Dealership Service Advisers Should Sell Pre-Paid Maintenance Plans

Service advisers can hold the key to prepaid maintenance success.

Too often, though, dealers introduce these programs as F&I aftersales products, but fail at integrating service into this process. When that happens, advisers may misunderstand how these prepaid maintenance plans can help them sell more service and earn more income.

These plans package frequently used maintenance services and offer them either free (often covered by the automaker) or at a discount to customers. By attracting customers into the dealership’s service department, these plans can become powerful retention tools.

However, not every effort is a success story. When dealers adopt these plans but later drop them due to disappointing results, the actual blame often rests not in program design, but management oversight.

To help make these plans work, advisers should be included, trained and incentivized so they tell customers about plan benefits and value.

Plan providers, fixed-operations consultants and dealers successfully using prepaid maintenance marketing say higher ROI results from structured coordination between the sales (including F&I) and service operations.

“These programs succeed for the dealership based on how advisers present them to customers,” says Bill Costlow, CEO of PremierConnect and Performance Marketing. “Do advisers understand they are stakeholders in retaining customers?”

A tracking of dealerships using a pre-paid maintenance program to retain customers indicates an 85%t first-year retention rate and a 65% rate in the second and third years, says Ryan Williams, president of Fidelis PPM, a provider of dealer-branded prepaid maintenance plans.

Scott Smith, dealer principal at Automotive Associates of Atlanta, reports 65% of customers purchase a multiyear plan from his dealerships. Plan usage drives a 20% service growth, he says.

Promoting sales to new customers, renewing expiring plans and upselling customers who come in to redeem plan services means an extra $3,000 to $4,000 compensation a year per adviser, he says. “Better compensated staff reduces turnover.”

Such benefits put advisers in the frame of mind to correctly promote plans and engage customers using them, says John Napoleon, a former dealership general manager and now a consultant.

Costlow says dealer managers often put much energy into building up the maintenance plans’ value to customers but “neglect building up the value of the business to their own employees. That has to be in place as well if you want advisers invested in customer retention.

“There are no silver bullets, but if a prepaid maintenance plan gets customers coming back to the dealership, it gives sales a better shot of selling customers their next vehicles and keeping those customers coming back to the service department.”

Williams says pre- and post-sale training and marketing can help dealers communicate plan values to advisers and customers alike. “These plans do not work well in an unsupportive environment, meaning management puts it on autopilot.”