3 simple strategies every car dealer can use to build a customer referral program

Posted by Meg Bernazzani on August 7, 2018

Customer referral programs drive sales and enhance reputations

Over the past several decades, customer advocacy has been a cornerstone of car dealers’ marketing strategies. You might call customer referrals “word-of-mouth” leads or even bird-dogs. No matter what you call them though, referral programs can help you leverage your biggest assets: your customers.

Here are three referral program strategies that help encourage your happy customers’ continued advocacy while increasing your dealership’s profitability and traffic.

Offer a variety of referral incentives—not all advocates are motivated by money

Successful Canadian car dealers strive to provide the best possible customer service—they know that each prospect who strolls into your showroom, takes a test drive, and signs a bill of sale could refer their dealership to friends, colleagues, and family. And, the same holds true for their service customers.

Because only 38% of customers always share positive experiences, referral programs are a crucial way that dealers can incentivize customers to share their good experiences. Yet many car salespeople find it challenging to ask for referrals. Instead of offering a cash “bird-dog” payment, you can offer alternative incentives, like:

  • One monthly car payment covered for every referred sale
  • A “pay-it-forward” discount to the referred buyer
  • Discounted repair work, parts, or maintenance services like tune-ups or oil changes
  • Travel vouchers or prepaid vacations
  • Charitable donations in a customer’s name

In addition to incentives, some car dealers also publicly thank their customers on their social media channels for a positive testimonial on a review site, or publish a thank you letter on their website to acknowledge positive feedback.

Manage your referral program online

Many dealers are turning to online programs to help manage their referral programs and reward customers for recommending family or friends in the market for a vehicle. Using online referral programs can help you automate the reward process and identify champions in your CRM system. Tracking and promoting online referrals by customer also gives you opportunities to generate excitement and engagement online for testimonials, service referrals, and closed referral sales.

Establish a local automotive referral network

Referrals from other trusted industry professionals are an easy way to bring in more customers—people prefer to buy from people they like and trust. Reach out to noncompeting automotive organizations in your area, such as:

  • Insurance brokers
  • Car detailing shops
  • Collision centres
  • Car rental services
  • Aftermarket accessories stores

You can even incorporate your network partners into your incentive program, and offer product and service prizes as alternatives to bird-dog cash payouts. By building a “power team” of trusted automotive companies in your area, you can boost referrals and, ultimately, increase your sales.

If you are looking to drive more traffic to your dealership, strengthen your reputation, and generate more sales, building a customer referral program, which can be easily communicated to customers, is a great start. A successful referral program will encourage your happy customers to tell their friends, so you can acquire more loyal customers. With an army of champions, your dealership is sure to see sales grow over time.

Topics: referral program, referrals