How to Start a Car Dealership Referral Program in 6 Steps

Learn how to establish a successful car dealership referral program in just 6 simple steps. Boost sales and customer satisfaction with our expert guide.
Image of author Nick Cotter

By Nick Cotter
Updated Jan 10, 2024

How to Start a Car Dealership Referral Program in 6 Steps
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Imagine the roar of engines, the gleam of freshly waxed cars, and a dealership bustling with eager buyers. You've got the inventory, the expertise, and the passion, but the challenge? Getting more potential buyers through the door.

Now, envision a scenario where your satisfied customers become the driving force behind your dealership's success, spreading the word and bringing in friends, family, and acquaintances. No gimmicks, just genuine trust and recommendations.

Welcome to the world of the Car Dealership Referral Program. In this guide, we're set to journey through the highways and byways of creating a program that accelerates sales and amplifies brand loyalty. Let's gear up and explore how referrals can supercharge your dealership's growth.

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What is a Car Dealership Referral Program?

Simply put, a car dealership referral program is a marketing strategy where your customers become advocates for your brand. They're rewarded for bringing you more business.

"Word of mouth," as it's often called, gets an upgrade here and moves into the realm of strategic marketing.

Car dealership program illustration

So how does it work exactly?

Well, if I've bought a car from your dealership and I have a friend who's on the hunt for wheels, I refer them to your place. If they end up buying from you too, then bingo! I get rewarded – usually with discounts on future purchases or services.

Now don't be mistaken - this isn't just some ploy to sell more cars. This kind of program can boost customer loyalty like nobody's business. Think about it: if I'm getting perks for referring my friends to you, then why would I go anywhere else for my auto needs?

It's also worth noting that these programs are quite flexible and can be customized according to the dealership’s specific needs or goals. Some dealerships might offer cash rewards while others may provide free services or even hefty discounts on future purchases.

Are You Ready for a Referral Program for Your Car Dealership?

Let's dive right in, shall we?

The first thing you've gotta ask yourself is "Am I ready to implement a referral program?" And it's not just about being mentally prepared. It's about having the resources and the strategy in place to make it work effectively.

Does your dealership have a strong customer base?

If you're already seeing success with repeat customers or steadily attracting new ones, then you're definitely on the right track. A strong customer base means that there are people out there who trust your brand and would be willing to refer their friends.

Car dealership customer

Do you have a motivated team?

Now let's talk about your team. Are they motivated enough to facilitate this program? Remember, your staff will be playing an important role here - explaining the program benefits to customers, tracking referrals and following up on leads. So they need to be well-trained and enthusiastic.

Do you have a referral tracking system in place?

Next up: infrastructure! You'll need some kind of system in place to track these referrals and rewards. Whether it's a sophisticated CRM software or just good ol' fashioned spreadsheets, if you don't have a way of managing this data effectively, things can quickly turn chaotic.

Can you afford to pay for the incentives?

And lastly (but certainly not least), do you have attractive incentives lined up? People won't go out of their way to refer someone unless there’s something valuable in it for them too!

Car dealership referral program incentives

So here's the deal:

  • Strong Customer Base: Do you have loyal customers who love what you do?
  • Motivated Team: Is your team ready and excited about implementing this new strategy?
  • Effective Infrastructure: Do you have a system in place to manage all those incoming referrals?
  • Attractive Incentives: Can you provide meaningful rewards that will encourage folks to make referrals?

In essence, setting up a successful car dealership referral program isn’t as simple as flipping a switch – but if you've got these key elements in place, then I'd say you're ready to hit the gas pedal and accelerate those sales!

Implementation Steps for Car Dealership Referral Programs:

1. Understanding Your Car Dealership Referral Customer.

Car dealership customer profile

Let's dive right into the first step, which is all about getting to know your customers.

We're not just talking about their names and what cars they drive – we're going a bit deeper than that. It's crucial to understand their needs, preferences, and how they perceive your dealership.

  • Are they satisfied with the service?
  • Do they feel valued?
  • Would they recommend you to others?

