News
Dealers use smart cards to bring buyers back
May 1, 2000
Arlena Sawyers
Staff Reporter
Gary Coleman believes
it is vital to get vehicle buyers back to his dealership's service department
for their first oil change.
Saying returning buyers
give his service advisers a chance to meet and establish a rapport with
customers, the general manager at Vester Honda-Mazda-Chrysler-Plymouth-Jeep
in Wilson, N.C., is getting some help from "smart card" technology.
Coleman's dealership
gives LoyaltyCards to every new and used vehicle buyer. LoyaltyCards
look like credit cards. Pre-set credits for services and customer information
are stored in computer chips on each card.
The cards are good
for free oil changes, safety inspections and discounts on other services.
Each card also stores a record of customers' maintenance schedules and
service histories.
Over five years, the
retail value of a card is worth about $2,950 to a new vehicle customer,
not counting cash for referrals. The value could be less to used vehicle
buyers, depending on the vehicle’s mileage.
Cardholders also are
entitled to $50 for one customer referral that results in a vehicle
purchase, $100 for the second referral and $150 for each referral thereafter.
Mike Ritchie, president
of RiNG Systems, the Charlotte, N.C., company that developed the system,
said the first dealership using the card in March 1999 saw sales increase
from 200 vehicles to 260 that first month.
Coleman said Vester
has been handing out the cards for six months, and it is still too soon
to quantify results. But he is counting on the card to help retain customers.
"After all, it's
all about establishing a relationship with the customer," Coleman
said.
BACK TO THE DEALERSHIP
Giving out freebies
and discounts to create goodwill and lure customers back to the dealership
is not new. For years, dealerships have given away coupon books with
slips of paper for free oil changes and discounts on dealership parts
and services.
What is new is that
dealerships are using computer technology to replace those slips of
paper.
Reynolds and Reynolds
Co. of Dayton, Ohio, which supplies data systems to dealers, hopes the
trend continues.
After company officials
read a story in Automotive News, Reynolds bought the rights for an undisclosed
amount in March to become the exclusive distributor of RiNG’s LoyaltyCard
System. Eleven dealerships now use RiNG's cards.
At Vester, customers
use their cards at the dealership's touch screen computer kiosk. The
computer reads the information and tells consumers what recommended
maintenance is due and what discounts or free services are available.
Dealerships can customize
the cards' benefits to fit their and their customers' needs.
Steve Himes, general
manager of LoyaltyLINK Solutions at Reynolds, said his company paired
up with LoyaltyCard because he believes it will help dealers retain
customers.
THE SURVEY SAYS
He said Reynolds polled
160 consumers who were issued LoyaltyCards and found that:
· 52.5 percent
have returned to the dealership for an oil change
· 67.5 percent
said they will likely return to the dealership for maintenance service
and parts
· 67.5 percent
said they will likely return to the dealership when they are ready to
trade in their current vehicle
· 71.9 percent said they
are likely to recommend the dealership to friends and family members.
Himes said the cards
will cost dealers about $30 each and the kiosks will run about $400
to $500 a month.
