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I have been doing regular blogs about successful promotions in dealerships that come to my attention. In this blog I wanted to let you know about a Prepaid Maintenance Plan (PPM) promotion that was extremely successful at Hare Chevrolet.
Hare Chevrolet has improved customer retention and increased its Customer Pay RO count by 12% since instituting a dealer branded Prepaid Maintenance Program (PPM) earlier this year. The program, which launched in March, and is dealer administered, has produced an average of $171 up-sell on every customer pay Retail Repair Order.
The dealership is in a highly competitive market place surrounded by four after market repair shops. The program has helped the dealership come out on top of its competition by ensuring service customers return to the dealership for future vehicle service needs.
The program, which focuses on selling maintenance plans to existing customers in the service lane, was kicked off in March with a service advisor sales incentive of an Apple iPad if they hit a quota of 22 plans sold. The incentive proved successful with all five service advisors exceeding their quotas resulting in 127 UltraCare plans being retailed to existing service lane customers.
The dealership has continued the success of the incentive program by building in PPM sales as part of the service advisors’ pay plans. Hare Chevrolet now averages 62 plans sold per month, 80% of which are sold out of service and 20% out of F&I. Customers are much more likely to purchase a maintenance plan in service when they don’t have competing F&I products to consider and the loan to value issue is gone.
The dealership sells the plans at a cost basis. Rather than try and make a profit they are using these plans as a great retention technique, which is working well with retention rates increasing about 5% per month. However, an added bonus is that the average customer that visits for a simple oil change ends up spending an additional $171 per RO, so it is incredibly profitable as well.
Based in Noblesville, Indiana, Hare Chevrolet continues to hold the title of the country’s longest-lived family-owned vehicle retailer. Today the Chevrolet dealership sells about 400 cars per month and employs 150 people. Current managers Courtney Cole and Monica Peck, who are the great-great-great granddaughters of original founder Wesley Hare, offer 50 service stalls, and about 1000 new Chevrolets in its sales lot.
The latest in technology has allowed the dealership to keep in front of the pack in a fiercely competitive market, while also maintaining loyal customers.