According to a survey by DMEautomotive in the U.S., pre-paid complimentary maintenance plans are increasing customer retention in dealership service departments. Nearly three out of five people polled who purchased such plans said they planned to have their vehicle serviced by their dealer once the plans expire. Furthermore, the evidence from this survey reflects average dealer retention rates for service customers, which are running at 22 to 40 per cent.
According to DMEautomotive’s vice president of strategy and analysis, Doug Van Sach, the recent survey “provides fresh evidence that both pre-paid and OEM-provided maintenance plans have a powerful impact on dealer service retention. These programs can more than double service business that typically bleeds to the aftermarket,” he says.
What is also interesting is that such pre-paid maintenance plans are attracting younger buyers – according to those surveyed, 31 per cent of buyers under the age of the 35 considered them, versus 18 per cent for those 35 and older. Van Sach says that the younger demographic is often considered “dealer-averse” when it comes to vehicle purchase and servicing.
Other findings from the survey illustrated that those aged from 25-34 had the highest satisfaction rate when it came to dealer vehicle servicing – 84 per cent – versus 62 per cent for all other age groups. However, it also showed that consumers that don’t have all of their service performed under pre-purchased maintenance plans are less likely to remain loyal to the dealership, with one in four customers tending to go elsewhere for vehicle maintenance while the plan is still valid.
As a result, Van Sach says that if both automakers and dealers feel they don’t need to actively seek to retain customers once pre-paid maintenance plans expire, such viewpoints clearly “need some revising.”
Furthermore, the DMEautomotive survey revealed that 25 per cent of those with pre-purchased maintenance plans said they had only used them for some of the services covered, something DMEautomotive believes could be attributed to a lack of convenience associated with dealerships, such as opening times or locations.
