Loyalty programs are nothing new. Airlines and hotels have been offering them for decades. Thanks to the smartphone, however, customer-rewards programs no longer are the exclusive domain of large national retailers.

In a Counterman webinar earlier this year, Autologue Computer Systems CEO Jim Franco and TexTalk LLC CEO Brad Duncan made the case for implementing a rewards program, and explained how independent parts stores can get in on the action with relative ease.

As for why parts stores should consider launching a rewards program, here are some of the potential benefits:

Encouraging Future Purchasing

According to Duncan, the overarching goal of a rewards program “is to give your customers one more reason to buy from you.” OK, they already have plenty of reasons to buy from you. But, it never hurts to add another incentive for additional purchases.

Customer Retention

It’s much harder to acquire new customers than it is to retain your existing customers, which means neglecting your current customers can be a costly mistake. An active rewards program that focuses on customer retention can go a long way toward keeping those relationships fresh.

Revenue Boost

“If you have an effective rewards program, revenues should increase because of customers buying more – and more often,” Duncan asserted. A good program should help to keep your business front and center in your customers’ minds.

Competitive Response

With more and more retailers implementing some type of customer-loyalty program, chances are your competitors have one. That’s certainly the case if your local competitors include one (or more) of the national auto parts retailers.     

Customer Appreciation

From cashback credit-card rewards to that free guac you earned for eating large quantities of Chipotle, consumers have come to expect their favorite retailers to give them a little something extra for their continued loyalty. A rewards program is a great way to show your customers that you value their business.

Reach Out and Text Someone

As alluded to earlier, the smartphone has leveled the playing field for smaller retailers that want to offer the same kind of customer-rewards experience that the national retailers do. That’s because the smartphone is more than just a phone with a built-in camera. It’s a digital wallet that – increasingly – is populated with apps for our favorite brands.

During the webinar, Franco and Duncan explained that the smartphone is the focal point of Autologue’s eRewards customer-loyalty software. There’s no email or snail mail involved, and no plastic cards to print out for customers who sign up. By design, all interactions with the customer occur via phone. Franco and Duncan pointed to statistics showing that text messages enjoy a 98% read rate, which means your messaging has a great chance of reaching your customers when you contact them via phone.

“We decided early on that we wanted to communicate directly using the most effective and powerful marketing conduit there is,” Duncan said.

Parts stores can use Autologue’s eRewards to develop a loyalty program for retail or wholesale customers. The main difference is in how the rewards are defined. In an eRewards program for retail customers, rewards are dollar credits toward future purchases, and the “exchange rate” is set by the store. For example, a store might want to offer $5 in rewards for every $100 in purchases made by a retail customer enrolled in the program.

A wholesale eRewards program is structured more like what you’d expect in a frequent-flyer program. In a wholesale program, rewards accumulate as points rather than dollars, based on total purchases or on incremental increases in purchases. The store defines the “points multiplier” – meaning the customer accrues “X” number of points for every dollar they spend. Points are redeemed for reward prizes that are determined by the store.

With eRewards, parts sellers can group retail rewards members into one of three buckets – active, semi-active or inactive customers – and tailor their messaging based on the customer’s status. For example, an active customer would receive a rewards statement, which details their current rewards-program earnings, encourages online reviews and showcases current specials and promotions. A semi-active customer would receive a reminder statement, which shows rewards-dollars availability and encourages return visits. An inactive customer would receive a reactivation statement, which focuses on current specials and promotions to help re-energize the customer relationship.

Duncan described the concept as “loyalty-loop technology.”

“This is what eRewards is all about: managing the customer-visit pie chart, if you will,” he explained. “It’s automated customer retention.”

You can learn a lot more about Autologue’s eRewards software by listening to the on-demand webinar, which you’ll find archived at www.counterman.com/webinars/. Or you can visit www.autologue.com.