Surveys, feedback forms, or even casual conversations can help you gather this information. Remember, happy customers are more likely to spread positive word-of-mouth!

2. Deciding on the Referral Incentives.

Car dealership incentives

Next up is choosing referral incentives.

Oh yeah! Who doesn't like rewards, right?

But here’s the tricky part: you've got to choose something enticing enough to motivate your customers yet cost-effective for your business. 

Here are some example referral incentives for car dealerships:

  • Monetary Incentives:
  • Cash Bonuses: A straightforward approach where the referrer receives a fixed cash amount for every successful sale that arises from their referral.
  • Discounts on Future Purchases: Offer discounts on future vehicle purchases, parts, or services.
  • Service-Based Incentives:
  • Free Maintenance Services: Offer complimentary services like oil changes, tire rotations, or car washes.
  • Discounts on Service Packages: Reduced prices on service packages or extended warranties.
  • Vehicle Upgrades: Offer upgrades such as tinted windows, leather seats, or premium wheels at no extra charge on their next purchase.
  • Gifts & Merchandise:
  • Gift Cards: These could be for the dealership, gas stations, car washes, or popular retail outlets.
  • Car Accessories: Offer items like branded floor mats, car covers, or sun shades.
  • Dealer Swag: Branded items such as keychains, mugs, T-shirts, or hats.
  • Experiential Rewards:
  • Event Tickets: Provide tickets to local sporting events, concerts, or shows.
  • Test Drive Experiences: Offer exclusive test drives of upcoming or premium models.
  • Invitations to Exclusive Events: Invitations to car unveilings, launch parties, or other dealership events.
  • Loyalty Programs:
  • Points System: Customers earn points for every referral, which can be accumulated and redeemed for various rewards or services.
  • Tiered Benefits: The more referrals a person makes, the higher tier they achieve, unlocking more valuable rewards.
  • Financing and Trade-in Benefits:
  • Reduced Interest Rates: Offer a special interest rate for their next vehicle loan or lease.
  • Additional Trade-in Value: Provide an extra percentage or fixed amount on top of their car's trade-in value.

The key here is balancing customer appeal with budget constraints.

3. Choosing the Right Referral Tracking Platform.

Car dealership referral tracking

Now onto selecting a referral tracking platform that suits your dealership best. This isn’t as complex as it sounds; promise! It’s basically software that helps manage and keep track of referrals - who referred whom and what reward was given out etc., kind of like a digital ledger but cooler.

You’ll want one that’s user-friendly (your staff will thank you), reliable (no lost referrals please!) and customizable (every dealership's unique!).

4. Launching and Promoting the Program.

Alright folks! Time now for some action- launching and promoting your program. Start by communicating the benefits clearly to your existing customers because clarity is king in marketing! Then move onto wider promotional activities- think social media buzzes, emailers or even banners at prominent locations in town- whatever works best for reaching out effectively!

5. Work with your high value customers first.

This one's a bit of a pro tip: start with your high-value customers. They're likely to have a wider network and greater influence, which could lead to potentially higher referral rates. Plus, they’d appreciate the recognition and personalized treatment- it's a win-win!

6. Make sharing your Car Dealership services EASY.

And I can't stress this enough - make it easy for them to refer! Complicated processes are off-putting. Keep it simple – perhaps an online form or even a ‘Refer Now’ button on their account page. The easier you make it for someone to refer, the more likely they will do so.

7. Tracking, Analyzing, and Iterating.

Last but not least is tracking performance. It’s vital! How else would you know if the program is working? Regular monitoring allows early detection of any issues so that timely action can be taken. Also, don’t shy away from making changes based on customer feedback or market trends; remember, iteration is progress!

So there we have it folks - seven steps towards accelerating sales through car dealership referral programs. It may look like some work now but believe me when I say that the rewards are worth every bit of effort put in!

Real World Car Dealership Referral Programs:

Now, let's dive into some real-world examples of car dealership referral programs. I mean, it's one thing to talk about them in theory, but seeing them in action? That's where the rubber meets the road!

