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Dealership Prepaid Maintenance Programs Boost Customer Retention

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June 11, 2013—Dealer-branded prepaid maintenance programs are boosting service revenue and customer retention, according to a new report from Performance Loyalty Group.

According to the report, prepaid maintenance programs that are completely funded by the customer boost service revenue by 15 percent and customer retention to 60 percent.

"The average age of vehicles on the road today is nearly 11 years, and as an owner progresses through the vehicle's lifecycle, dealership retention drops and service spend increases," said Jeff Shenk, director of operations for Performance Loyalty Group. "As this is happening, however, standard dealership service marketing fails to attract many of these owners of older vehicles. Time erases the initial loyalty or relationship with the dealership."

The advantages to these programs for the dealerships include branding, little investment on the dealer’s behalf, and customer affordability.

In addition, 99 percent of customers who purchase prepaid maintenance plans redeem more than 80 percent of the plan elements.

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