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So Here's the Deal

[Video] Perfect Timing

Aside from selling VSCs on the service drive, the magazine’s F&I wiz says there are five other opportunities to capture a missed service-contract sale.

November 13, 2015

Last month, I talked about selling vehicle service contracts (VSC) on the service drive as part of my two-part response to a question submitted by Ryan from Independence, Mo. — home of Harry S. Truman and Clinton’s Soda Fountain. If you recall, he wanted help on a follow-up program for customers who opted against the coverage at the time of purchase.

This month, I’d like to focus on the components of an effective direct marketing campaign.
Aside from selling VSCs in the service drive, there are five other times you should re-contact customers who didn’t buy a service contract at the time of purchase —  the first being after their initial visit to your service department.

According to J.D. Power’s 2015 Initial Quality Study, the industry average was 112 problems per 100 vehicles in the first 90 days of ownership. This means that every customer is going to be in your service department, on average, 1.12 times for warranty work during the first 90 days. That also means you have the perfect opportunity to capture that lost sale. Best of all, it’s easy to do.

Now, when customers return to the dealership to pick up their vehicle after warranty work is performed, include with their keys and copy of the repair order a postcard-size note delivering the good news — that the factory warranty has covered the cost of the repair. Then email those same customers a brief video thanking them for using your service department.

Notice I didn’t suggest a mailer. That’s because today’s consumers are much more likely to respond to an interesting video than something they may think is junk mail. Just remember to keep those videos at no more than 30 to 45 seconds long. And make sure to include an urgent call to action. Here’s an example:

“Thank you for using our service department. We appreciate your allowing us to help you maintain your vehicle and take care of any warranty repairs. That’s one of the best things about owning a new vehicle. For up to three years, if you have a problem, you don’t have to worry about what went wrong, how much it’s going to cost to fix, or what you’re going to drive while it’s being repaired. You can hold onto that feeling for the next seven years with a vehicle service agreement. If you’d like more information about the coverage options still available on your vehicle, send me a text, email or give me a call. Because when it comes to vehicle repairs, there is nothing better than when you’re not the person writing the check.”

The second time you want to contact your customer by video email is after any subsequent warranty repairs. This video should mention that, because their vehicle is still under the manufacturer’s warranty, there will be no surcharge or inspection fee. As an incentive to act fast, you could mention you’re also offering zero percent financing for 12 months on a VSC.

The third and fourth email videos should be sent 30 to 60 days prior to the annual rate increase by your VSC provider. This gives customers two more opportunities to purchase the service contract. Alert them to the fact that you have received notice that there will be a price increase on Jan. 1, so if they have any interest in extending their coverage, they should do so before the price goes up.

Finally, a “last chance” email should go out 60 to 90 days before the expiration of the manufacturer’s warranty. If your CRM tracks customer mileage based on service department visits, you should schedule this email using either the mileage or time to ensure they receive it just prior to the expiration of their factory coverage.

Check out my video responses to Ryan’s question and others by going to my So Here’s the Deal blog on www.fi-magazine.com. Ryan, thanks again for your question. Until next month, remember, it’s a beautiful day to help a customer!

Ron Reahard is president of Reahard & Associates Inc., a training company providing F&I classes, workshops, in-dealership and online training. Got a question or objection for Ron? Use your mobile phone to record a brief video (shot landscape style!) of your question and upload it to www.hightail.com/u/REAHARD.

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