Dealers need to sell more service plans to make most of extended warranties

16 July 2010

 

Franchise dealers should redoubling their efforts to sell service plans to make the most of the five year warranties being introduced by some manufacturers.

 

So advises dealer management systems specialist Pinewood, which says that the extra warranty length should be used by dealers as means to build longer term customer relationships.

 

Neville Briggs, managing director at Pinewood: "Traditionally, dealers have found it difficult to retain the aftersales business of customers and cars much beyond three years. This is the point in time at which a standard new car warranty normally ends and also when the vehicle is sold to its second owner.

 

"What five year warranties provide is a new opportunity for dealers to continue that relationship. If a customer is returning to the dealership for warranty work, then they should also be targeted for servicing and other routine maintenance.

 

"Ideally, to cement the relationship, the dealer should be selling them a service plan to run alongside the five year warranty that ensures that this business is guaranteed for the future. This is true whether the car is on its first or subsequent owner."

 

Briggs said that dealers needed to look to the CRM tools available to them to make the most of this opportunity.

 

He explained: "It is a question of using the marketing tools at your disposal to their fullest in order to promote service plans. However, a good first step is to work out the service plan cost for each customer covered by a five year warranty and send them a text, e-mail or letter from within the DMS which gives them an idea of how cost effective a service plan can be.

 

"The system can also be set up so that each time a customer comes into the dealership for servicing, they are referred to someone who can explain how the bill they have just paid could be made more affordable by monthly service plan payments.

 

"This is a real opportunity for dealers and one that should be taken seriously."

 

For further details please contact Simon Wells at
Paperchase Public Relations on 01283 711311
or e-mail simon@paperchasepr.co.uk