Self-Managed Pre-Paid Maintenance Programs Keep Customers Coming Back

Today’s technology-driven plans make it very easy for dealers to customize what is offered in a PPM. 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 PPM’s incentive.

By converting PPM 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 PPMs, 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

Request product information about plan customizations and program features.

Here’s Your Sign: Building Employee Morale

One of my favorite comedians is Bill Engvall, who does the “Here’s Your Sign” gags. According to Wikipedia, “Engvall describes people who ask questions to which the answers should be obvious, and in the process, Engvall shows these people to be stupid. With the tag, “Here’s Your Sign”, Engvall then metaphorically gives these people a sign declaring their stupidity as a warning to others interacting with this person.” (e.g. “A couple of months ago I went fishing with a buddy of mine. As we pulled his boat into the dock, I lifted up this big ‘ol stringer of bass and this idiot on the dock goes, ‘Hey, y’all catch all them fish?’ Nope. Talked ‘em into giving up.”).

Just as Engvall metaphorically awards people’s signs of stupidity, other arenas of life give off similar warning signs that can be just as easily identified if we’re paying attention.

As business managers and/or owners, we all like to think we’ve got a pulse on employee morale, which is a critical component to how successful a business is. As someone who makes a living knowing what makes customers loyal, I know for a fact that if a business’ employees aren’t happy, chances are that business will not have happy customers. Front line employee interactions with customers can make or break those customer experiences. Unhappy customers lead to fewer repeat customers and referrals, which eventually impacts the bottom line.

Yet occasionally, even the best business owners and managers are guilty of becoming overly absorbed with a particular issue, burying their head in the sand in response to a problem or just being too darn busy to pay attention. They may miss those signs that should warn them when dysfunction is stealthily creeping into their corporate culture, ready to apply a long, slow choke-hold that will lead to revenue decline.

So, in case you haven’t been paying attention to your corporate culture lately, here’s your sign!

1) If you haven’t changed with the times, here’s your sign! If the higher-ups at your store continue to do things because that’s the way they’ve always been done, or if they refuse to consider a new technology or marketing program because “we sold plenty of cars twenty years ago without that,” they need to get with the times. Today’s marketplace is very different than it was twenty years ago.

2) If you change with the times every week, here’s your sign! In contrast to never changing with the times, some managers change direction every week based on an article they read, a suggestion from a friend, news that a competitor is doing something or even just on which way the wind blows. Sending employees scrambling in a different direction every week is counter-productive. Set long term goals, set programs and processes in place and stick with them for at least six months to give them a chance.

3) If it takes too long to get stuff approved, here’s your sign! Efficient businesses demand efficient processes. If it takes a committee to get anything approved, or if employees aren’t following the processes in place, it’s a problem and there’s probably a reason. Do your processes need to be reviewed? What’s really slowing down employee productivity?

4) If you’re not rewarding your employees for innovation or hard work, here’s your sign! In general, it’s fair to expect employees to do their job without complaint. But if someone comes up with an innovative idea, or if an employee delivers results that you know must have taken extra hard work, reward them! Nobody wants to work somewhere if they don’t feel appreciated.

5) If you have high turnover, here’s your sign! Now I realize that the retail and automotive industries have higher turnover than most, but why is that? If you have more employees quitting than are leaving because of lay-offs, chances are there’s something wrong with your corporate culture. What is it? Conducting exit surveys is one way to find out, or it may just require a little digging.

Fostering a positive work environment makes for happy employees, which in turn leads to happy-and loyal-customers.

Have you taken a close look at your corporate culture lately?

What do you think are signs of poor employee morale?

Real Results: Clever iPad Promotion & New UltraCare PPM Program Helps Hare Chevrolet Crush Aftermarket Service Shop Competition

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 (PPM) plan 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 earlier this year. The program, which launched in March and is dealer administered, has produced an average of $171 upsell 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 1,000 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.

What employee incentives do you use to promote upselling?

What techniques have you used to differentiate your store from your competition?

Is Your Dealership A Customer Service Champion?

A couple of weeks ago, J.D. Power and Associates released a report titled “Beyond Satisfaction: J.D. Power 2012 Customer Service Champions—Brands That Deliver Service Excellence to Maximize Business Results.” The report concluded that consumers prefer brands with excellent customer service and don’t always focus on the lowest price. Auto related brands identified as “Champions” include Cadillac, Jaguar, Lexus and MINI.

Why is customer satisfaction important? J.D. Power finds a very strong link between levels of customer satisfaction and levels of customer recommendation and intent to repurchase. The report also finds that brands that provide exceptional customer service tend to consistently employ these specific practices:

1. Hiring the right people and empowering them with the best processes, as well as the ability and authority to make judgment calls to resolve issues on behalf of customers.

2. Understanding their customers and offering the right products through the right channels in ways that truly resonate with them.

3. Being consistent in branding and delivery of the service experience, particularly across various channels and customer touch points.

For more information on the J.D. Power and Associates report, you can download the ”Beyond Satisfaction” report here.

How can these three best practices be executed in your auto dealership or retail store? By empowering your employees, sending relevant and targeted communications and ensuring that you have a strong branding message. That is, you should be able to explain to customers why it’s better to buy from you instead of your competitor. Then, make sure every employee is trained on the branding message and knows how to properly greet and treat every customer.

What processes does your store have in place to deliver excellent customer service?

Are your employees empowered to make decisions and resolve customer complaints?

The Hard Facts & Financial Impact Report: Auto Dealership Loyalty Programs & the Effects They Have on Profitability

Many organizations have tried to measure automotive loyalty but have lacked real transactional data. JD Power and Associates recently published its yearly findings on automotive brand loyalty. However, unlike the Power study, the focus of this whitepaper is at the individual dealership level and relates to those dealers who offer a non-OEM or independent loyalty program. Key elements that were analyzed in addition to vehicle repurchase intent include service-revenue generation, service-visitation frequency and marketing responsiveness.

Professionals and groups in the auto industry have traditionally been slow adopters of customer loyalty and reward programs. Skepticism about ROI and long-term value has been prevalent, and hard facts have been difficult to substantiate due to a lack of documented program membership and transactional data.

As with most any situation, we doubt claims lacking concrete proof. Sometimes our doubt is right on the money — and frequently it proves quite costly.

It is this skepticism, however, that proves costly when compared to the financial gains being experienced by dealerships that do participate and enroll customers into these types of retention-based programs.

Please fill out the brief form below to download the complete whitepaper: