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 Last month General Motors announced a new compensation structure based on customer retention. The pay plan affects 29,000 salaried employees in the U.S., who will be paid bonuses based on how well they promote customer loyalty through return purchases and services. Third-party sales data and internal numbers will determine if a dealership hits its loyalty target.


It’s nice to know that the major manufacturers are realizing the importance of customer loyalty. For General Motors’—and other—dealerships who are ramping up their customer loyalty programs, here is a very short primer on how to set up a successful program:


1) Strategy: Offer multiple membership levels, including a free “starter” base level offer, ascending to an advocate level for the best customers who frequently buy and refer friends. The goal is to create customers who talk positively about their experience and refer family and friends.


2) Process: Identify dealership market segments; design appropriate promotions and communications; establish a schedule for customer communications; design the rewards redemption process and program results measurement tools; train employees to properly promote & explain the program.


3) Management: Establish best practices and determine how much of your program you want to automate. Assign management duties for each part of the program.


4) Reporting & Measuring: Determine which metrics should be used to provide an accurate analysis of how the program is benefiting the dealership. Examples include increasing customer retention rates, decreasing service acquisition costs, selling more maintenance, i.e. increasing RO hours and revenue.


Excerpted from MediaTrac’s white paper:  “The Auto Retailer’s Ultimate ‘How-to’ Guide to Customer Loyalty & Retention Program Set Up, Management & Measurement.” To download your free copy, click here:

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Tags: cards, customer, loyalty, programs, retention, rewards


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