Fixed Ops boosts retention & revenue

February 7, 2020

Servicing vehicles is estimated to generate $10 billion annually. As Virgina Connell, Automotive Research and Consulting Manager at J.D. Power Canada, says “considering the sheer size of the auto service market for maintenance and repair, any fraction gained in market-share translates into millions in potential revenue” (source).

Increased Competition with Aftermarket Shops

Given the revenue opportunity, the aftermarket service is getting increasingly competitive for auto dealers. According to a study by J.D. Power, there is higher overall consumer satisfaction and repair satisfaction with aftermarket shops compared to dealers. In addition, aftermarket shops have seen an increase in visits from 2018 compared to 2019 while dealership visits remain flat in 2019. Dealers looking to up their service department game for 2020 can check out a few of our tips in our blog post here.

Value to Dealers

Prepaid maintenance plans are particularly attractive for dealers amid flattening auto sales who are looking to improve fixed operations or service plans to help future proof their business. Prepaid maintenance plans continually bring customers back to a dealer’s service department, creating an opportunity to garner customer loyalty, satisfaction and long-term revenue with each repeated visit.

As Connell says, satisfied customers not only translate into repeat service visits but their intent to purchase new vehicles in the future from dealers increase. A U.S. dealer example (cited here) further suggests high likelihood in satisfied customers to renew plan with dealer after expiration.

Value to your Customers

The appeal to customers is strong as well. For customers, prepaid maintenance appeals to both convenience and preventative benefits. Here are a few of the top benefits for customers:

· Receive locked in prices, with no budgetary surprises with rising rates for parts or labour

· Undergo regularly scheduled maintenance appointments by factory-trained technicians using genuine manufacturer parts

· Can choose to include as part of their finance or lease contract

For a full understanding on customer benefits on prepaid maintenance, check out our blog post on selling prepaid maintenance plans, here, as originally appeared in the May 2018 issue of Canadian AutoJournal.