The automotive industry is undergoing a massive transformation. To navigate this evolving landscape, car manufacturers, dealerships, and related services are increasingly turning to innovative strategies to maintain a competitive edge and ensure business sustainability. One such powerful tool gaining traction is the automotive loyalty program. But do car brands have loyalty programs? The answer is a resounding yes, and they are becoming crucial for success.
For a comprehensive understanding of the trends and statistics driving the adoption of next-generation loyalty programs, download our Global Customer Loyalty Report.
What Exactly is an Automotive Loyalty Program?
An automotive loyalty program is a specialized customer retention strategy tailored for businesses within the car industry. This includes car manufacturers themselves, franchised dealerships, car rental companies, and even aftermarket service providers.
Whether we are discussing loyalty programs directly from car manufacturers, those managed by dealerships, or schemes offered by rental agencies, the primary objective is consistent: to enhance customer lifetime value for the business. However, the specific goals of different automotive loyalty program types can be fine-tuned to achieve particular key performance indicators (KPIs) for a brand. These KPIs might include boosting brand recognition, improving customer personalization, or expanding social media engagement.
“As connected car technology becomes more widespread, operating effective loyalty schemes will become simpler for Original Equipment Manufacturers (OEMs). By offering a loyalty program that rewards customers, OEMs can increase the likelihood of customers choosing authorized dealerships over independent garages. The location-based data from connected cars also unlocks further possibilities. For instance, an OEM partnership with a major coffee chain could drive customers to that brand, allowing them to accumulate points or redeem rewards outside of their direct interactions with the OEM.”
Tom Arnold, Account Director at Acxiom UK
Here are several common forms that automotive loyalty programs can take:
- Commitment-Based Loyalty Programs: These programs reward members with discounts on vehicle purchases in exchange for a commitment to utilize the company’s services and network. This often involves installing and actively using brand-related apps and enabling connected car technology to facilitate data sharing.
- Membership-Based Loyalty Programs: The core aim here is to cultivate customer relationships through exclusive, members-only content. This might include priority service access or special offers. While membership is typically open to anyone, these programs often don’t offer immediate discounts, focusing instead on ensuring the brand is the customer’s top choice when making a purchase or service decision.
- B2B Loyalty Programs for Partners: These programs are designed to incentivize partners, suppliers, and subcontractors, rather than end consumers. By offering rewards and special benefits, they aim to enhance the performance of these partner businesses and strengthen the overall partnership ecosystem.
- Loyalty Programs for Auxiliary Services: These coalition-based programs encompass a range of automotive-related services like car rentals, car sharing, body shops, and repair facilities. Customers can earn points from one participating brand and redeem them for rewards with another within the network.
BMW Digital Connect showcases features that can be activated remotely for a subscription. Automotive loyalty programs could leverage such features as valuable rewards.
Key Customer Retention Challenges in the Automotive Sector
To design effective loyalty programs with impactful features and technologies, it’s essential to understand the specific challenges faced by automotive companies in retaining customers.
A primary challenge for the automotive industry is the inherently low purchase frequency. This infrequency leads to three significant pain points:
- Limited customer touchpoints
- Scarcity of comprehensive customer data
- Reduced ability to influence customer behavior
Want to learn more about gathering customer data effectively? Explore our Mission: Loyalty video for expert insights!
Due to the high value and infrequent nature of car purchases and major automotive services, car brands and dealerships have limited opportunities to engage with customers. This scarcity of interaction makes it difficult to gather robust data on vehicle usage, customer preferences, driving habits, and more, hindering personalization efforts. Furthermore, the lack of regular touchpoints makes it challenging to nurture brand loyalty and educate customers about offerings over the long term.
Fortunately, technological advancements are poised to revolutionize customer engagement in the automotive sector. Connected car technology, in particular, offers opportunities for more consistent interaction through features like smart parking subscriptions and over-the-air updates. This not only facilitates ongoing engagement but also encourages customers to frequently use the brand’s smartphone app, creating opportunities for push notifications and personalized communication.
Whether leveraging dedicated apps or connected car technology, a well-structured reward system is crucial for enhancing customer retention strategies by incentivizing valuable customer behaviors.
“Personalization is truly the key to maximizing brand loyalty. Why? Because purchasing a car is unlike buying everyday consumer goods. The time between purchases is substantial. Therefore, by creating personalized and targeted engagement opportunities with your customers over time, you will cultivate brand loyalty and drive long-term retention.”
Patrina Kerr, CEO of Hachiko
Essential Loyalty Program Features for Automotive Brand Differentiation
Successful car loyalty programs are built upon a combination of key elements. To truly stand out and capture customer attention, these components must be seamlessly integrated. Here are some of the most critical features for automotive companies aiming to launch exceptional loyalty programs.
