Innovative Dealers Grow Service Revenues with Customized Preventative Maintenance Program
When Performance Loyalty Group, Inc introduced their new UltraCare Preventative Maintenance Program six months ago they thought it would grab dealer’s attention. While they were optimistic, what was really surprising is how the retail customer embraced the concept and purchased the program. Pre-paid maintenance programs are nothing new in the auto industry, but the concept behind UltraCare is very different from what dealers may have been familiar with in the past. This web-based technology allows auto dealerships to create, manage and market their own branded in house pre-paid maintenance program while holding all of the program revenue and managing the net service costs to the customer. What makes this attractive to the retail customer is that the dealer can offer a more robust, value-driven plan that customers purchase with higher frequency than those administered through an independent third party.
The program has substantially increased service lane traffic and revenue for the two hundred plus auto dealers that took the initiative to try a new technology and service drive concept. Following a highly successful AutoNation trend as identified in their last quarterly report, UltraCare is heavily marketed in the service lane. While current industry statistics indicate that roughly one in five customers return to the dealership for service, UltraCare plan holders are visiting their servicing dealers at a rate of 72 percent. Further, plan holders that return to the dealer to redeem pre-paid plan elements also purchase incremental service at a rate close to 90 percent, resulting in an average incremental up-sell of $128 per customer.
Service volumes are predicted to fall by approximately 20 percent over the next five years. Dealers can minimize this impending future loss of service business with the UltraCare program, because it has no third party administrators, no sharing of plan revenue or forfeiture, and no service claim submissions, and it provides an offset with immediate liquid assets. It is also fully integrated into the dealership’s DMS.
The difference between UltraCare and other maintenance programs is that all of the dealer’s revenue stays in the dealership with the dealer realizing 100 percent of program forfeiture and plan sales dollars.
“Dealers have to address the huge drop in car sales and what that will mean to service business four to five years down the road,” comments Michael Gorun, managing partner at MediaTrac. “We listened to dealer’s objections about the typically archaic processes attached to the old prepaid legacy programs, their frustrations with such things as coupon books, shared forfeiture, loss of control of program revenue, non-captive service, delayed claims submission and we invested in new technology and processes that eliminates every one of these old headaches”.
With the combination of UltraCare’s complete program automation and MediaTrac’s superior integrated owner retention elements, Performance Loyalty Group predicts that a dealership should immediately see 35-45 percent program sales penetration and a 65-75 percent service retention rate.
UltraCare is also compatible with a dealers pre-owned competitive make inventory and is very effective as service lane sales product.
For additional information about UltraCare contact Jeff Shenk at 925-415-1300 or visit www.media-trac.com.
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