According to research from DME Automotive, both prepaid and OEM-provided maintenance plans have a powerful impact on dealer service retention.
“With nearly 3 in 5 consumers reporting they are likely to continue servicing at the dealership after their plan expires — compared to average dealer post-warranty retention rates of 22 percent to 40 percent (depending on vehicle make and age) — these programs can more than double service business that typically bleeds to the aftermarket, while also having a profound impact on retaining the young, traditionally dealer-averse, service shopper’s business,” explained Doug Van Sach, vice president of strategy and analytics at DME.
Among the automotive marketing firm’s findings is that 22 percent of U.S. car owners currently have a maintenance plan (beyond a standard OEM warranty). That breaks down as 15 percent with a complimentary plan like ToyotaCare, Experience Buick or BMW Ultimate Service, and 7 percent who have purchased a prepaid dealer plan.
While the majority (65 percent) of respondents in DME’s national survey report using their plan for “all” scheduled maintenance, only 25 percent have only used it for “some” of their covered services.
So, even though a free or paid-for plan is in place, plan-holders are still choosing to spend service dollars outside the dealership — a possible reflection of the lack of convenience traditionally associated with dealership service centers, according to DME.
Also, a significant percentage of plan-holders either are not being consistently engaged by their dealership or are not finding value in their plans, because 9 percent reported that they have not used them at all.
According to DME’s research, 69 percent of those with free or prepaid plans are either “extremely satisfied” (22 percent) or “satisfied” (47 percent) with the plan.
Those using their plans for “all” scheduled service at the dealership report the highest satisfaction: 75 percent are either “extremely satisfied” (30 percent) or “satisfied” (45 percent). While 66 percent of those using their plans for just “some” maintenance report being satisfied, only 7 percent fall into that that passionate “extremely” satisfied category.
Overall, 56 percent of those with a maintenance plan report that they are likely to keep servicing at the dealership when the plan expires (with only 1 in 5 claiming that they are unlikely to).
How much consumers use their plans and whether they exclusively service with that dealer correlates with a significantly higher likelihood to continue service with that dealership post-plan.
For instance, 62 percent of those that use plans for “all” service are likely to stick with the dealer. And, nearly two times more consumers in that group report that they are “very likely” (30 percent) to return to the dealership, compared with those that only have “some” maintenance performed under the plan (17 percent).
Young, under-35 servicers present the most profound loyalty challenges for dealerships, according to data from previous DME research. This new survey indicates that maintenance plans represent a major opportunity for dealerships to connect with and retain them.
Not only were those under 35 more likely to have a maintenance plan (31 percent) than those over 35 (18 percent), they also were significantly more likely to use their plans for “all” maintenance (72 percent) than older customers (61 percent).
Notably, those aged 25-34 (who used their plan for “all” maintenance) reported the very highest plan satisfaction (84 percent) compared with any age group. And, 62 percent of that segment reported that they are likely to service at the dealership post-plan.
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