ALBANY, N.Y. — More than half of auto dealers have customer loyalty or rewards programs in their dealerships, and another 20% have plans to implement one soon or considering doing so, according to the results of a survey conducted by Auto/Mate Dealership Systems.

Additionally, dealer respondents weighed in on what they believe are the top factors that contribute toward building a loyal customer base.

"The vast majority (85%) of auto dealers believe that providing good customer service is the key to customer loyalty,” said Mike Esposito, president and CEO of Auto/Mate. “But, in my opinion, the survey results reveal a lack of understanding as to how that excellence in customer service is achieved."

Esposito said customer service training can only go so far and that focusing on creating a great place to work and keeping employees happy is the most important factor in creating a loyal customer base. "Employees are the frontline of your brand; they are responsible for all customer transactions. Employees have to love your company before they love your customers," he said.

Yet, a little more than a third of survey respondents chose "Ensuring that our employees are happy and enjoy their jobs" as a top contributing factor for customer loyalty.

Auto/Mate's spring survey was conducted in March and April and received more than 120 responses, the majority of which came from dealership principals and managers. The survey asked the following two customer loyalty related questions: “Do you have a customer loyalty or rewards program for your customers?” and “What three factors do you believe contribute the most towards building customer loyalty?”

To the first question, 54% of respondents said “Yes,” 26% said “No” and 14% said they were considering implementing a customer loyalty or rewards program. Another 5% said they were planning to implement one very soon.

The factors respondents identified in the second question were as follows:

  • Ensuring our employees give good customer service: 85%
  • Offer service discounts and coupons competitive with local repair shops: 55%
  • Keeping website content updated and useful: 38%
  • Ensuring that our employees are happy and enjoy their jobs: 36%
  • Good reputation management program: 30%
  • Marketing/salespeople outreach: 26%
  • Customer loyalty/points program: 22%
  • Offer the lowest price: 17%
  • Good social media program: 11%
  • Customer loyalty isn't very important: 0%

According to a 2013 Forrester Research report, 70% of executives said that customer retention was the No. 1 goal for their customer loyalty programs. The study also found that while nearly half of customers do enroll in loyalty programs that are offered, slightly more than a third of those customers redeem rewards. This means that only 16% of all customers take advantage of such programs. The research also suggested that the key to customer loyalty is the ability to keep customers engaged.