Developed as a proposal during my PGDM @ Symbiosis,Pune
Text of Customer loyalty program for chevrolet
1. Customer Loyalty Program [CLP]Design to Introduce a Customer Loyalty Program for Chevrolet car services within the domestic segment Bharath KarthikeyanPGDSSM(2011-12)
2. Objective Loyalty programs differ from promotions that they are ongoing campaigns for targeted customers. What you want to do with a loyalty program is to select and reward your most-valued customers 3. Loyalty in an automobile industryis it a trap? Cars are now almost a commodity, and carmanufacturers have a problem. It might almost be fair to say that the most noticeablepoint of differentiation between competing, similarmarquees is the dealer who sells the car. Certainly, thatseems to be the area where most can go wrong, andmost complaints arise. So much depends on the way the car is sold andparticularly the way that the after sales contacts andservice are carried out. Its quite possible that its for this reason that researchshows less loyalty to dealers than to manufacturers. 4. Objective of having CLPs for Chevrolet service centers Helps gain customer satisfaction and loyalty tothe brand as a whole. After sales service is one among the prime factorscar buyers consider while buying. People in India relate to Chevrolet with a trendyoutlook and the company has huge potential tooffer Customizability services for its product. There are no such initiatives by any otherautomobile company in India for suchcustomization options. 5. Well to just KISS 6. CRMs major milestone addressed: Make a customer feelunique and special !A customer can customize a 4 Lac car to something trendy looking like thiswithout void of any warranty as services are rendered by the parent companyitself 7. Indian Automobile industry and Chevrolet Car Buyers(at least in India) seem to preferimported vehicle brands India is one among the rapidly growingDeveloping nations and most of thedispensable income is concentrated on thedemography segment of age: 25-40 8. Types of Loyalty Programs AppreciationsGiving customers more of a companys product/service. RewardsGiving customers rewards unrelated to a companys product/service PartnershipMarketing to another companys database and allowing loyal customers tochoose their rewards from either company. RebateGiving customers money back when they buy more. AffinityBuilding a lifetime value relationship with a customer based on mutualinterests and not on the use of rewards. CoalitionTeaming up with different companies to share customer data to jointlytarget a customer demographic. 9. Customer Loyalty Excellence Design of Services Operation Execution with appropriatetechnological backing 10. Ensuring Customer Loyalty 11. Objectives for the Chevrolet Car Services CLPChevrolet has been a relatively new entrant in the field of automobiles inIndia. 12. CLP techniques 360 degree view across all channels Personalized and perceived customer value Actionable feedback / Understanding customerneeds Customer win back/ Improved customerretention / reduction in customer attrition /enhancingcustomer acquisition Promoting cross-selling Achieving business goal 13. TechnologyAnalysts have indicated that the success of loyalty programs is influenced by the choice of technology.Given a differentiating Loyalty Program concept, a lot of challenges relate to the choice oftechnology. A good CLP concept, to succeed, needs appropriate technological backing. 14. FAQs with CLPs Do Loyalty Programs go beyond cost of doingbusiness? Do Loyalty Programs offer any competitivedifferentiation? Do Loyalty Programs lead to customer loyaltyor are limited to customer satisfaction only? Do Loyalty Programs influence purchasebehaviors or are taken for granted? Do Loyalty Programs influence margins 15. Key Advantages of Having a Loyalty Program It encourages consumers to concentrate their purchases in your company so thatthey can reach a reward faster. It increases switching cost so that consumers who have already earned pointsthrough your loyalty program are less likely to jump ship to a competitor. Compared with other promotions such as price discounts, a loyalty program incursdelayed promotional cost, because consumers make purchases first and getrewards later only after they have accumulated enough points. Related to the above cost issue, not all points earned through a loyalty programtranslate into reward costs, as there will always be some consumers who neverreach the reward threshold or who never redeem their points. A loyalty program offers a way to capture consumer transaction history and canlead to more in-depth understanding of your customers. If you have a sizable business such as an airline, a loyalty program can be arevenue source as you can sell program currency (e.g., miles, points, etc.) topartner businesses. A loyalty program, when properly designed, can make your best customers feelappreciated and become more loyal. 16. Key Disadvantages of Having a Loyalty Program A loyalty program can be expensive to implement, unless you are doing abasic punch card based buy 10 get 1 free type of program. Also unlikeone-time promotions, a loyalty program is typically a long-termcommitment and therefore needs financial support over time. Loyalty program points can represent significant financial liability and mayincrease risk to your business. (Note: This can be alleviated by setting anappropriate point expiration policy.) Your best customers may like you enough to want to buy from you anyway. So having a loyalty program may be giving away your profit marginunnecessarily. My own research shows that existing heavy buyers barelychange their behavior after joining a loyalty program. The long-term impact of a loyalty program on true customer loyalty is notwell-established. Consumers may join your program purely for thefinancial incentive and will abandon you if your competitor offers a betterprogram.