For the past 25 years, Mark Krejci has been president of Continental-National, an F&I development company that creates and manages dealer reinsurance and other asset-building programs for automobile dealerships across the country. For almost as long, Continental-National has worked with Performance Administration Corp. to make certified maintenance an essential part of those asset-building programs.

Building Value Through Customer Retention

The key, Krejci says, is building relationships that result in customer retention. “I’ve seen cases where a dealer will buy an underperforming store that sells 70 or 90 cars a month and within a few months, they’re selling 250 or 400 cars a month,” he says. “Does this mean that they can sell the store for more now than they could when they were selling 70 cars a month? Maybe a bit more, but just as those sales shot up, they can also go down.”

The true value in any car dealership, Krejci says, is in customer retention/fixed operations. It’s a simple three-step process: first, the customer buys the car at your dealership. Next, when they return for service, they need to be happy with the experience they have. Finally, if they are happy with their experience, they return for additional repair work (and hopefully to purchase a new vehicle when it’s time).

The key is creating a hook to bring that customer back. That’s where Performance Administration Corp. comes in. When a dealership offers certified maintenance on every new and used vehicle, it encourages those customers to come back.

This plan has certainly worked for Continental-National’s clients. “When dealerships include complimentary maintenance as an asset-building program, we’ve found that over the years, they can get as high as 75 percent customer retention. While that’s on the high end, it’s not uncommon for most dealerships that offer complimentary maintenance to push customer retention rates to around 60 percent. One of Continental-National’s clients, Garrett Motors, was extremely pleased to see their customer retention numbers begin to rise after instituting their own complimentary maintenance program.

Complimentary Maintenance is Just the Start

One of the things Continental-National clients love about complimentary maintenance is that the plans can be customized. Dealer leadership can work with their service manager to build the complimentary maintenance program that’s right for their store and their customers.

On the customer side, they love it because they get it at no charge. It’s a great incentive for them to come back to the dealership, but once they do, it’s up to the staff to make them feel welcomed. If the dealership or service department does a poor job of handling the customer, they may come back for the free maintenance, but they won’t return after it runs out.

The key is to use complimentary maintenance as a tool to bring the customer in and build a relationship with them. As the car ages and the customer comes in for those free visits, these provide opportunities to do that. If you succeed, they’ll return for non-warranty repairs, maintenance items that fall out of the complementary service period, new tires, and hopefully — ultimately — a new vehicle when the time is right.

Dealerships who can bring back their previous customers don’t have to spend as much time and money searching out new customers. This recurring customer base builds value — certainly value in terms of profit and not having to run on an endless hamster wheel search for first-time customers — but also value should you ever decide to sell the store.

A Certified Maintenance Program is a Long-Term Process

Building value through this kind of program doesn’t happen overnight; a certified maintenance program is an asset-building product for long-term growth. The value it creates, however, is solid, doesn’t fluctuate, and will increase over time. Continental-National is proud to recommend Performance Administration’s certified maintenance program, software, and customer-centric process to any dealership who is interested in taking this kind of upward track.

“I’m a great believer in Performance Administration Corp.,” Krejci says. “The efficiency, technology, smooth process and low-cost of their programs and the software dealerships use to maintain them — no one else has been able to replicate it,” he says. “Certified maintenance can help influence customers to start doing business with you, as well as helping retain current customers. At the end of the day, it gives you the opportunity to sell more cars.”