How do Auto Dealers Benefit from Prepaid Complimentary Maintenance Programs?

Auto dealers are always looking for the next hook, the next “industry secret” that’s going to give them an edge over the competition.

We’ve seen it all, from funny commercials and catchy slogans to giant inflatables and celebrity meet-and-greets. Sure, these tactics might temporarily get people through your showroom door, but in the end, it’s all sizzle and no steak.

Want to know what really sizzles? A dealer-owned complimentary maintenance program.

It’s no secret, Certified Maintenance®Complimentary Maintenance Programs can help franchised auto dealers increase profitability, create more return buyers and double or triple maintenance RO count and service traffic within the first 12 months of ownership.

Don’t believe it? Then check out this webinarto see for yourself how a Certified Maintenance® Program uses an automotive customer retentionapproach toretain your customers ANDfund your future.

But before you do that, take a look at how your dealership can benefit from a Certified Maintenance®Complimentary Maintenance Program.

1. Customer Value: Complimentary Benefits

Let’s start with the customer. When Joe Consumer is looking at purchasing a car, he’s looking at the dealership and what kind of service they provide. Then he wants to know, “What will they provide me after the sale?” That’s where prepaid Complimentary Maintenance Programs come in —the customer is going to see the value of not having to pay for oil changes, tire rotations, and basic maintenance for a set amount of time.

This gives the customer peace of mind, and it also helps them justify the cost of the vehicle. A lot of people are on tight budgets, so they just want to make their monthly car payment and be done with it, without having to worry about additional expenses each time they have to bring the car in for maintenance. A prepaid Complimentary Maintenance Program is a win for the customer —they know they can come in, have their service work performed, and they can be on their way without anyout of pocket expenses.

2. Dealer Value: Control of Service Traffic

With a prepaid Complimentary Maintenance Program, the dealer owns the plan, so the customer has to come back to them, and that’s a value to the dealer. The customer can’t choose to go to a competitor and have the work performed since it’s already provided for by the dealer. It’s a control issue —your dealership remains top-of-mind with car-buyers when they return for service and, later, their next vehicle purchase.

During the first year of ownership, there isn’t much service work that needs to be done other than oil changes. But if you simply say, I don’t make money on oil changes,” and never see those customers during that first year, there’s really no way you’re going to see them down the line when they need tires, brakes, and more expensive repairs because they’ve already built relationships with somebody else. In most cases, everybody has a mechanic or they know a “guy.”

Prepaid Complimentary Maintenance Programscreate a service pipeline, and customers will consistently fill that pipeline at predetermined intervals. In the past, dealers used to rely on warranty work to bring customers in, and then they would sell them maintenance work as well as repairs. This has changed over the past few years. Now, whoever controls the maintenance work, controls the warranty and any manufacturer campaign. While cars are being built better than ever, there are quite a few campaigns around components: air bags, ignition switches, etc. There’s a direct correlation between who controls the maintenance and then who’s going to get the customer back to do all the other work.

3. Fund Your Future: Sell the Next Vehicle™

NADA Data has shown for years that customers who service at the issuing dealership are more than twice as likely to also repurchase. This is because routine service visits build relationships that bridge the gap between the initial vehicle purchase and the next vehicle purchase.

That is the goal of prepaid Complimentary Maintenance Programs —it is setting up a service habit at the issuing dealership to give dealers control of more expensive repairs and future vehicle repurchases. Prepaid Complimentary Maintenance Programs are a gateway to higher profitability in the near future.

Do You Have a Plan?

If you’re still on the fence about prepaid Complimentary Maintenance Programs, ask yourself the following questions:

  • Are you getting value out of whatever plan you have today?
  • Does your current plan make financial sense?
  • Are you tax planning for the future?
  • Do you already own a reinsurance company?
  • Are you taking the benefits?
  • Would you like to hedge your premium back to get a better rate?
  • Is your plan driving customer visits?
  • Are the customers converting to purchase second or third cars?
  • Are you leaving any money on the table?

Bottom line, it never hurts to take a look at what you have and make sure that what you have is really what you have, not just what you think you have.

Ready to discuss how a Certified Maintenance® Complimentary Maintenance Program would be beneficial for your dealership? Schedule time on my calendar to discuss a personalizedretention strategy or register for a webinar to reveal the three profitability buckets of a maintenance-include strategy.