Several hundred automobile dealers around the country are sweetening their deals with frequent flyer miles, according to Marty Bernstein of the American International Automobile Dealers Association.
It’s all because of a four-year-old service from a company called DealerMiles located in Denver, Colo.
According to Jim Burness, DealerMiles chief executive officer and general manager, “Automotive service is a very competitive business — five years after purchase the majority owners no longer have a dealer service their vehicle. Dealers, as a result, are always looking for ways to tell their customers, how much their business is appreciated.”
Burness’ enthusiasm is supported with survey data the company compiles on a monthly basis from dealers and consumers. Dealers recently surveyed on the impact of DealerMiles on customer service responded to the effectiveness of flyer miles on business generation. Thirty-seven percent said the program had 37% greatly improved business, and 45 percent claimed a moderate improvement.
Concurrently, consumers are surveyed on an ongoing basis (using mileage award names and an incentive of 100 miles for responding to a survey) and asked what effect flyer miles would have or had have had with car dealers. Forty-nine percent said they’d be more likely to choose a dealer with flyer miles, and 35 percent said they’d be somewhat more likely.
Additionally, consumers can provide verbatim comments which the company passes along to the dealer, often helping resolve any service issues before the factory CSI survey reaches the customer.
Mike Covault, Marketing Manager for Gulf States Toyota (GST) which uses DealerMiles in 55 stores said, “Offering frequent flyer miles gives our customers additional value and helps us to generate new business while rewarding our loyal service customers.”
Another dealer said, “Eighty percent of our customers said miles will make them more likely to return to the dealership for service.” A BMW dealer said they stopped offering service discounts and used only flyer miles, which resulted in a 25-percent increase in paid business over the previous year.
With DealerMiles, after a one time set-up fee, the dealer purchases airline miles at $ .03 per mile in books of 10,000 miles for $300. The minimum purchase is only five books, but Burness noted that most dealers start with 10 to 15 books. Denominations of vouchers are 100, 250, 500, 1,000 and 5,000 miles.
There are now over 400 dealers offering frequent flyer miles from DealerMiles.
And that seems to be only part of the story for automotive dealers. Zevez.com, a company that also specializes in providing services to car dealers by paying their bills with reward credit cards boasts that auto dealers can expect to earn credit card rewards worth $75,000 in travel each year. Until Oct 1 if an auto dealer begins service with http://www.Zevez.com, they will earn a bonus of two free tickets to Hawaii.