New DMEautomotive survey reveals that prepaid or complimentary maintenance plans, combined with excellent service delivery, are among the best ways to win and retain consumer loyalty – especially ‘next-gen’ customers

DMEautomotive Survey Highlights:

• 56% of consumers with a prepaid or “complimentary” service plan are likely to continue servicing at dealership after expiration
• Roughly 1 in 4 U.S. vehicle owners have a dealer/OEM prepaid or free service plan.
• 62% of those that use plans for “all” maintenance are likely to stick with their dealer.
• Next-generation servicers (under age 35) are more likely to have a plan (31%) than those over 35 (18%) – and more likely to have all maintenance done under the plan/at dealer (72%) than those over 35 (61%).

Daytona Beach, FL – August 13, 2012 – DMEautomotive (DMEa), the industry leader in science-based, results-driven automotive marketing, today released key findings from its new national consumer survey[1] that provides insight into the state of prepaid (PPM) and complimentary dealer and OEM maintenance plans - from current penetration rates and customer satisfaction levels, to the precise role these plans play in dealership service retention.

“Our survey provides fresh evidence that both prepaid and OEM-provided maintenance plans have a powerful impact on dealer service retention,” said Doug Van Sach, Vice President of Strategy & Analytics at DMEautomotive. “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% to 40% (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.”

KEY FINDINGS:

Maintenance Plan Penetration

22% of American car owners currently have a maintenance plan (beyond a standard OEM warranty): 15% have a complimentary plan (e.g. ToyotaCare, Experience Buick, or BMW Ultimate Service), while 7% of respondents have purchased a PPM dealer plan.

Free or Prepaid, 35% Still Not Using for ALL Maintenance (or NOT Using at All)

While the majority (65%) report using their plan for “all” scheduled maintenance, a surprising 25% 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. Also, a significant percentage of plan-holders either are not being consistently engaged by their dealership, or are not finding value in their plans, with 9% reporting they have not used it at all.

Plan Usage and Satisfaction Levels Align

69% of those with free or PPM plans are either “extremely satisfied” (22%) or “satisfied” (47%) with the plan. Those using their plans for “all” scheduled service at the dealership report the highest satisfaction: 75% are either “extremely satisfied” (30%) or “satisfied” (45%). While 66% of those using their plans for just “some” maintenance report being satisfied, only 7% fall into that that passionate “extremely” satisfied category.

Plans Drive Long-Term Retention

Overall, 56% of those with a maintenance plan report they’re likely to keep servicing at the dealership when the plan expires (with only 1 in 5 claiming they’re unlikely to). Dealerships clearly need to work hard to keep those in-plan loyalist intenders, and move the 25% that report they’re on the fence about sticking with the dealership to the loyalty column.

To view chart click here: http://prn.to/Pi73xa

Loyalty During Plans Impacts Future Loyalty

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% 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 they’re “very likely” (30%) to return to the dealership, compared with those that only have “some” maintenance performed under the plan (17%).

A Powerful Tool for Young, Dealer-Disloyal Servicers

While young, under-35 servicers present the most profound loyalty challenges for dealerships (data confirmed by previous DMEa white papers[2]), this new survey reveals that maintenance plans represent a major opportunity to connect with - and retain - them. Not only were those under 35 more likely to have a maintenance plan (31%) than those 35+ (18%), they were significantly more likely to use their plans for “all” maintenance (72%) than older customers (61%).

Notably, those aged 25-34 (who used plan for “all” maintenance) reported the very highest plan satisfaction (84%) compared with any age group - and 62% of that segment reported they’re likely to service at the dealership post-plan. With prior DMEa data revealing that the largest group of dealer-disloyalists are aged 25-34 (representing over one-third of total disloyalists), it’s clear that maintenance plans are a uniquely powerful way to drive more loyalty among that critical ‘next wave’ of traditionally dealer-resistant servicers.

“It’s imperative that dealers and OEMs offer free and prepaid programs, because more than half of all consumers currently under one indicate they will stay with the dealership post-plan,” noted Van Sach. “Our data did contain some surprises: one in four customers still stray from the dealership while under a plan; and consumers who do not have “all” service performed under the plan are significantly less likely to continue servicing at that dealership. So, if dealers or OEMs imagine that under-plan service taken elsewhere just means more profits – or that they don’t need to worry about keeping these customers very ‘close’ and satisfied until plan expiration – this data clearly shows that those beliefs need some revising.”

This maintenance plan “market snapshot” represents first findings from DMEa’s newest survey on current service consumer behavior and trends. Reports on diverse topics, from QR Code, mobile app and social media usage, to how servicers research specific service purchases, will be released over the next three months.

About DMEautomotive
DMEautomotive (DMEa) is the industry leader in science-based, results-driven automotive marketing, and provides turnkey marketing to the largest and most innovative automotive organizations, from automobile dealers to many of the largest aftermarket companies in the U.S. DMEa's uniquely panoramic view of the complete automotive sales and service market, combined with its cutting-edge, science-based marketing programs, increases customer yield, conversion and retention.

DMEa does not take marketing performance on faith, and each product and service is measured by a simple, precise scientific approach: Is it true? Prove it. Will it work? Test it. Does it generate results? Show it! Supported by DMEa’s proprietary, cloud-based Red Rocket Technology Platform, the DMEa product suite includes science-based, data-driven, multi-channel customer acquisition and retention marketing programs; best-in-class campaign reporting; data management and analytics; auto-focused Customer Interaction Center solutions, and complete on-site mail and email fulfillment services. Headquartered in Daytona Beach, Florida, DMEa also has major operations in Jacksonville, Fla.

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