Home / Articles / Drive Customer Retention to your dealership

Drive Customer Retention to your dealership

Drive Customer Retention to your dealership

By Ryan Williams

 that many dealers point to as a winner – a prepaid maintenance plan, commonly referred to as a PPM.

As its name suggests, this retention tool leverages prepaid or discounted essential maintenance services that a dealer gives to buyers or sells at an appealing price, to connect them to long-term use of your service department. Unlike similar OEM-branded plans, this kind of retention offer should be redeemable by customers only at your dealership.

The right plan, promoted, managed, and administered the right way, can drive customer retention (from customers using the programs) and generate increased customer-pay upsell dollars per repair order flowing from plan use.

Setting Up and Managing the Program

If you’re looking to build and manage such a program yourself, you’ll want to set up a number of key process basics as foundational:

  • Assemble an appealing combination of three to four products – a mix of LOF, tire rotation, alignment, or wiper services. Discount their package prices by as much as 45 percent – or give plans away as an incentive to start buyers servicing at your dealership. Remember, the value is in its ability to create downstream service revenue. Some dealers are enjoying as much as a 60 percent lift in fixed ops parts and service sales by using these plans.
  • Market this value-add to customers via mailings and point-of-sale materials, and have every employee trained on how to present the plan, how it works, and its value with confidence to every customer.
  • Remind plan holders on a regular basis — at least quarterly — of plan value to encourage them to stop into your service department.
  • Establish a fund reserve —  a managed pool of the monies you collect from plan sales (or which you have set aside for give-away programs) — that will fund plan products and services as they are redeemed or used by your customers at your dealership. Only the states of California and Colorado regulate these plans, as they consider them an insurance product, and the funds must be administered by a third-party. Dealers in other states may manage reserve funds as they see fit – or charge plan activities to a unique internal ops code.
  • If you have a BDC or outsourced service calling to set service appointments and make reminder and follow-up calls, update these resources regularly as new plan holders are added. You’ll increase plan usage – and extend upsell opportunities – by periodically reminding customers holding these plans to use them. Likewise, have educational materials developed about your plan that you can provide to new customers, to help them see the value and benefits in your program.
  • Provide usage reports to your customers. The report should show their plan usage and the dollar savings they’ll realize by not paying retail for those services. The plan also reminds them to use plan benefits more frequently.
  • Create management reports. These should show: new business driven by the redemption of services in the program; who are the dealership’s more active users (perhaps you’ll see an opportunity to send reminder marketing materials to less active plan holders); and what the ROI is on your plan investment.

Read More

Check Also

Social Media

How easy is it to place your business on social media?

How easy is it to place your business on social media Many Dealerships have not put …

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave a Reply

Your email address will not be published.