Loyalty to the Ford brand comes with perks; the company is shaking up the rewards program after taking in feedback from dealerships and salespeople.
Ford Takes Charge
In an effort to expand the utilization of Ford’s loyalty reward program, the company has revealed a new app-based system that is fully funded by Ford, removing the weight from dealerships’ shoulders.
Ford’s old rewards program, dubbed Owner Advantage Rewards, was not well-received by the company’s dealership network. With financial losses from rewards and rebates coming out of dealership wallets, rather than Ford’s own, adoption of the program was far more limited than Ford had hoped. Across the country, all told only 400 of Ford’s roughly 3,000 dealers opted to offer the program.
In contrast, April’s launch of the new FordPass Rewards program was a colossal success, with nearly a 100 percent adoption rate. Ford’s shouldering of the financial cost has made implementing FordPass Rewards a no-brainer for dealerships.
Better Rewards for Customers
The rewards program revamp isn’t just a boon for dealerships. FordPass took another pass at customer benefits to make it a more enticing offer. As an appetizer, all customers who download the FordPass Rewards app and tie it to a new Ford vehicle will receive 42,000 rewards points. The starting points are valued at about $210, equivalent to three oil and air-filter changes. Certified pre-owned Ford vehicles offer a smaller bonus at 11,000 points.
Besides the starting bonus points, FordPass users earn 5 points per dollar spent on Ford services such as maintenance and repairs. Points can be banked and spent on a variety of goods, not the least of which is the customer’s new bought or leased Ford vehicle.
Ford credits feedback from their retail network for the revamped changes that aid both sellers and buyers. Jason Sprawka, Ford’s director of U.S. customer experience, told Automotive News that, “The dealers made this program better. They challenged us to redesign it so that it was more customer-centric.”
Raising Customer Retention
That customer-centric philosophy is part of a growing trend at Ford as the carmaker continues to fight customers fleeing to other competitors, especially in the service side of the company.
Despite long topping industry charts for brand loyalty and retention, connection to the brand hasn’t translated to loyalty to dealerships, which Ford wants to rectify. As Automotive News noted, dealership service shops are struggling to bring in customers, with just barely over half of new buyers bring their vehicles back for their first dealership-serviced oil change, let alone more profitable work.
“Right now, we need to take care of the customers we have,” said Elena Ford, chief customer experience officer for Ford.
Changing the Past
Ford’s failures with past rewards offerings are a big focus for the FordPass updates. Sprawka believes that the new points banking system should help entice customers to save for bigger, more profitable services and return trips that the old system failed to generate.
Giving customers a reason to save is an area Ford needed to improve, according to Sprawka. Under the old system, customers, “weren’t really locked into the dealership. They’d earn a few points on an oil change, but they just spent it on the next oil change. It just became a discounting cycle. They weren’t growing their points and staying loyal.”
Offering more paths for point generation is another fix for the mistakes of the past. Sprawka mentioned that Ford is designing additional avenues that encourage purchases beyond basic routine maintenance work to break out of that discounting cycle.
Ford also wants to give dealerships more autonomy to interact with the program as they see fit. Point promotions are one possibility, with the carmaker working on a program for dealerships to purchase point pools they could dole out to customers on their own terms, such as at special sale events.
Designing New Deals
Ford took a look at many existing programs and offers in the sales world to pick the best strategy and tactics for their new rewards redesign. Ford’s own internal data showed that an outside perspective was needed, as the automotive industry’s loyalty offerings have not scored well with consumers in the past.
Ford borrowed ideas from airline giants such as Delta and United, taking cues from frequent flyer programs and other services that are among the most respected by customers. Tactics such as offering an opening bonus of points have done well for airline operators and Ford hopes that will translate well into the auto industry.
“It’s like in the airlines business,” Sprawka told Automotive News. “If you have a small flight to Florida, you’re probably going to look at your points and save those for a big family trip to Hawaii.”
Ford’s hope is that the big batch of starting points will bring customers back to dealerships for service, where they will continue to come spend money on small services such as filter changes. From there, Ford is banking on customers saving points for big-buck services or even new car purchases, increasing income for both the carmaker the dealership partners.