Customer retention through loyalty and in-app mobile payments

| by Will Hernandez
Customer retention through loyalty and in-app mobile payments

Anyone who owns a vehicle knows the experience of a trip to the dealership to retrieve your car or truck after it's been serviced can be an exercise in patience.

You walk into the dealership after work only to find several other customers waiting in line to pay their bill. By the time it's your turn to settle an invoice, your stomach is rumbling because it’s past dinnertime.

NcompassTrac, a California-based loyalty program provider, believes it can erase the pain from the car dealership checkout process with an in-app payments feature within the loyalty app the company already provides to its partners who sell high-end cars from BMW, Cadillac, Mercedes Benz and Porsche.

NcompassTrac worked with Total-Apps, a California-based merchant services provider and payments processor, to implement payment acceptance into its loyalty app, Mobile Payments Today has learned.

Ron Vangell, chief strategy officer of NcompassTrac, told Mobile Payments Today in an interview Thursday that customers and car dealerships both asked for the in-app payment capability. The new feature eases the checkout process for drivers while providing dealerships with another way to retain customers in addition to the loyalty program, he said.

"Good customer service isn't enough anymore to build loyalty," Vangell said.

Vangell noted a study that showed when a consumer continues to service their vehicle at the dealership where they bought their car or truck, he or she is 86 percent more likely to purchase another vehicle at that same dealership. That figure plummets to 6 percent if the owner goes elsewhere to service their vehicle.

"These types of metrics for a dealership are frightening," Vangell said. "Those that do retention the best earn the most, and the reason being is a high percentage of repeat business comes at a low cost because you don't have to win the customer."

Different studies exist to back Vangell's argument.

One study from the Harvard Business School and Bain Capital concludes that increasing customer retention rates by 5 percent increases profits by 25 percent to over 95 percent.

Another study, from Gartner Group, shows the value of customer retention and how 80 percent of a company's future revenue will come from just 20 percent of their existing customers.

NcompassTrac helps auto dealerships retain customers with a loyalty program that rewards users for regular vehicle maintenance at a certain location. For example, a car dealership can reward a customer when they arrive at the premises with bonus points and a free car wash.

Loyalty users can apply their points to an invoice much in the same way consumers redeem rewards for airline tickets or hotel rooms. NcompassTrac enables users to redeem points from within the app. To pay for a bill with a credit card, a vehicle owner can either take a picture of the card with their smartphone camera or manually enter the information.

In addition to the loyalty and payments feature in the app, NcompassTrac also provides users with the ability to schedule maintenance and a virtual photo cabinet to store pictures of a driver's license and insurance cards. Total-Apps also gave NcompassTrac the ability to add video checkout with the app, which is available for iOS and Android devices.

At the moment, more than 2.5 million consumers across almost 400 auto dealerships in the U.S. are enrolled in the program. The in-app payments feature is live now, but now available to all dealerships as Vangell said there will be a rolling window for the launch.

Thanks to its partnership with Total-Apps, NcompassTrac has the ability in the future to add more capabilities to help auto dealerships retain customers.

Total-Apps last year launched Twt2Pay, a service that enables Twitter users to buy items using hashtags.

Jason Taylor, executive director and chief technology officer at Total-Apps, told Mobile Payments Today he envisions a scenario where auto dealerships could add Twt2Pay within their social media channels to engage with millennial consumers.

"That allows the customer to interact more," Taylor said. "Millennials are interacting with brands that way and they're going to want to pay that way as well, so we're working with NcompassTrac to add that ability later."

Total-Apps also has the ability to add in-app payments though Apple Pay and Google Wallet if and when NcompassTrac decides to add those options.

NcompassTrac plans to take its loyalty program outside the U.S., and a recent partnership with Harley-Davidson, the popular motorcycle manufacturer with a global footprint, will make that possible in the future. At the moment, NcompassTrac helps Harley maintain a program that enables prospective buyers to fill out identifying information in order to ride motorcycles as part of a demo process.

Topics: Handsets / Devices, In-App Payments, Loyalty Programs, POS, Retail, Trends / Statistics

Companies: Total-Apps Inc.

Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of, he spent two years as the content manager for, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago. View Will Hernandez's profile on LinkedIn

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