Digital Dealer - November 2019 - 16

D E A L E R OP S & M ANAGEM ENT: F ixe d Oper at i ons

By Scot Eisenfelder
CEO,
Affinitiv

What's Your
Post-Warranty
Service Retention
Strategy?
The most critical
defection point for a
dealership's customers is
during the transition from
warranty to post-warranty.
As the cost of vehicle
ownership inherently
increases, owners begin to
price shop-or even worse,
just assume the dealership
is more expensive than
independents, and look for

16

NOVEMBER 2019

an alternative.
Although this period
presents a concern for
dealers, it also represents
an extremely large opportunity. However, retaining

customers requires a shift in
mindset.
Rather than viewing each
service appointment as a
transaction with the goal of
making as much money as

PRICING NEEDS TO
REFLECT RELATIVE
COMPETITIVENESS."

D I G I TA L D E A L E R . C O M

possible, you need to play
a volume game. The more
vehicles you service, the
more profits you will make.
But how do you retain more
customers?
Here are several strategies to try.
INTELLIGENT PRICING

Many dealers don't put a
lot of thought into their service pricing strategy. While
the vehicle is under warranty, the price is determined
by the OEM. After warranty,
dealers tend to charge the
same labor rate whether
they're doing an oil change
or a transmission job. The
labor rate might be $100/
hour, regardless of whether
the tech is getting paid $30/
hour or $50/hour. If an oil
filter costs $4, they charge
$8. If another part costs $35
they charge $70.
Unfortunately, this costplus strategy doesn't win
the customer retention
game. Pricing needs to
reflect relative competitiveness.
If a customer has a BMW,
there are a dozen places he
can go to for an oil change.
Same if he needs tires. But
if he needs transmission
work, there are few options.
How can you make sure he
comes to your dealership?
Win the customer's trust
with an intelligent pricing
strategy. On vehicles transitioning out of warranty, it's
OK to make no margin on
that oil change, or to have a
price-match guarantee. Your
profit on that oil change is
not going to make or break
you, but increasing your retention of a four to six-yearold vehicle will determine



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Digital Dealer - November 2019

Table of Contents for the Digital Edition of Digital Dealer - November 2019

Digital Dealer - November 2019
Become an Accredited Leader
Happy and Harmonious Holidays – are Possible!
Are You Ready for 2020?
2019: Another Strong Year for Buy/Sell Activity and Valuations
What’s Your Post-Warranty Service Retention Strategy?
What’s Your Post-Warranty Service Retention Strategy?
Interview with Jane Millman of Riverhead Chrysler Dodge Jeep Ram
Introducing Our 2020 Theme: Defy Gravity
Remove Friction in your Media Mix to Drive Profitability
Connected Cars – Whose Data is it Anyway?
Consistent Communication Strategy
Marketing That’s Moving the Metal
Google My Business: Your Secret Weapon to Boost Sales
Digital Retailing Part 3: Digital Influence
Tatton Manning: A True Patriot!
5 Ways to Modernize Your Owner Retention Program (ORP)
Digital Dealer - November 2019 - Digital Dealer - November 2019
Digital Dealer - November 2019 - Cover2
Digital Dealer - November 2019 - 1
Digital Dealer - November 2019 - Become an Accredited Leader
Digital Dealer - November 2019 - 3
Digital Dealer - November 2019 - 4
Digital Dealer - November 2019 - 5
Digital Dealer - November 2019 - Happy and Harmonious Holidays – are Possible!
Digital Dealer - November 2019 - 7
Digital Dealer - November 2019 - Are You Ready for 2020?
Digital Dealer - November 2019 - 9
Digital Dealer - November 2019 - 2019: Another Strong Year for Buy/Sell Activity and Valuations
Digital Dealer - November 2019 - 11
Digital Dealer - November 2019 - 12
Digital Dealer - November 2019 - 13
Digital Dealer - November 2019 - 14
Digital Dealer - November 2019 - 15
Digital Dealer - November 2019 - What’s Your Post-Warranty Service Retention Strategy?
Digital Dealer - November 2019 - 17
Digital Dealer - November 2019 - What’s Your Post-Warranty Service Retention Strategy?
Digital Dealer - November 2019 - 19
Digital Dealer - November 2019 - Interview with Jane Millman of Riverhead Chrysler Dodge Jeep Ram
Digital Dealer - November 2019 - 21
Digital Dealer - November 2019 - 22
Digital Dealer - November 2019 - 23
Digital Dealer - November 2019 - 24
Digital Dealer - November 2019 - 25
Digital Dealer - November 2019 - Remove Friction in your Media Mix to Drive Profitability
Digital Dealer - November 2019 - 27
Digital Dealer - November 2019 - Connected Cars – Whose Data is it Anyway?
Digital Dealer - November 2019 - 29
Digital Dealer - November 2019 - Consistent Communication Strategy
Digital Dealer - November 2019 - 31
Digital Dealer - November 2019 - Marketing That’s Moving the Metal
Digital Dealer - November 2019 - 33
Digital Dealer - November 2019 - Google My Business: Your Secret Weapon to Boost Sales
Digital Dealer - November 2019 - 35
Digital Dealer - November 2019 - 36
Digital Dealer - November 2019 - Digital Retailing Part 3: Digital Influence
Digital Dealer - November 2019 - 38
Digital Dealer - November 2019 - 39
Digital Dealer - November 2019 - 40
Digital Dealer - November 2019 - 41
Digital Dealer - November 2019 - 42
Digital Dealer - November 2019 - 43
Digital Dealer - November 2019 - Tatton Manning: A True Patriot!
Digital Dealer - November 2019 - 45
Digital Dealer - November 2019 - 5 Ways to Modernize Your Owner Retention Program (ORP)
Digital Dealer - November 2019 - 47
Digital Dealer - November 2019 - 48
Digital Dealer - November 2019 - Cover3
Digital Dealer - November 2019 - Cover4
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