Tesla’s Refer & Earn Program

First off, there's Tesla. Yep, you heard me right - Elon Musk’s electric vehicle giant has been running a successful referral program for years now. Owners refer friends via a unique link and can earn rewards like charging credits or even a brand new Roadster! Talk about motivation!

Tesla Refer & Earn Program
Tesla Refer & Earn Program

Hyundai Referral Program

And don't forget about Hyundai. They've got a killer referral program that offers $200 to any customer who refers a friend who then buys a new Hyundai vehicle. The best part? There's no limit to the number of referrals you can make.

Hyundai Refer & Earn Program
Hyundai Refer & Earn Program

3 Unique Tips for Your Car Dealership Referral Program:

I'm about to share three unique tips that could supercharge your car dealership referral program. So buckle up, because this is going to be a ride you won't want to miss!

1. Offer Tiered Rewards.

You've got to make it worth their while, right? Consider offering tiered benefits - the more people referred, the bigger the reward. Maybe it's cash off their next purchase or perhaps exclusive access to new model launches. Whatever you pick, just ensure it's something they'll truly value.

2. Personalized Referral Experience.

This doesn't mean you have to handwrite every thank-you note (although that would be pretty cool). It can be as simple as making sure your automated messages don't sound like a robot wrote them. Sprinkle in some of your dealership’s personality and make sure each customer feels valued and recognized.

3. Leverage Technology & Gamification.

Develop or add to a dealership app so customers can easily refer friends and track referrals. The app can send notifications when a friend you referred buys something. It also updates your reward status automatically.

Car dealership mobile phone app

We can introduce a game-like system for customers to earn points. They can earn points for referrals, test drives, service appointments, or event attendances. Every month, show a leaderboard at the dealership or online. The best referrers can win prizes. This instills a sense of competition and encourages more referrals.

Conclusion

Well folks, there you have it! This is the end of our journey discussing how to accelerate sales using a car dealership referral program. I hope I've been able to shed some light on the stepwise approach that can help breathe new life into your business.

So let's wrap this up, shall we? We started by understanding why referrals are gold in the auto industry. There's no denying that word-of-mouth marketing still holds a lot of power and can indeed drive significant growth for your dealership.

We dove deep into developing an attractive and rewarding referral program, ensuring it’s easy for customers to participate. Remember, simplicity is key here. The easier it is for your customers to refer someone, the more likely they'll do so.

Then came the importance of training your staff well about the referral system. Your team has got to be on board with this 100%, as they play a pivotal role in promoting it and making sure customers understand its benefits.

We also discussed leveraging technology with CRM tools that can help manage these referrals effectively. Trust me when I say this - adopting tech solutions will make your life a lot simpler by keeping tabs on all those referrals coming through.

Finally, we explored how continuous evaluation and improvements are necessary for any successful program – not just yours! It's vital to remain flexible and open-minded in order to adapt as needed based on feedback from customers or employees.

And voila! That wraps up our roadmap to boosting sales at your car dealership via a top-notch referral program.

I genuinely hope you've found value in this guide and feel ready now more than ever before to kick start or revamp your own referral program! After all, satisfied customers who spread positive vibes about their experiences are one of the most effective ways of accelerating sales at any car dealership.

Remember: One good turn deserves another... especially when it comes down to referrals in business!

Keep revving those engines, my friends. Until next time!

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Nick Cotter

Nick Cotter

Founder & CEO
Growann

With over 7 years navigating the intricate realms of marketing, and specifically B2B partner marketing, Nick has forged collaborations with top-tier tech brands, prominent agencies, and some of the industry's foremost B2B publishers and content creators. His deep immersion in both marketing landscapes showcases a trajectory of expertise and innovation. Identifying a significant void in specialized resources, he founded Growann.The aspiration? Deliver unparalleled insights and guidance, carving out a dedicated space where the broader marketing and B2B partner marketing communities can flourish.