Case Study: Is a Loyalty Program Right for Your Shop?

Aug. 1, 2020

In a rare dual-case study, two operators talk about why loyalty programs can be right or wrong, depending on the business.

When it comes to customer retention, many quick lubes go with loyalty programs to reward their customers. The more times a customer visits your shop, the faster they get an exclusive reward. Take Express Oil and Tire Engineers, for example. The franchise has a company-wide loyalty program that aims to reward its loyal customers with deals every time they return, says Josh Henderson, executive vice president of marketing for Express Oil.

But one operator found that loyalty programs don’t work for everyone. Mark Nofer, owner of Quick Change Premier Lube and Maintenance, says that retaining new and current customers depends on the customer base you serve, and his circumstances led him to rely on other tactics. Here’s how both operations describe their efforts to retain customers.

The Challenge

With an average population of about 5,000 people in a small, rural area of Ohio, Nofer says loyalty programs aren't the best way to do business. In the bigger cities, there’s a lot more fierce competition. And that’s the case for Express Oil and Tire Engineers. All of the company's locations are targeted throughout the Southeast, with some in Arizona, too. Most of these locations are within more populated suburbs and city areas and face a lot of competition.

Nofer’s small independent operation has had to rely on reputation to draw in customers. Before Nofer took over the business in 2010, the shop had misleading rumors spread around by competition, and this was something Nofer had to overcome. A loyalty program alone wasn’t going to do the trick. In fact, Nofer had tried using loyalty programs before, but it didn’t help as far to draw in new customers.

The Solutions

Providing a Valuable Program

In 2013, Express Oil and Tire Engineers officially launched their company-wide loyalty program. Like many loyalty programs, loyal customers earn points each time they receive services, where they end up earning enough points to receive a discount on a different offer on services. All a customer has to do is sign up on the company’s website, and the points will start racking up.

Giving a Convenient and Transparent Experience

While the goal was to retain loyal customers, Express Oil also wanted to give its loyal customers a one-stop platform to access their customer information and vehicle history at the click of a button.

When a customer signs up for the loyalty program, they are also signing up for their own Express Oil profile, complete with their VIP Reward Points, records of previous services, even reminders on when your vehicle is due for a service. Customers can also easily schedule their services through the online platform, even through the company’s app on their phone.

Providing Convenience

With relying on the shop’s reputation, Nofer wanted to make sure convenience was stressed to the max. For instance, the shop doesn’t take appointments, which may sound like the opposite of convenience, but it’s not in the slightest. The shop is pretty flexible as far as taking appointments, which is on a first-come-first-served basis. In Van Wert, the only other quick lube that is first come, first served is Walmart. That makes his shop stand out, and Nofer says it’s better for business overall.

Selling Only What’s Needed

Like any honest shop, you’re only going to sell what the customer needs. And to promote this honest image in the shop, Nofer decided to eliminate the items that aren’t deemed necessary. All of the usual boutique items, like air filters and lights, were just extras. Nofer chooses not to sell them in his shop.

The Aftermath

Since implementing the loyalty program in all of Express Oil’s operations, Henderson says having the online platform in general has been the most successful part of the loyalty program. The convenience aspect of the program was the biggest customer retention tool.

With the stingy rumors making a subtle impact on business before he got there, Nofer was able to turn it all around. He says that about 70 percent of the time, new customers come back to his shop for his services.

The Takeaway

When it comes down to deciding to add a loyalty program into the mix, it comes down to circumstances. In other words, how you retain customers depends on the location you’re in and your overall customer base. For both businesses, retaining customers comes down to convenience. It’s all about how you offer the two that makes the difference.

“Customer retention is a lot bigger than just a loyalty program,” Henderson says. “Give them the best customer service experience and that’s the best retention tool you can have.”

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Courtesy of SpeeDee Oil Change & Auto Service
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