Engaging Membership Page
Often overlooked, a visually appealing and user-friendly membership page is crucial. This “home” for the loyalty program is the primary interface for members and must be inviting, easy to navigate, and clearly communicate the benefits of joining. It should also display a member’s loyalty ID for in-store recognition and include a comprehensive FAQ section clarifying program rules.
A well-designed membership page should visually represent customer progress towards rewards and tier advancements.
Next-Gen Loyalty Engine
The “loyalty engine” refers to the core mechanics of the program. A common approach is a point-based system where members accumulate loyalty currency based on spending at dealerships, service centers, or partner locations (in coalition programs). These points can then be redeemed for discounts and exclusive offers on future purchases.
Alternatively, a perks-based system can offer unconditional benefits to all members upon enrollment or after a qualifying purchase. Perk programs excel at building a centralized customer database for communication and engagement. Perk loyalty programs are ideal for brands focused on customer education and building a broad customer base.
Coalition Programs
Coalition loyalty programs bring together multiple brands under a unified loyalty framework. In the automotive context, this could strengthen relationships between manufacturers, dealerships, repair shops, and even fuel stations. Unlike simple partner reward integrations, coalition programs allow customers to earn points at any participating location and redeem them at another within the network.
Coalition loyalty programs significantly increase the value proposition for members, providing a competitive advantage.
Subscription-Based Membership
While most loyalty programs are free, the success of subscription models like Amazon Prime demonstrates that customers will pay for valuable rewards. In the automotive industry, a subscription-based loyalty program could offer premium benefits like priority roadside assistance, complimentary maintenance, and vehicle health monitoring for a recurring fee.
Partner Rewards
The appeal of car and dealership loyalty programs is greatly enhanced by diverse partner rewards. Members can enjoy benefits like complimentary refreshments at partner gas stations or discounts on car parts at affiliated body shops. A well-curated reward catalog centered around convenience and relevance is essential, leveraging partnerships to their full potential.
Partner rewards are a key trend in loyalty programs for the coming years, as highlighted in our Global Customer Loyalty Report 2023. Download it now to explore further insights.
Gamified Data Collection
Personalization in the automotive industry is often hampered by data scarcity. To address this, loyalty programs can incorporate gamified surveys about driving habits, vehicle preferences, financial considerations, and service preferences. Incentivizing survey completion through loyalty points allows brands to gather valuable customer insights.
Advanced profiling systems can use survey responses to create customer tags for targeted segmentation and personalize communications effectively.
Gamified profiling unlocks a new level of customer understanding and data richness.
Connected Car Tech Rewards
The rise of smart vehicles managed through over-the-air updates presents new reward opportunities. Automotive loyalty programs can offer early access or free trials of connected car features as rewards. For example, offering a week of enhanced driving assistance to new members, with the option to extend it using loyalty points, can drive adoption and engagement.
Mobile Engagement
A dedicated loyalty app, complete with a digital loyalty pass, serves as a central engagement hub and significantly increases customer touchpoints. The app can deliver personalized alerts about deals, program updates, and relevant news. It can also facilitate service management, partner discovery, reward redemption, quizzes, and even provide useful information like weather reports. Complementing a loyalty app with a Mobile Wallet, which stores digital loyalty cards alongside other passes, further enhances mobile convenience.
Watch our video to learn how Mobile Wallet solutions can strengthen customer connections.
8 Inspiring Automotive Loyalty Programs and Dealership Reward Programs
Here are examples of real-world automotive and dealership loyalty programs for inspiration:
1. Enterprise: Enterprise Plus
Enterprise, established in 1957 and operating in over 8,000 locations globally, offers a customer-focused car rental loyalty program that blends earn & burn mechanics with a tiered structure.
- Earning: $1 spent equals 1 point, redeemable for discounts on future rentals or free rentals.
- Point Expiration: Points expire after 3 years but can be extended with a qualifying rental.
- Tiered System: Four tiers based on rental frequency or total rental duration.
- Tier Benefits: Higher point earning rates and complimentary vehicle upgrades.
Generous point expiration policies, particularly in automotive loyalty programs, can significantly enhance program appeal.
Why it Works:
- The earn & burn model remains effective in the car rental industry due to higher purchase frequency compared to car sales.
- Multi-year point expiration is well-suited to the automotive purchase cycle.
- Tiered programs effectively maintain long-term customer engagement.
2. Ford Motor Company: FordPass
Ford, a pioneering automotive company, utilizes an innovative app-based loyalty program, FordPass, to reward drivers in various ways.
- Earning & Redemption: Customers earn points on Ford spending, redeemable for discounts at participating dealerships.
- Maintenance Rewards: 42,000 points unlock complimentary flexible maintenance services.
- Roadside Assistance: 24/7 roadside assistance accessible via the FordPass app for loyalty members.
- Exclusive Access: Early access to events for loyalty program members.
- Connected Car Features: App-based remote vehicle control and scheduling.
Ford’s partnership with Visa offers bonus rewards to cardholders, enhancing loyalty program value.
