Automotive News Canada - June 2019 - F21

FIXED OPS JOURNAL

CONTRACTS
continued from previous page

tieback to customers.
He says the service department sells about
10 service contracts with a disappearing deductible each month, compared with as many
as 70 in the dealership's finance and insurance
department.
"There is a real opportunity to get service advisers in the quick lane" to pitch the product,
Hanson says.
In addition to its branded maintenance
package, the dealership offers other service
contracts that have disappearing deductibles.
"The disappearing deductible is really good
because it brings [customers] back to us," says
Josh Petty, the dealership's service manager.
Portfolio works with about 16,000 dealerships to sell service contracts, says Greg Hoffman, the company's managing director. All of
the contracts have tiebacks, Hoffman says,
and about one-fourth include disappearing
deductibles. Both features enhance service
customer retention, he says.
"The more [a customer] is in the dealership,

Market basket

the more you can impact the experience,"
Hoffman says. "That results in future sales."
Many service contracts allow service departments to release work covered by a tieback to another dealership or independent
repair shop if it would be too inconvenient for
a customer to return to the selling dealership,
Hoffman says.
Some dealerships offer a loyalty program to
buyers of service contracts with tiebacks that
earns them a free oil change after a certain
number of visits, Hoffman says. Others give
tieback customers "priority" status, which entitles them to such benefits as delivery of a
loaner vehicle and discounts on some maintenance items, he says.

Loyalty numbers
Cascade Auto Group in Cuyahoga Falls, Ohio,
offers a disappearing deductible, but not a tieback, as an option in the service contracts its
sells, says Michelle Primm, the group's co-owner and general manager. The group sells Subaru, Mazda and Audi vehicles on one campus.
"We can pull a loyalty report at any time to
see what percentage of our customers are re-

Tiebacks and disappearing deductibles
are popular features of vehicle service
contracts that tie vehicle owners to the
selling dealership. Contract vendors
offer these tips for marketing the
features effectively.
 Bundle them in an attractively priced
package.
 Include extras such as free towing
and loaner vehicle.
 Enroll buyers in loyalty programs that
confer priority treatment.

turning to us for their claims, so that we can
adjust our policy in the future if business demands it," Primm says.
Cascade's contract provider is Resource Automotive Inc., a division of Assurant Inc. Matt Mahar, Resource Automotive's regional general
manager for Ohio and Indiana, says Cascade
customers whose contracts include disappearing deductibles are significantly more likely to
return to the dealership for service than those
whose plans don't include the feature.
Mahar says, "Our pitch to dealers is that you
would be surprised how many people will
drive 100 miles to save $40 or $50." 

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JUNE 2019

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Automotive News Canada - June 2019

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