Hint: It involves implementing a digital retailing strategy with messaging woven into it. And we’ve got a guide to help you make it work. SEE HOW
Pre-paid Maintenance Plans (PMPs) keep customers returning to your service department and increase upsell opportunities, which is critical to increasing the service bottom line. Today’s self-administered, self-managed PMPs are appealing to customers, particularly those buying mainline domestic and import brands who seek value in everything they buy.
Today’s technology-driven plans make it very easy for dealers to customize what is offered in a PMP. Plans that provide the product (value) important to the local market will appeal more to buyers, making their presentation and sale in the F&I office or service lane more profitable and successful for the dealership.
It is these plans’ ability to retain a customer’s service business and then create upsell opportunities for additional customer-pay repair order (RO) business that make them like a money tree. These programs can triple the likelihood of the customer continually returning for service – a big growth over the 18 to 20 percent of customers who do traditionally return with a PMP’s incentive.
By converting PMP owners’ prepaid maintenance work to additional legitimate service needs, the additional retail parts and labor can produce healthy additional business. Some dealers report an additional $150 to $350 of up-sold retail customer-pay business per RO as a result.
Every plan will experience forfeiture. It results when a customer terminates the plan early or for whatever reason does not use the plan. In some PMPs, the third-party administrator holds this dealer-funded reserve. It is from this reserve that the administrator would often take up to 60 percent of the value of the cancelled services as part of its fee structure. Today’s self-managed plans enable the dealer to processes forfeiture through the general accounting ledger and add the reserve to their own bottom line.
For more information about the benefits of Pre-Paid Maintenance Programs, visit http://ow.ly/bN7Gj