Ford revamps customer loyalty points program

DETROIT — Ford Motor Co. is rethinking how it rewards loyal customers, thanks in large part to input from its retail network.

The automaker last week unveiled FordPass Rewards, an app-based loyalty program that awards points for spending money on vehicle maintenance. Ford's last program, Owner Advantage Rewards, was underutilized, available at just 400 of roughly 3,000 Ford brand dealers in the U.S.

Unlike the former program, which placed the financial burden on dealers, Ford will fund FordPass Rewards fully, although officials declined to reveal the projected cost. When it launched in April, virtually every Ford dealer was signed up.

The automaker spent considerable time crafting the program with the Ford national dealer council over the last 18 months. One idea it adopted on the council's recommendation was making points transferable among all dealerships to offer buyers more convenience.

"Our old program worked, but it didn't have the reach, flexibility and engagement from our brand to make it successful," Jason Sprawka, Ford's director of U.S. customer experience, told Automotive News. "The dealers made this program better. They challenged us to redesign it so that it was more customer-centric."

Everyone who downloads the FordPass smartphone app and connects it to a new vehicle will get 42,000 points — a value of about $210 — which is enough for three oil and air-filter changes, Ford said. Customers who purchase a certified pre-owned Ford will receive 11,000 points. They then earn 5 percent for every dollar spent on vehicle maintenance and service and can bank the points toward their next purchase, including buying or leasing a vehicle.

FordPass Rewards is at the heart of the automaker's drive to boost customer retention. While Ford traditionally has the strongest brand loyalty in the industry, according to IHS Markit data, it wants to improve those numbers to help dealers increase profits. Today, just 52 percent of Ford's new buyers come back to the dealership for their first oil change.

"Right now, we need to take care of the customers we have," said Elena Ford, the automaker's chief customer experience officer. "It's like at a restaurant. If the service is lousy, you're not going to go back, even if the food was good. It's part of keeping them in the Ford family."

Ford benchmarked a number of nonautomotive loyalty programs while developing FordPass Rewards, including programs from Delta Air Lines, United Airlines and Marriott International.

Ford, citing internal data, said the auto industry has traditionally scored poorly for how it rewards customer loyalty.

"All we want to do is do a better job taking care of our customers," Sprawka said.

Handing out an initial burst of points should entice buyers back to the dealership, Sprawka said, but the company hopes customers will choose to spend money on smaller service items in the hopes of banking points for future big-ticket items, such as a brake repair or a vehicle purchase.

"It's like in the airlines business," he said. "If you have a small flight to Florida, you're probably going to look at your points and save those for a big family trip to Hawaii."

One of the failings of Ford's former rewards program was not giving customers a reason to save, Sprawka said.

"They weren't really locked into the dealership," he said. "They'd earn a few points on an oil change, but they just spent it on the next oil change. It just became a discounting cycle. They weren't growing their points and staying loyal."

Sprawka said Ford later will offer ways for customers to earn points at a faster pace than simply following the routine maintenance schedule. It's also exploring ways for individual dealers to purchase points that they could then give as incentives to attract customers.

FordPass Rewards is one of a number of initiatives Ford has launched to improve the customer experience, including redesigned call centers and pilot programs for a mobile service network, easier lease renewal and new types of showrooms. Although officials wouldn't disclose details, they said Ford is doubling its spending on customer experience to improve its standing among rivals such as Toyota.

Ultimately, officials said, if customers have a positive experience, they'll not only stick with the brand but also recommend it to friends and family. That's another way they think the rewards program can help.

"We're the No. 1 owner loyalty brand without FordPass Rewards, but we're going to be better because of it," Sprawka said. "They're not revolutionary ideas, but they're steps to make the experience better."