Are KIA steering customers towards real benefits?
22 May 2019
Stacey Lyons

Yesterday it was announced that KIA motors are launching their new KIA Ownership Rewards Program named KORP, promoting that they will be offering ‘huge discounts to old car owners’, providing them with ongoing value, convenience and support.

The program offers KIA owners (of 5 years and over) discounts between 15% and 25% on the cost of servicing and genuine parts, with the discount percentage increasing the older the car is. This discount is available on parts and labour charges, basic maintenance, battery replacement, select suspension and air conditioning parts, brakes and routine service parts, provided the car is serviced at an accredited KIA service centre.

Chief Operating Officer, Kia Motors Nigeria, Sanjay Tatpati says;

“In line with our effort to foster ‘peace of mind’ in our customers and engage them meaningfully to drive affinity with Kia through service programs that speak to them rationally and connect them emotionally to our brand with the implementation of exceptional services, we have added this value-added service, KORP to our service portfolio to drive customer satisfaction at its peak. This underscores our commitment to our brand’s global initiative, the ‘Promise to Care’

KIA claim this program will progressively reduce the cost of maintenance for KIA customers based on the years the car has been in operation, and will keep older vehicles in top condition. I also see this program design as a way to keep KIA customers spending within the KIA ecosystem whilst building a relationship with older car users by providing extra value to ensure they are engaged and satisfied with the brand. This will allow KIA to strategically steer them towards buying a new car from KIA at the right stage of their lifecycle.

Let’s look closely at the benefits this rewards program will bring to both KIA customers and the KIA business:

Benefits to KIA customers:
  • Longer term customers are recognised and rewarded
  • Costs of servicing will be discounted more heavily over time
  • Regular servicing can increase the lifespan of a car and reduce depreciation
  • After sales service provided for longer than 5 years
  • Certainty that genuine parts will be purchased
  • Using KIA trained technicians can reduce service labour time and associated costs
Benefits to KIA business:
  • Increased member engagement over time
  • Increased satisfaction with older KIA cars will increase the likelihood of brand loyalty when it comes to purchasing a new car
  • Ensures genuine parts are being purchased and no loss of revenue to counterfeit parts markets
  • Increased profits and margin from value added services being kept within the KIA ecosystem
  • Increased profits and margin on frequently purchased parts like tyres which are not discounted through the program
  • Barriers built to prevent other service technicians accessing KIA customer base
  • Increased visibility on analytics of customers and their vehicles which includes complaints, and repairs throughout the lifespan of the car
  • Rich customer data a valuable tool for future marketing efforts
  • Greater control over customer service, recommendations and brand messaging provided to customers

Ultimately, this rewards program is designed to retain customers and drive satisfaction and engagement among customers as they move closer to the point of needing a new car. Throughout the customers lifecycle the design of this program keeps maximum profits and customer data within the KIA ecosystem.

It’s clear that the list of benefits this program provides to KIA is larger than to that of the customer, so if this is going to prove successful, KIA have to ensure that the customer is able to access true value with no hidden catches. For example, the cost of servicing pre 25% discount must be comparable to the cost of a competitive non-KIA approved service, and the same goes for replacement parts. Kia must also be very careful when providing recommendations and advice because as soon as a consumer feels they are being misled or pressured to make unwanted purchases or upgrades, they’ll disengage with the program and the brand.

Thus, while the program is modelled to make the ownership experience better, KIA need to ensure that this is upheld, while resisting the urge to guide customers towards purchasing a new car before they are ready. A careful combination of customer service training and data analysis will be the key to the success of this program.

Stacey has a wealth of experience within loyalty, marketing and eCommerce across multiple channels and business models including Boost JuiceModelCo and MyHouse. Most recently, Stacey has been managing the investor, member and retailer communications for blockchain loyalty company EZToken Rewards, as well as taking the lead on designing, developing, implementing and operationalising Resident Rewards, a new member benefits program for Lendlease.

Stacey is a proud pioneer of women in blockchain and attends meet-ups regularly. She built the website and regularly contributes content.

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<a href="" target="_self">Stacey Lyons</a>

Stacey Lyons

Stacey is the Loyalty Director at Loyalty & Reward Co, the leading loyalty consulting firm. Loyalty & Reward Co design, implement, and operate the world’s best loyalty programs for the world’s best brands. Stacey has extensive experience in loyalty, digital marketing and eCommerce with roles at ModelCo, MyHouse and Boost Juice. For the past five years, Stacey has worked with Loyalty & Reward Co clients to design loyalty programs, apply loyalty psychology, develop member lifecycle communications strategies and data capture, reporting and analytics strategies. Stacey co-created the book Loyalty Programs: The Complete Guide, the most comprehensive book on loyalty program theory and practice available. She also presents a number of modules as part of the Loyalty Programs Masterclass run by Loyalty & Reward Co in conjunction with ADMA.

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