Vehicle Mileage Loyalty Program Using Odometer Data
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Solution Overview
Problem
Conventional co-branded credit card loyalty programs primarily reward customers for purchases and air travel, failing to incentivize the use of other types of goods or services, and do not encourage regular servicing of vehicles at manufacturer-authorized locations.
Innovation Solution
A loyalty program that awards points based on the number of miles driven, where the odometer reading is recorded during servicing at authorized locations, allowing for the calculation and conversion of mileage into loyalty points, thereby incentivizing service at manufacturer-authorized dealerships.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If conventional co-branded credit card loyalty programs reward only purchases and air travel, then frequent purchasers and travelers are attracted, but other types of customers are not enticed and vehicle servicing at authorized locations is not encouraged
Solution Approach 1:
The loyalty program is extended to serve multiple functions: it continues to reward traditional purchase and air travel activities while adding a new function to reward vehicle servicing at authorized locations. This multi-functionality allows the program to attract diverse customer segments including automobile owners, not just frequent purchasers or travelers.
Solution Approach 2:
The program segments customer engagement into distinct categories: traditional retail purchases, air travel, and vehicle servicing. Each segment has its own reward mechanism, allowing targeted incentive strategies for different customer behaviors and preferences.
2Quantity of substance
If loyalty points are awarded based on vehicle mileage, then cardholders earn additional points and dealership profitability increases, but the program complexity increases due to odometer tracking and verification requirements
Solution Approach 1:
The system utilizes the vehicle's existing odometer as a self-reporting device that automatically provides mileage data. The odometer reading is captured during routine servicing transactions, eliminating the need for separate mileage tracking devices or manual logging by customers.
Solution Approach 2:
The authorized service location acts as an intermediary that facilitates data capture. When customers service their vehicles at authorized locations, the service provider records the odometer reading and transmits this information to the loyalty program administrator, simplifying the tracking process.
3Reliability
If vehicle servicing is incentivized through loyalty points, then servicing at authorized locations increases and proper maintenance is ensured, but customers may incur additional time and travel to reach authorized dealerships
Solution Approach 1:
The program establishes authorized service locations in advance across various geographic areas, and pre-configures the loyalty reward structure to make these locations attractive to customers. This preliminary setup ensures that convenient service options are available before customers need to service their vehicles.
Solution Approach 2:
The reward parameters (points per mile driven) are adjusted to compensate customers for the time and travel costs incurred when servicing at authorized locations. By offering sufficient incentive through loyalty points, the program offsets the additional time investment required.
Data Source
AI summary
Embodiments in accordance with the present invention relate to incentive programs awarding loyalty points based at least in part upon the number of miles driven in a motor vehicle. In accordance with one embodiment of the present invention, reward points can be earned by having the vehicle serviced at authorized locations, such as a dealership. At the time of servicing, the authorized location notes the current vehicle odometer reading, and this odometer reading is communicated to an administrator of the loyalty program. The odometer reading in turn serves as the basis for calculating the number of miles driven since the last authorized servicing, and for conversion of this mileage figure into loyalty points to be credited to the owner, lessor, or renter of the vehicle. In this manner, a manufacturer of an automobile or other sponsor of a co-branded payment card can provide incentives for servicing only at manufacturer-authorized locations such as dealerships, thereby enhancing profitability of the dealership and promoting relations between manufacturer and dealer.