Proactive service departments should make a dealer-branded prepaid maintenance (PPM) program part of their service-retention campaign.
They can do this even when their OEMs provide a similar program to generate more repeat business.
Dealers should train service advisers on how to maximize their presentation of PPM benefits to each customer. PPM spiff programs can boost PPM sales and redemption rates.
Train advisers on plan basics, features and benefits. They should know program details down cold, so they confidently promote and renew and upsell plans to every service customer.
Basic training advice should:
- Explain each service packaged in the plan. These commonly include oil changes, tire rotations, alignments, wiper replacements and fluid replenishment.
- Take time to explain why each is important to vehicle performance and occupant comfort and safety. Outline the importance of establishing a habit of routine vehicle servicing. Explain that routine maintenance often is a prerequisite for factory warranty compliance.
- Show how this careful attention to vehicle needs protects investments and keeps the vehicle performing like new.
- Review how the plan catches wear-and-tear issues early.
- Highlight savings by using plan benefits. Prepare a poster or handout visually showing a PPM user’s out-of-pocket savings. Base the savings in reality.
Most major luxury and many domestic brands now make prepaid maintenance programs part of their marketing incentives. Many dealers layer a dealer-branded PPM over the OEM program. Consider a hybrid plan.
Data pulled from dealerships using the Fidelis PPM program shows the strength of these incentives to retain and grow business: First-year use retention rate of 85% and two- and three-year retention rates of 65%. On average, dealers using this plan experience service-volume growth of 70%.
Town Center Nissan in the Atlanta area gives a complimentary PPM plan – synthetic oil change, tire rotation, multipoint inspection and car wash – to every new- and used-car buyer. Service advisers also offer an enhanced $119 PPM package called VIP Service, featuring $219 worth of services.
The dealership’s six advisers sell about 160 PPMs each a month. Their rate is 90% to customers driving vehicles with 30,000 to 60,000 miles on the odometers, says Rick Mathis, parts and service director.
The dealership gives the store’s six advisers an opportunity to increase monthly compensation by $400 on average through spiffs.
“We have customers on their third cycle who ask to be renewed when they arrive for service,” Mathis says.
His advisers are trained to overcome customer objections. Among the most common: “You send me service coupons that save me money, why should I buy this?”
The advisers’ response is that the discount service still is priced higher than the VIP rate. “My customers see the advantage and upgrade to the PPM,” he says.
Customers object when they don’t understand the value in the aftermarket products suggested to them. Explain to them how preventive maintenance can meet their emotional and lifestyle needs.
Ryan Williams is president of Fidelis PPM and has worked at dealerships as a sales manager, F&I manager and general manager. He can be reached at [email protected].