Pump Up Your Service Department with Pre-Paid Maintenance

The Sit­u­a­tion:

In the past few years, the Ser­vice Depart­ment has become a way to not only dri­ve reten­tion but also cap­ture the most cov­et­ed prize in any busi­ness: cus­tomer loy­al­ty. In good times, and in bad, the prof­it mar­gin from new-car sales is like­ly over­shad­owed by that of ser­vice and parts. So the ques­tion deal­ers are ask­ing is: What can we do to pro­mote Ser­vice busi­ness? The answer could well like in pro­mot­ing “cap­tive ser­vice” at your deal­er­ship!

The Back­sto­ry:

Auto deal­er­ships are always look­ing for ways to bring their cus­tomers into the ser­vice lanes, typ­i­cal­ly the bread-and-but­ter of deal­er­ships, but they have felt the squeeze from a reduc­tion in war­ran­ty and recall work as cars have become more reli­able. Com­pe­ti­tion from inde­pen­dent ser­vice providers such as quick-lub shops and tire out­lets has also hurt. So the key has become wrapped around cre­at­ing “cap­tive ser­vice” around what is termed “deal­er-cen­tric” pre-paid ser­vice plans.

OEM Main­te­nance Plans ver­sus Deal­er-Cen­tric Pre-Paid Plans

  • Crit­i­cal to a pre-paid plan for your deal­er­ship is “cap­tive ser­vice”.
  • OEM plans work fine for the automak­er, but they are not cap­tive for the deal­er.
  • Deal­er­ship are now choos­ing to offer deal­er-cen­tric PPM prod­ucts offered through numer­ous com­pa­nies – see­ing an expan­sion nation­wide.
  • Pre­paid main­te­nance (PPM) plans and cour­tesy ser­vice pack­ages have start­ed to blos­som as cus­tomer reten­tion tools for automak­ers and indi­vid­ual deal­er­ships.
  • Regard­less of the name behind the PPM, tai­lor-made pro­grams now allow the ser­vice man­ag­er to be a key play­er in deal­er pric­ing.
  • As a result, Pre-paid main­te­nance plans and cour­tesy ser­vice pack­ages have start­ed to blos­som as cus­tomer reten­tion tools for automak­ers and indi­vid­ual deal­er­ships.

What Your Deal­er Man­ag­er Needs to Know Today:

  • Reten­tion often begins with a sim­ple invi­ta­tion to vis­it your ser­vice dri­ve every 5,000 miles or so. And who knows, it might even be the start of a long-last­ing rela­tion­ship.
  • Tra­di­tion­al ser­vice depart­ment loy­al­ists tend to be 45 or old­er.
  • Retain­ing “deal­er-averse” dri­vers aged 35 and under, or mil­len­ni­als, is key to the suc­cess of PPM plans.
  • A recent study of vehi­cle own­ers who had their car ser­viced at the deal­er­ship over the course of the pre­vi­ous 12 months, found that 56 per­cent of those are like­ly to return to the deal­er­ship for ser­vice after their pack­age expires.
  • That fig­ure climbs to 62 per­cent for those who used their plans for all main­te­nance dur­ing the term of the con­tract.
  • While pre­paid and com­pli­men­ta­ry main­te­nance pro­grams have proven effec­tive at keep­ing cus­tomers com­ing back to the ser­vice lane, 86 per­cent of dri­vers who return for reg­u­lar main­te­nance are also more like­ly to pur­chase their next vehi­cle from the same deal­er­ship.

Daryl K. Tabor, writer of the arti­cle, empha­sizes that it is impor­tant to find the right pre­paid main­te­nance pro­gram for your deal­er­ship among the new­er plans that offer so much more than old­er lim­it­ed plans avail­able to auto deal­er­ships – and allow­ing you to set ser­vice inter­vals, estab­lish time and mileage para­me­ters and offer vir­tu­al­ly any ameni­ty as part of the pack­age. Read the full arti­cle here.





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