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Derrick Woolfson

Derrick Woolfson Business Development

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1000k Miles. 1000k in Savings. - oh, wait what about service?

It is safe to say that servicing their new vehicle is not on the top of consumers’ minds during the buying process. That is not to say that s/he does not think about the general cost of service. In so far as understanding certain makes and models are more prone to service higher maintenance costs.

In the digital age of buying it’s reported that consumers now shop on 24-28 mobile sites before making the decision to visit a dealership. Only visiting 1.3 dealers. Given that price is the focus – urging someone to drive 2-3 hours to make the purchase – it posed the question of - has the consumer forgotten about the service benefits their hometown OEM brand offers? Are dealers still failing at building value in their brand and the care of their vehicles? 

Just this past week, we received a few phone calls where customers (who live in our PMA) asked if they can transfer their service benefits from another OEM store to ours. To which we said, “While I cannot transfer their benefits. I can offer you a free oil change and a complimentary rewards account.”

Knowing that our OEM requires us to service the customers in our assigned customer base two times in 12 months. This is not as easy as one would think – (mention defectors such as Midas, PepBoys, etc)

Had we offered and incentivized the VIP program to the customer 3-4 months ago when they purchased they would have received complimentary oil changes. Already being one of our VIP customers.

It poses the notion that the customer – who opened up – said they saved $1000 driving 3hrs, but now they have lost out on all the service benefits. As they stated they were not going to be driving 3 hours for an oil change. In turn, driving 3 hours (6hrs total) to save $1000k cost them over $1000k in service benefits with their hometown OEM.

How many customers do you lose in your PMA to the same OEM? If so, what are tactics besides bottoming out on price are you and your dealer doing?

This is not to say that this will not continue to happen. What is does suggest, though, is that there are a few things to keep in mind:

  • In PMA dealer OEM customers are 7 x less expensive to sell a vehicle too than a conquest customer (NADA)
  • Losing a $750-1250 in PMA is worth the cause when you can retain the IN PMA customer in service. Per NADA Fixed Ops nets 73 of every 100. Where sales nets just 12.
  • Beyond price – does your dealer offer a VIP Program? If so, how many consultants or even managers know the plan?
  • Is your VIP Plan in your showroom, emails, or scripts?

 

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