Reward cards are no longer the preserve of the high street. Car Dealer meets the man introducing the UK’s latest automotive loyalty scheme. Richard Aucock reports
HANDS up anyone who makes a diversion on the way home, to use a BP fuel station instead of any other. Or who is wedded to Tesco rather than its rivals. Well you can join more than 85 per cent of the UK population then.
That’s the power of loyalty cards. Your writer here is a Nectar obsessive. Joining millions of people across the country. But how do you take advantage of this super-power magnet in your own business? Get on to Paul Cleverly of Complete Automotive Solutions, that’s how.
He’s just launched Bluerewards. This is a loyalty reward scheme that card-carrying customers can use to get money off new cars. It’s unlike any other dealer reward scheme thus far – and offers benefits on an unprecedented scale.
Cleverly told us the background. ‘With CloseIt, we are able to measure customer retention. Generally, it is around 20-30 per cent. There are therefore millions of customers out there who are changing brand – and thus, changing dealership – when they buy a new car. This started to interest us…
‘We found that, when people change car, they tend to stay within the same car segment. They just, well, fancy a change. So, if you’re a multi-brand group, you probably have a product there that interests them. But are customers aware of this?
‘Increasingly too, carmakers are pushing dealers by town, such as Bristol Ford, rather than by group. Customers probably won’t even be aware you’re part of a multi-franchise group!
‘In short, you need some way of bringing them back at vehicle change time, to ensure the first conversation they have is with you. And you need a way of ensuring that prospect is an incredibly good one.
‘To be blunt, you need a bribe, to ensure they don’t go anywhere else…’
This led Cleverly to look at the various reward products on the market. The problem with all of them, he said, was that they cost the dealer money. A non-starter in the current climate. They were also reliant on just a few customer money-saving opportunities within the ownership of the vehicle – such as 10 per cent off servicing.
‘They just didn’t offer enough opportunities to enhance the relationship,’ added Cleverly.
A year ago, Cleverly made a pivotal trip to the US. There, he discovered Automiles – a loyalty scheme for dealers. ‘It was an online reward scheme, to which various retailers were signed up,’ he explained. ‘Spend money with them, and customers earned points.’ And points mean the prize of cash off cars…
Fast-forward a year, and Cleverly is about to launch a similarly groundbreaking product in the UK: Bluerewards. The premise is simple – and quite stunning.
Bluerewards works exclusively with a jaw-dropping array of retailers. These include Currys and Dixons, PC World, Vodafone, Play.com and BHS. Customers earn money thus: they buy, say, a mobile phone from Vodafone. Ordinarily, the retailer of the phone would be paid a commission, but here that goes to the customer’s Bluerewards account instead. This commission accrues, to fund a new car. Genius? And then some…
It is all managed through a bespoke Bluerewards web portal. This ensures that every time a customer buys online from a listed partner, they’ll earn money to buy a new car.
There’s more. ‘This portal is branded to the dealer’s own look. In essence, it is the dealer’s own shop, in which the buying customer is rewarded with money off a new car from them.’ A dealer shop that sells all sorts, from Vodafone mobiles to the new X Factor DVD.
That’s not all. Cleverly’s team offer daily deals, too. These feature ‘one-offs’ – short-term bargains and other incentives to make people visit every day.
This means, of course, they’ll see your dealer branding all the more often. If Dixons have 400 of last year’s LCD TV model to shift fast, this is where they’ll appear. At a price that’s more of a steal.
‘It’s your dealership helping people to save money,’ enthused Cleverly. ‘This is great for brand recognition and loyalty.’
Other benefits include the reduction of list price discounts needed to be competitive. Right away, you’re giving customers the hundreds of pounds they’ve accrued off a car. There’s also additional aftersales business, and a commitment from long-term owners to use you for servicing. The e-mail distribution system is equally powerful.
Signing up is easy. Dealers have to take out a two-year contract, and need to buy two sets of a welcome pack in this time. That includes special customer loyalty cards, in 500, 1,000 or 2,000-strong bundles. The card is fully branded with the dealer’s logos, by Cleverly’s design
team – and is packed in a welcome booklet, again in dealership branding.
His design team also produce your own Bluerewards web page. Costing £500, this is the bit that customers will see day-to-day, and which you will pay £100 a month to keep up and running. Other than that and the two card pack bundles (which start at £1,000), it won’t cost you a penny.
‘The amazing thing is, if the customer doesn’t come back to the dealer to buy the next car, the cost to the dealer is minimal,’ adds Cleverly. ‘In these difficult times, loyalty is king. This is going to revolutionise the way in which dealers work, in order to keep customers buying cars from them again and again.’
He has evidence of results, too. Cleverly sent out a survey to more than 16,000 people. Without any sort of buying incentive, the results showed that 20 per cent loyalty rate we mentioned at the start. But what about with a rewards scheme?
‘57 per cent would talk to the dealer if they accrued a credit of just £200. Increase that to £400, and the prospect rate jumped to 78 per cent. Using the standard 25 per cent conversion rule for customers who have bought from you before, that’s a minimum of 38 or a likely 91 additional sales.’ Pretty compelling stuff, you have to agree.
‘Repeat customers are your best customers, period!’ summarises Cleverly. ‘Extremely low
cost per sale and with very high profitability, this is the only gold mine you need to worry about…’
For more information visit the Complete Automotive Solutions’ website here.