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5 Reasons Your Auto Shop Needs a Loyalty Program

Posted by BayIQ on October 1, 2022 | 0 Comments

While a portion of your marketing efforts should always be geared toward attracting new customers, you must never overlook the importance of converting existing customers into repeat clients. One of the best ways to accomplish this is through a loyalty program. 

While they take many forms, customer loyalty programs are a type of marketing approach that incentivizes recurring engagement with your business. For auto shops, this might look like doling out points that can be used for discounts on services, or you might even offer rewards for referring new customers. 

Regardless of the method you choose, a loyalty program is a surefire way to boost your bottom line. Here’s how. 

1. Loyal Customers Spend More

Based on the Pareto Principle, we can assume that 80% of your business comes from just 20% of your customers. Moreover, the probability of selling to an existing customer is about 65% while that for a new customer is closer to 10%. 

With this in mind, it’s important to not only cultivate loyalty from new customers but also dedicate effort to maintaining the loyalty of current customers. One study finds that 57% of customers spend more on brands to which they are loyal. 

By focusing heavily on the people that are contributing the most to your business, you’ll ensure the retention of their business. 

2. Improves Engagement

About 70% of customers say that loyalty programs are a meaningful part of their relationships with businesses, and 15% of consumers are more likely to buy from brands with loyalty programs. 

By connecting with customers through your loyalty program, you’ll be able to increase the likelihood of them engaging with your business. For auto shops, this means that when the time comes for a tune-up or other repair, a loyalty program can help you remain top of mind for your customers. 

3. Increased Customer Retention

One study finds that about 80% of customers are more likely to do business with companies that offer loyalty programs, and nearly 58% of people buy from businesses whose loyalty programs they belong to at least once per month. 

By offering a system of accruing points or tiered membership benefits, you can give your customers something to strive for. This incentivizes future purchases and increases the likelihood that they’ll remain loyal to your business. 

4. Creates Brand Advocates

While the primary goal of customer loyalty programs is to increase the retention of your best customers, it can also drive the acquisition of new customers. One study finds that over 70% of people are likely to recommend a business that has a good loyalty program. 

This word-of-mouth advertising can function in several ways. In one case, you’ll have customers so satisfied with the loyalty rewards that––without compulsion––they recommend your auto shop to friends and family. In another way, you can actively reward people for spreading the word about your business as part of your loyalty program.

If your auto shop uses a points system, you might offer a set number of points both for referring new customers and for posting online reviews of your business. Most online review sources prohibit incentivizing customers to post positive reviews, but there are no rules against asking clients to share their honest opinions. 

5. Drives Sales

The overarching benefit of loyalty programs is an increase in sales. By bolstering customer engagement and loyalty, a rewards program will help attract both new and returning customers. 75% of customers are more likely to make another purchase after receiving an incentive, and loyalty programs use this knowledge to drive continued growth. 

How to Implement a Customer Loyalty Program

Loyalty programs can work in a number of ways. You might offer a free oil change after the purchase of five. Alternatively, you might offer a free $50 service for every $200 spent. 

Regardless of the method you decide to use, you’ll need to develop a way to track customer spending. Otherwise, you’ll quickly be unable to determine the rewards to which each customer is entitled. The most effective way to implement such a loyalty program is through software. 

BayIQ is a marketing platform designed specifically for auto shops that allows you to create and deploy customized loyalty programs for your customers. With this software, you can build out a system of rewards for spending and send out the relevant bonuses––directly to your customers. 

With BayIQ, you can also capture email and text message contact information for your customers, allowing you to reach out to them with additional promotions and reminders. 

Unlike other businesses, auto shops provide a service that is needed routinely. By engaging your customers and providing them with ongoing incentives for being loyal, you can ensure continued business for years to come. 

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Tags: customer loyalty, auto repair marketing, automotive marketing, auto repair shop, customer loyalty retention