SCOTTSDALE, Ariz. – Fidelis PPM, a CU Direct company, reported today that the Lester Glenn Auto Group is generating $200,000 a month in incremental customer-pay revenue and long-term customer retention since including its prepaid maintenance (PPM) program in each vehicle sale.
This multi-step PPM features free, two-year oil changes for all customers plus the option to upgrade to two- and five-year discounted maintenance services that include full synthetic LOF services, tire rotations, key replacement, and various discounts.
The Group sells 13,000 vehicles a year, of which 60 percent are leased. At its one-year mark, plan penetration is at 10 percent, and on its way toward a goal of 20 to 25 percent.
“Not bad in a substantial lease market as ours is,” notes John Perillo, Group Director of Variable Operations.
“It’s a proven fact that where people service their cars is where they buy or lease their next one, so we want to be sure that is at a Lester Glenn dealership,” Perillo adds.
With just a year’s use of this program, the auto group reports it is helping attract and retain:
- Lease customers’ routine maintenance services for at least two years.
- Finance customers’ routine maintenance services for up to five years.
- $75.00 per repair order upsell or $200,000 a month in additional customer-pay service revenue across the Group.
The New Jersey-based Group founded in 1956 today includes eight dealerships, representing 11 brands, including Hyundai, Chevrolet, Chrysler, Dodge, Jeep, Ram, Subaru, Ford, Buick, GMC, and Mazda. Each store prides itself on providing an unparalleled car-buying experience focused on customer satisfaction.
For several years, part of this commitment has included lifetime free oil changes for customers who purchased a new or pre-owned vehicle at any Lester Glenn location. That lifetime free oil change strategy did not, however, generate the long-term repeat service traffic and customer retention management had hoped.
So, instead, to accomplish that objective, Perillo and Monica dismantled that lifetime program and in its place rolled out a more structured and measurable program driven by Fidelis PPM.
“Even at this early stage, 3,000 of the 7,000 customer-pay repair orders we are doing a month are customers who’ve come in for an oil change, whether due to the two-year free or upgraded PPM programs,” notes Monica.
“Moreover, we are upgrading 30 percent of those free LOF customers to our full synthetic service. Without this PPM program in place, those customers might have come in regardless, but we would not have had these upsell opportunities,” Monica adds.
Fidelis PPM administers and manages all three program levels for the dealerships. The company is the authority in helping dealers retain customers through process-driven prepaid preventive maintenance retention programs.
Ryan Williams, Fidelis President, notes that dealers evaluating any retention-promotion plan should make sure they have a track record of:
- Driving consumers to the dealership, especially the service department
- Delivers a positive experience, so customers continue to come back
- Has baked-in accountability tools to measure the lift in customer-pay dollars for each visit, so program ROI is measurable.
To promote plan transparency and ease of program use for both plan holders and service advisors, Fidelis custom-built a plan tracking and reporting website for the Group, which it markets as part of its LG Advantage program.
At this early date, PPM plan renewal and upgrade data are not available, but Perillo and Monica expect continued program redemption will continue to show an increase in both service RO dollars and customer retention.
“Increasing repair order volume, higher customer retention, and the sale of additional services and vehicle – these are the reasons we put in place this Fidelis PPM plan,” Perillo says, “not to make money on their sale in finance, but to get customers back in the door. It works.”