As many of you know, I've been involved in this industry since cars took leaded gas.  There have been many changes.  Some good, some not so much.  One thing that has seemed to be a constant is selling extended service contracts in your service drive has been an abject failure.  

Dealers get excited about it.  Service Writers train for it.  Sometimes it even takes off selling.  But, usually within weeks, sales slow to a trickle and then become a forgotten practice followed by the ever popular excuse, "We tried that once, it didn't work."

WHY BOTHER SELLING SERVICE CONTRACTS IN SERVICE?

Every day since I bought my new car I'm getting texts, emails and postcards urging me to grab the opportunity to purchase a service contract on my new vehicle.  These were all sent from companies that DO NOT sell service contracts through dealers.  I've asked dealers across the country why these companies do this.  The answer is a simple one.  IT WORKS!  But not for the dealer.

These contracts make no money for dealers.  There is also no obligation to send your customers to your service department for any covered repairs.  That said, the customer can't be counted on to be a repeat customer since they may be getting repaired elsewhere.

So, let's see why it makes sense to figure out how to successfully sell Service Contracts in your service drive.

1. Added profits from the sale.
2. Profits from repairs due to claims
3. 60% who buy contracts service their vehicles with you.
4. 80% of those who service become repeat buyers.

Here are some rough numbers.  If your dealership does about 400 retail RO's per week, you'll realize about $250,000 per year in additional revenue.  That's based on a less than 2% success rate on selling contracts.  In the past, dealers were promised 20-40% return in service.  That's just not realistic and a large reason for failure.  Based on just 2% success you earn $250,000.  

We already have dealers seeing 5% but they are seriously focused on a process for success.  We've had this program with the Lithia Group for nearly 2 years and they are seeing $2,000,000 additional profit from sales.  This doesn't count increased service business, claims income or repeat customers.  We also have single point stores seeing significant increases.

For more info, email jfuhrman@otiservices.com and I'll spend the time to explain and set up a live demo so you can see exactly how this software works.

https://youtu.be/Sxicie5fMrI