Pre-paid and complimentary maintenance plans boost customer retention at auto dealership service departments, according to a DMEautomotive survey.
Nearly three of five polled consumers with such plans say they are likely to continue servicing their cars at a dealership after their plans expire.
That compares with average dealer post-warranty retention rates of 22% to 40%, depending on vehicle make and age.
“Our survey provides fresh evidence that both prepaid and OEM-provided maintenance plans have a powerful impact on dealer service retention,” says Doug Van Sach, DMEautomotive’s vice president-strategy and analytics.
“These programs can more than double service business that typically bleeds to the aftermarket,” he says.
The study results and ways to increase customer-pay service revenue are topics of a WardsAuto webinar presented by DMEautomotive. The program is on Oct. 9 at 2 p.m. Eastern. To register for free, go to http://WardsAuto.com/dme-webinar.
“Everyone potentially is a prepaid maintenance customer,” says Jeremy Johnston, a finance and insurance manager who sells them at Suburbanof Sterling Heights, MI.
But the DME study indicates a minority of car buyers opt for the F&I add-on that covers oil changes, tire rotations and service not related to repairs.
The survey says 22% of car owners currently have a maintenance plan. Of those, 15% are complimentary plans such as ToyotaCare, Experience Buick andUltimate Service, while 7% are purchased.
The plans seem to attract young car buyers. That seems ironic because many in that age group are “traditionally dealer-adverse," Van Sach says.
Car owners under age 35 are more likely to have a maintenance plan (31%) than those older than 35 (18%), the survey says.
Consumers age 25-34 show the highest level of satisfaction (84%) compared with all other age groups (62%).
Other survey findings:
- One in four customers still stray from the dealership while under a plan, indicating that dealerships still must actively seek to retain customers.
- Consumers who do not have all service performed under the plan are significantly less likely to continue servicing at that dealership.
If dealers and auto makers believe they needn’t worry about keeping these customers close and satisfied until a plan expires, “this data clearly shows that those beliefs need some revising,” Van Sach says.
A surprising 25% of people with free or pre-paid maintenance plans say they have only used them for some of their covered services. That could reflect a lack of convenience typically associated with dealership service centers, DMEauto says.