What Can We Learn From The GM Maintenance Program?
The Purpose of Complimentary Maintenance
GM recently announced a reduced offering in Complimentary Maintenance incentives because free scheduled maintenance and warranty coverage do not rank high as a reason to purchase a vehicle among buyers of non-luxury brands.
This recent pullback by GM goes to prove that the manufacturer doesn’t understand that providing Complimentary Maintenance has nothing to do with selling the first vehicle and everything to do with building relationships with customers that sell the second and third vehicle.
Contributing Factors to Maintenance Reduction
It is my opinion that these factors have also contributed to the reduction of the GM Maintenance Program:
- GM represented to consumers that they would receive 24 months of Maintenance coverage (up to 4 visits total) but denied claims if the oil life monitor read 40% or more life remaining on the customer’s service visit to the dealership.
- GM did not provide service campaigns or follow-up with consumers to ensure that consumers utilized the program at the selling dealership.
- The initial GM program did not provide or enforce to franchise service centers a monitored process to ensure that the services were done in a reasonable time frame and customer satisfaction level that would exceed customer’s expectations. This led to many customers defecting for service visits 2, 3 and 4 as cited in the press release.
- GM provided two visits per year to the consumers but when ranking the dealership’s customer retention levels they counted one visit in a 12 month period as 100% retained.
How GM Maintenance Program Could Be Improved
- Complimentary Maintenance is designed to focus on building long-term relationships via service retention. Therefore, it’s important to focus on the customer experience and follow through with the services you initially stated you would provide (don’t sacrifice integrity to save money in the short-term).
- Service Reminders play an important role in Complimentary Maintenance programs because what customers really want is for you to eliminate the worry from their lives altogether. Service Reminders let the customer know your dealership is in control and they don’t have to monitor routine maintenance visits.
- Monitor the time on services being performed. If your dealership is home to the 2-hour oil change chances are customers aren’t going to return for the 2nd, 3rd or 4th visit.
- Data is key. Being able to measure retention accurately can make all the difference in the effectiveness of your program. This means having the right software in place to track how many customers repurchased from your dealership? Which customers have defected or have not returned for service? And how much money is your Complimentary Maintenance program bringing in each month? How about each year?
The underlying issue with GM Maintenance is not that a Maintenance Included approach is unsuccessful, but that the strategy was unsuccessful and poorly managed. Rather than using Maintenance Included as a long-term retention process as it’s intended, GM was using maintenance as a means to attract new customers. Given the appropriate amount of time, Complimentary Maintenance will generate more sales traffic at the issuing dealership via word of mouth and repurchases, but it takes time for loyalty to build through positive service experiences.
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