Why it Works:
- Leveraging partnerships expands point-earning opportunities for customers across various purchases.
- Benefits like roadside assistance are highly valued by drivers.
- Early access perks create strong perceived value.
3. BMW: Inside Edge
BMW UK’s Inside Edge program, powered by Antavo, focuses on connecting with company car drivers through a reward-only perks program without points.
- Enrollment: BMW owners enroll by providing their license plate number for system validation.
- Reward Types: Claimable gifts (e.g., movie experiences) and prize draws.
- Data Collection: Short surveys to understand driving habits and preferences are required to claim certain rewards.
Inside Edge focuses on exclusive perks for fleet drivers to build strong relationships with company car owners.
Why it Works:
- Perk-driven programs offer immediate reward experiences and inclusivity.
- Prize draws add excitement and variety.
- Partner rewards, such as complimentary coffee, broaden appeal across demographics.
4. Volvo Cars Loyalty Program
Volvo in the UAE region offers a unique program providing parts and labor benefits based on vehicle age, rewarding longer ownership.
- Age-Based Tiers: Four tiers (0-2, 3, 4, and 6+ years of vehicle age).
- Discounts: Up to 35% off parts and 30% off labor.
- Additional Benefits: Free 15-point vehicle check, mobility car discounts, and complimentary car recovery.
Volvo’s program incentivizes existing customers to maintain their vehicles and benefit from parts and service rewards.
Why it Works:
- Tiers create motivation for customers to reach gated rewards like discounts.
- Tiers based on ownership duration naturally foster brand loyalty.
- Tiers effectively establish a tiered benefit structure within the program.
5. Europcar: Privilege Loyalty Program
Europcar’s Privilege program is a leading car rental loyalty program with a hybrid approach, combining immediate perks with a tiered system.
- Universal Perks: 10% discount on 3+ day car or van rentals for all members.
- Tiered Benefits: Free weekend rentals, priority service, and one-car category upgrades after 3 rentals.
- Top-Tier Benefits: Double upgrades and Priority Pass airport lounge access for elite members.
Privilege targets both regular drivers and business executives with tailored program versions, demonstrating demographic flexibility.
Why it Works:
- Inclusive base rewards drive program enrollment.
- Desirable benefits like free upgrades offer significant value.
- Hybrid programs combine the strengths of different loyalty models.
6. Nissan: One to One Rewards
Nissan’s One to One Rewards program enhances the customer experience at dealerships worldwide.
- Earn & Burn: Points earned on vehicle, parts, and service spending.
- Vehicle Purchase Discount: $250 discount towards the next vehicle purchase.
- Physical Loyalty Card: Available to enrolled members.
Nissan employs the traditional earn & burn model, known for its simplicity and speed of implementation.
Why it Works:
- High-value rewards are appropriate for infrequent, large purchases like vehicles.
- A $250 discount on a future car purchase is a significant incentive.
- Physical cards can still convey exclusivity.
7. Fred Beans: AutoRewards program
Fred Beans AutoRewards is a dealership loyalty program offering value to customers in the Philadelphia area.
- Discount-Focused: Each point equals a $2 discount (up to $2,000 total).
- Tiered Benefits: Free oil changes at point milestones (350, 500, 750, 1,000 points).
- Non-Transactional Earning: Points for referrals, app usage, and membership card swipes.
Engaging customers beyond the purchase cycle is crucial in industries with low purchase frequency to maintain brand connection.
Why it Works:
- Frequently used services like oil changes are impactful rewards.
- Desirable rewards at each tier level motivate progression.
- Rewarding non-transactional engagement maintains brand relevance between purchases.
8. Subaru: Ownership Benefits
Subaru Ownership Benefits in the US provides a range of privileges to all Subaru owners, rather than a traditional points-based program.
- Ownership-Based Access: Benefits are available to verified Subaru owners.
- Diverse Benefits: Discounts on insurance and tech subscriptions, lifestyle magazines, and event invitations.
- Benefit Updates: The list of privileges changes throughout the year.
The ideal automotive loyalty program offers a seamless user experience for accessing benefits, ideally from a single platform, even for third-party rewards.
Why it Works:
- Ownership-based membership enhances exclusivity.
- Broad reward access compensates for a potentially longer enrollment process.
- Regularly updating rewards keeps the program fresh and engaging.
Accelerating Towards Customer Loyalty
Automotive loyalty programs offer substantial opportunities to drive brand success by cultivating genuine customer loyalty. We are ready to showcase our advanced loyalty solutions and robust API capabilities to support your vendor selection process. Please feel free to send us your RFP.
And remember to download Antavo’s Global Customer Loyalty Report for in-depth statistics and future industry trends to navigate the evolving world of next-gen loyalty programs.
Sheila Power
Sheila is Antavo’s VP of UK & North America, bringing decades of experience with consultancies and SaaS providers globally. She is a passionate advocate for loyalty programs and advises brands on optimal solutions.
