Aeroplan The test ground for what Futura and Aeroplan are trying to accomplish are the "dealership clusters". Burrard Street (Kits district) in Vancouver, along Don River east of downtwon Toronto, Heritage Meadows Road in Calgary or in my own city on Broad Street where 8 dealerships are in a cluster.
Here's where Aeroplan will prove itself. If all dealers adopt the Aeroplan loyalty program then there's no competive edge. But it's not about competition maybe not even about loyalty as most have come to associate such programs in the past. This is a new way of thinking.
Aeroplan says, that its members will contribute to a dealership's 'incremental" sales (see below) And that's all what is required to increase revenues. Service customers become the focus and the frequency thereof.
(Vehicle purchase every 3-5 years, vehicle service every 3 months-Graham Farrell-Futura June 2011)
It's not about one dealership competing against another using Aeroplan. The dealerships already compete with one another using their own marketing program for decades. When first approached, most car dealers will think in terms of obtaining a competitive advantage over other dealerships using Aeroplan. They may also have some idea of securing customer loyalty a program like Aeroplan should bring. While true to an extent, what Futura is trying to accomplish is something different.
The strength of the Aeroplan program is promoted against the "national average". Club Members will spend more at car dealerships to service their cars than will the regular Canadian average. The "spending power" of Aeroplan members is emphasized, who "tend to maintain their vehicles well".
If all car dealers in a cluster have Aeroplan signage, it will not seem odd. It would mean they are all enjoying greater revenues from service customers, backed by the power of Aeroplan Members. The concept of "loyalty", as we come to know it over the years, morfs into something different.... of engaging the already loyal customer even further.
Futura will require top salespeople in the various territories to carry the message. Critical service data from car dealerships will be required to back-up the sales pitch. I think some believed that car sales will be the driver for Aeroplan miles and in turn Futura's revenues.
I don't have the breakdown between car sales and car service contributions to Futura's revenues. Maybe management could shed some light on these stats. I have a gut feel most of the reseller revenue comes from car service. Futura's revenues may be growing but not to expectations some may have had.
I too had higher expectations, mainly because the first thing which comes to mind, are car sales, and the 5000-15000 Aeroplan miles earned in a single transaction. I thought, wow, by now Futura should have $5 million in revenue not $2 million. Maybe I was somewhat naive to think this way. Revenues will increase steadily for Futura and by the shear volume of car dealers and auto service centers, I hope see profits in the not too distant future.
Some of the incremental benefits the Aeroplan program plans to achieve with car dealers:
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Attracting new customers for test drives and encouraging referrals
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Up-selling customers on models and options during the vehicle purchase process
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Increasing sales in your Business Office (extended warranties, rust proofing, alarm systems, tinting, tire protection)
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Capturing more discretionary “customer pay” spending (tires, brakes, oil changes) during the warranty period
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Reducing the number of service customers who defect from the dealership after the warranty expires
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Re-engaging lapsed service customers