Keeping members engaged and capturing long-term loyalty is a constant battle in the retail world. But there's a hidden tool that can make all the difference - car rentals. In this article, we'll explore how retail membership programs can leverage the massive potential of car rentals to drive engagement and increase customer lifetime value.

Revolutionize Retail Loyalty with Car Rentals

Thriving Membership Programs Across the U.S.

Costco and Sam's Club have been experiencing double-digit growth in recent years. Walmart+ has surpassed 20 million members, and Target Circle 360 has attracted tens of millions since its launch. The secret to their success? Practical benefits like free delivery, fuel savings, and member-exclusive discounts that meet daily life needs.However, despite their popularity, keeping members engaged and capturing long-term loyalty remains a challenge. That's where car rentals come in.

The Massive Potential of Car Rentals

A recent CarTrawler report, "Driving Loyalty: Market Insights on Car Rentals & Reward Programs," surveyed over 3,500 American consumers, including 2,000 who had rented a car in the past 12 months. It revealed that 60 million U.S. loyalty program members rent a car every year. Of these, 66% rent cars at least twice per year and spend an average of $404 per trip.This is a large and lucrative market, but loyalty and membership programs have yet to fully tap into it. Only 12% of Americans who rented a car in the past year did so through a loyalty program, leaving a significant opportunity. With total US spending on car rentals projected to reach $44.7 billion by 2028, the potential is clear - and massive. "Driving Loyalty" estimates this to be a $20 billion opportunity for loyalty programs.But offering rentals alone won't guarantee success. Retail membership programs must provide high-quality, high-value car rental options that align with customer needs.

Courting Everyday Renters

Counterintuitively, 24% of car rentals are for everyday purposes such as moving, visiting family, or weekend trips. This is why 63% of everyday car rentals are picked up at local branches rather than airports or major travel hubs. The size and makeup of the everyday rental segment show that there is a consistent demand for convenient rental options.Everyday renters are more value-conscious than those renting for vacation or business travel. 54% rank "lowest prices" as one of the top three most important factors when choosing a car rental, compared to 47% of travel renters. They are also less likely to use an online travel agency (OTA) for their car rental booking, making them ideal targets for retail membership programs.

Leveraging the Power of the Closed User Group

Although retail membership programs may have a large number of members, they are technically closed user groups. This allows them to offer exclusive member-only discounts, points, or cashback sourced directly from car rental suppliers. Programs like BJ's and Sam's Club already capitalize on this advantage, promoting discounts of up to 35% off to their members.This provides clear added value for members who need to rent a car. Accessing this value is a top priority for loyalty program members, as 42% rank member-only discounts in their top three criteria.

Delivering a Positive Experience

When retail membership programs consider integrating car rentals as a reward or expanding their booking options, they must prioritize giving customers the best experience. From searching for the right car to getting the best price and having good customer service, every aspect matters.Personalization is one way to enhance the experience. For example, 55% of car renters under 50 are more likely to choose EVs, while only 27% of those aged 50 and older do. Retail membership programs can use member data to promote EVs to the right segments and highlight other rental types to older members.Integrating flexible payment options is also important. 63% of loyalty program members regularly use a combination of points and cash for redemptions, showing a preference for versatile payment methods.When retail membership programs combine these capabilities with a variety of car rental options, engage everyday members, and leverage their closed user group advantage, they can fully benefit from car rentals as a high-upside reward option that drives engagement year-round.