Would You Buy a Car From This Plan?

AutoNation’s AutoRewards creates a bond between dealers and drivers

Forget the traditional car salesman in the loud checked jacket: The next person who builds a cozy marketing relationship with auto owners may well be wearing a U.S. Postal Service uniform.

At least this is the case in Denver, where 50,000 car owners, largely captured through 17 John Elway AutoNation USA dealerships, are part of AutoRewards, a fledgling points-based program from new- and used-vehicle vendor AutoNation USA. And the company, headquartered in Fort Lauderdale, FL, is in the process of taking the program to all of its one-price, no-haggle dealerships nationwide, with more than 40 outlets in north Florida in the process of coming on board.

The challenge of a loyalty marketing plan aimed at car owners is that the industry’s purchase cycle – slightly more than four years – makes developing legitimate reasons for the dealer to contact the client difficult. As a result, only a quarter of all customers go back to the same dealer where they bought their last car.

AutoNation also owns the National and Alamo rental car brands, as well as financial services and neighborhood service center divisions. This allows the company to provide a variety of goods and services to AutoRewards participants. A customer can buy, lease or rent a car, or have that car cleaned or serviced.

“A loyal customer is one who never leaves our network,” says Maria Bailey, vice president for AutoRewards. “[They have] the experience of the brand, and keep on experiencing it after they drive off the lot. We try to touch our customers more frequently than the traditional car dealer.”

Membership in AutoRewards is free for anyone purchasing or leasing a car from AutoNation. Immediately upon signing up, all AutoRewards members are entitled to free enrollment in Alamo’s Quicksilver or National’s Emerald programs, as well as special discounts on rentals. Members also receive free roadside assistance, one-year service guarantees, extended service hours, $500 off their next vehicle purchase and two $25 Instant AutoReward certificates applicable toward future service and accessories purchases. A three-month expiration date creates a sense of urgency to return.

Members can also save on gasoline if they top off their tanks at AutoNation outlets. The pump itself pushes AutoRewards. A digital display asks whether or not a gas buyer is a member. Those who aren’t are invited to purchase a membership.

AutoSelect, the program’s basic level, entitles participants to receive invitations to member-only events. Top-level management often speaks face-to-face with customers at these functions.

The next-highest level, AutoPlus, is awarded to members who through service use, product purchase or other interactions with AutoNation earn 7,500 points annually. In addition to the above benefits, AutoPlus members receive priority service appointment scheduling and invitations to AutoPlus-only events, such as concerts, theater evenings and cookouts.

AutoElite members, who accumulate 10,000 points annually, receive all of these benefits, as well as one free detailing, free registration for two non-AutoNation vehicles, and invitations to exclusive AutoElite events. Like those events held for AutoPlus members, company officials attend these too.

Monthly point statements issued by the company tout the benefits of migrating across membership levels, and offer suggestions on how a member can do so. While buying a car is the fastest way to rack up points, members can also earn them for making a referral (one of the strongest forms of advertising within the industry), or providing data on their automotive habits.

The company is very aware of information’s value: A survey mailed to customers within two weeks of their first purchase captures household demographic, lifestyle, vehicle shopping pattern, and “share of garage” information.

Having participating vendors from across several manufacturers contributes to the program’s flexibility. By not locking itself into a single manufacturer, AutoRewards can offer almost any type of vehicle to its members. “We have Hummers to Hyundais,” says Bailey. “If you have triplets next week, we can deliver a minivan.” Conversely, if AutoNation is having a special on minivans, the database can be segmented according to which members are most likely to buy one. A customized statement indicating how many points they have – or need – in order to earn a discount on the minivan’s price can be sent to each qualifying member.

The company has found that hard benefits, such as the discounts, are more attractive to members than the softer ones. “The elements that aren’t unique – such as roadside assistance, free shuttle service – we thought would be more important than they were,” Bailey says. “Customers are smart. They know they can get discounts to amusement parks anywhere.” The company plans to evaluate the program’s structure in December, perhaps emphasizing the hard-dollar benefits more next year.

According to Bailey, the company is well on its way to its goal of exceeding the industry level of referrals by 50%, and generating incremental service increases of 10%. AutoRewards, which was launched last Dec. 26, is too new to evaluate its third goal, a hike in repurchase rates.

As of Sept. 1 the program had given out 25% more points than the firm had anticipated – not that AutoNation is complaining.

AutoNation is investigating additional ways of accelerating members’ point accumulation. The company is on track to issue a co-branded credit card, which would double as an AutoRewards card, in the first quarter of 2000.