program is the "Castrol FastScan Cash Back" program. In this program, workshops earn cash back on their purchases of Castrol products from authorized Castrol distributors. The amount of cash back earned depends on the product purchased, but it can be up to 10%.
This campaign is effective because it offers workshops a valuable reward that is relevant to their interests. Workshops are always looking for ways to save money on products and services, and the Castrol FastScan Cash Back program allows them to do just that. This can motivate workshops to continue purchasing Castrol products and participating in the FastScan program.
Rewarding workshops for registering and downloading the app may seem like a simple thing, but it has many benefits for the future in the form of collected data on workshops and mechanics, which allows for better communication with them. In turn, reminding workshops how to earn points helps the program function more effectively and generates interest in the offer.
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Workshops earn points for every liter of Castrol products they purchase, and those points can be redeemed for a variety of rewards, such as gift cards, merchandise, and event experiences.
The program is successful because it offers workshops valuable rewards that are relevant to their interests, such as gift cards to popular retailers, Castrol merchandise, and event experiences. It is also easy to understand and participate in, and it provides workshops with exclusive benefits, such as access to training courses and networking events.
In addition, the program is promoted regularly to remind workshops about the benefits of participation. This helps to keep the program top-of-mind for workshops and encourages them to continue participating.
More mature and effective programs are implemented centrally, but this is obvious due to the significantly better capabilities of the company's headquarters. It is worth emphasizing that discount programs meet the needs of reducing spending, but they do not give a clear chance of customer return, unlike point-based programs (or cash back) that postpone benefits to subsequent customer visits and in this way build the frequency and return of customers, which is probably of particular importance to organizers. Enriching the program with many other features, such as technical support from experts, or ad-hoc promotions, increases customer activity.
Here are a few points to bear in mind:
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