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The Demand For A New Era of Automotive Loyalty

Hoca

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There is an untapped potential for automotive loyalty programs, and we are living in an era where customer loyalty is more fleeting than ever. Until now, the relationship between OEMs and customers has been largely transactional. A customer buys a car, and the interaction ends there until the next purchase cycle—typically five to ten years later.

But in today’s competitive landscape, this model is no longer sufficient. Customers expect ongoing engagement and value from the brands they choose.

The way forward is to build innovative loyalty programs beyond the usual incentives to create genuine brand advocates. The power of loyalty programs has proven successful in other industries, from airlines to retail. They create a sense of belonging and reward customers for their repeat business. However, the automotive industry has been slow to adopt comprehensive loyalty programs.

This needs to change, and here’s why.

Why Does Loyalty Need to Change?​


Three major desires of OEMs and customers are changing the face of automotive loyalty:

  1. Increased Customer Retention – It’s significantly cheaper to retain an existing customer than to acquire a new one. Loyalty programs can keep customers engaged between purchases, ensuring they return when it’s time for a new vehicle.
  2. Higher Lifetime Value – Loyal customers are likely to spend more over their lifetime, not just on vehicles but on related services such as maintenance, accessories, and upgrades.
  3. Enhanced Customer Experience – A well-designed loyalty program can improve the overall customer experience, leading to higher satisfaction and positive word-of-mouth.

Crafting the Ultimate Loyalty Program​


To create a successful automotive loyalty program, manufacturers need to think creatively and holistically. Here are key elements to consider:

  1. Tiered Rewards Systems – A tiered system encourages customers to strive for higher levels of rewards. For example, a basic tier might offer discounts on services, while higher tiers could include exclusive access to new models, VIP events, or even free maintenance packages.
  2. Personalized Experiences – Leverage data to understand customer preferences and tailor rewards accordingly. Personalization can range from targeted service reminders to custom offers based on driving habits and vehicle usage.
  3. Integrated Ecosystems – Create an ecosystem where customers can earn and redeem points across various touchpoints—dealerships, service centers, online stores, and partner businesses. This integration makes the program more valuable and versatile.
  4. Community Engagement – Build a community around your brand. Organize events, create online forums, and encourage social media engagement. Customers who feel part of a community are more likely to remain loyal.
  5. Seamless Digital Experience – Ensure your loyalty program is accessible and easy to use via a mobile app and online portal. Customers should be able to track their points, redeem rewards, and access exclusive content with just a few clicks.

Several automakers are already pioneering in this space. For example, Tesla is known for its referral program, as it rewards customers who refer new buyers with exclusive perks including early access to new models and significant discounts. The BMW Loyalty Program also offers a range of benefits, from special financing rates to personalized gifts and invitations to exclusive events. Further, Hyundai Rewards allows customers to earn points for vehicle purchases, service visits, and even test drives, which can be redeemed for future purchases and services.

The Road Ahead​


The future of automotive loyalty programs is bright, but it requires a shift in mindset. OEMs must move beyond the traditional sales cycle and invest in long-term relationships with their customers. By doing so, they can turn one-time buyers into lifelong brand advocates, driving sustained growth and market leadership.

By fostering deeper connections with customers and offering meaningful rewards, OEMs can ensure that their brands remain top-of-mind and top-of-choice. The journey to loyalty starts now. Are you ready to take the wheel?

The Perficient automotive team would love to hear your thoughts and help you to build out a world class loyalty program that gives you a sustainable competitive advantage in the marketplace.
 
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