It's difficult to determine the program's exact financial impact on the retailer's bottom line, but the dealership sold 14,000 new and 13,000 used vehicles in 2019. Beans Gilbert says management knows it helps sales.
For the past 10 years, for example, customers have been able to double their available points for redemption in December and use them as a down payment on a vehicle purchase, giving the group's year-end sales a boost. Last December, Fred Beans sold 3,054 vehicles — a one-month company record. Out of those sales, 1,035 customers redeemed points, Beans Gilbert said.
"Recently, a customer who was sitting in front of us at my daughter's basketball game told me he'd just bought his ninth car from Fred Bean in December," she said. "He had earned 1,000 points, which gave him $2,000 to put down on a car. He said it was like getting free money."
Stories of sustained loyalty to the group are common. Customer Art Ehlo applied $2,000 in points to his down payment on a 2019 Ford Fusion. It's the 18th car he's purchased from Fred Beans since the 1980s.
The number of customers who've redeemed points (there's a $2,000 cap on redemptions) has steadily increased. From 2016 to 2019, for example, redemptions jumped by 62 percent to 6,544 customers.
When customers redeem points, dealerships get reimbursed from a reserve account. The stores fund that account by contributing $100 for each vehicle sale and a percentage of customer-pay service work. The dealerships contribute another $50 for each car to cover Nucar's fees and the free oil changes.
Sales commissions are based on the full price of the sale, not the price minus the points redeemed.
"Since no one's commission gets penalized, salespeople stay motivated to keep talking up the program with customers," Beans Gilbert said.
The program now includes free rotating monthly gifts from local merchants and discounts from about 175 local businesses. Free member-appreciation events include movie nights, minor-league baseball games, skating outings and pictures with Santa during the holidays.
"We recently took 450 customers to see a Star Wars movie," Beans Gilbert said. "There's nothing more gratifying than renting out a theater and having customers come over and hug me and my dad."
The company last summer celebrated the redemption of the 10-millionth point. The prize? A year's worth of car payments. Customers who redeemed points in August — 546 in all — qualified for a drawing. The winner was a teacher who'd purchased two cars from a Fred Beans dealership last year.
A rewards program takes time to gain traction because of the length of car-buying cycles, Beans Gilbert noted. And the rewards must be meaningful enough to interest customers.
But in the end, loyalty programs are worth the effort because it's easier to sell a car to an existing loyal customer than to someone new.
"My dad always says you want people to be apostles and disciples for the business, and that's what this program does," she said. "The three most important words you can hear from a customer are, 'I'll be back.' And this program helps ensure that."
