Personal perks drive dealers to Scotiabank

An ongoing incentive program won't encourage a consumer to choose your automotive financing plan over your competitor's, but you can reward the loyalty of the dealers who recommend the plans. The Scotiabank Dealer Finance Rewards program did just that, and it paid.

An ongoing incentive program won’t encourage a consumer to choose your automotive financing plan over your competitor’s, but you can reward the loyalty of the dealers who recommend the plans. The Scotiabank Dealer Finance Rewards program did just that, and it paid.

The goal

The goal of the program was to increase market share for Scotiabank’s automotive finance products. Scotiabank wanted to attract new dealers and reactivate those who might be using other financial institutions.

‘We’re really interested in supporting the dealers across Canada and providing them with incentives to do business with us,’ says Chris Stager, director of product management for Scotiabank’s Automotive Finance and Indirect Lending division in Toronto. ‘We are the number-one dealer retail finance provider in the automotive and recreational vehicle industry. Obviously we got to number one by listening to our customers, and this was the kind of program they were looking for.’

The strategy

The Scotiabank Dealer Finance Rewards program was designed to reward automotive, RV and marine dealers and dealer finance managers who booked business with Scotiabank. By signing up, dealers earn points for each booking and can redeem those points whenever they want through an online catalogue that offers merchandise, travel and lifestyle gifts, including such luxuries as a personal trainer or a personal chef service. The catalogue offers 650 items.

Anne Turnbull, a senior consultant at performance-improvement company Maritz Canada in Mississauga, Ont., worked on the program for Scotiabank. She explains that, ‘there have been other programs in the industry that offer maybe a one-month or a two-month kind of a contest where dealers can earn rewards for signing up new customers, but this program was very well received because it is ongoing.’

Scotiabank ensured that its program was easy to participate in and manage (all points are tracked in one place online, for example) and that everyone has the opportunity to earn.

Scotiabank would also be able to leverage the incentive program as a marketing tool. Says Stager, ‘instead of traditional sales, we’ll provide incentives by having double rewards points if there’s a special on. Sometimes we’ll offer double rewards.’

The strategy fit well into Scotiabank’s overall marketing, which includes other long-term incentive programs such as the Visa Gold Rewards system for loyal Visa customers. In terms of branding, ‘it’s obviously consistent with Scotiabank’s commitment to our customers. We want to help our dealers,’ Stager says.

The execution

A brochure went out to dealerships in January 2002 informing financial officers about the program. Dealers then had to sign up at the program’s Web site in order to participate. Ongoing communications are handled through faxes and visits from Scotiabank representatives. Participating dealers have a chance to win a $3,000 travel voucher once a month in a random draw. ‘Even if they don’t get a lot of deals, they still get a chance to win a trip once a month. It just takes one ballot to win the trip,’ Stager says. Scotiabank has produced posters to advertise this part of the offer.

So far, popular rewards have included DVD players, coffee makers, cordless phones, cameras, garden tools and restaurant gift certificates.

The results

As of December, one year into the program, Scotiabank’s market share had gone from 21% to 34% and continues to increase. A survey found that 80% of dealers rate the program from ‘good’ to ‘excellent.’

The program attracted 3,000 participants spanning 70% of dealerships in the country.

Rob Ross, business finance officer at Mazda Muskoka in the Muskoka region of Ontario has already earned a bike, a digital camera and a CD player. He’s now saving up for a printer.

‘It’s a good motivator. If I’m looking at a deal and I have two financial sources and one is Scotiabank, the program would tip me off to go to them. But I still look at the rates for everybody. If their rate was higher, I would go somewhere else.’