Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
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industry expert / f&i; Three Employee Complaints That Could Destroy Your Prepaid Maintenance Program Y Mike Cassinelli is a sales and finance training specialist from IPS Agency, a company that serves auto dealers in the eastern United States. While his motivational skills and closing techniques are what his clients rave over, his real passion is helping build teams and pushing people to improve their quality of life. He is a firm believer that simple discipline over time creates massive success. our prepaid maintenance program is going to fail. That's right, I said it. It's doomed from the start. All the promises of increased customer retention, additional dollars per RO and boosted vehicle sales will never come to fruition. Not only that, your employees are going to have endless frustration with it and that frustration is going to trickle down to the last person you ever want angry—your customers. Wait, what? You have a prepaid maintenance program in place that has been tremendously successful? Well then, you must've considered and prevented the following employee complaints that could've derailed your program before it ever got started. Employee Complaint #1: "I'm not getting retail for my services." This complaint comes from your service manager. He'll protest, "Why would I want to give away oil changes and tire rotations for less than retail? I'm losing money!" It is critical that your service manager, and anyone else involved with the setup of the maintenance program, understand that the purpose is to drive more customers to the service department. If we can simply break even on these services, the opportunity for upsells and additional tickets will far outweigh the few dollars' profit we're forfeiting. As a wise person once told me regarding prepaid maintenance, "We're not trying to get any cheese, we're just trying to get out of the trap." manufacturer's recommendations and generally figuring out what's important to your customer, then you're a step ahead of the curve. Employee Complaint #3: "A product I can't make profit on by selling? Thanks, but I'll stick with what I've got." All the service department preparation in the world will not help you if the plans never get sold. Your F&I; manager may realize that their profit margins are much higher on other finance products like service contracts, gap protection and environmental protection. So, how do we convince the F&I; manager that our new prepaid maintenance program is competitive to the other offerings they have? Rather than expecting your F&I; manager to mark up the policies, try paying a flat dollar amount per contract. This way, you get the best of both worlds. The F&I; manager is incentivized to sell it, and the customer can still experience the savings of a low-cost maintenance plan. Now that you've considered the employee complaints that could derail your program, perhaps you're ready to address them before they have a chance to happen, and start reaping the benefits prepaid maintenance can deliver! Employee Complaint #2: "Prepaid Maintenance customers never buy anything else!" Once the program is up and running, some service managers and service writers will bemoan the fact that people come in their service lane, present their PPM vouchers and get the work done without ever buying any other services. I suggest that your service department take a long look in the mirror before starting a maintenance program. If you do not have the systems in place that will enable you to upsell on a small-ticket RO, then you are probably not ready for what the program is going to bring. If you're already well versed in menu selling, 29