If your immediate response to this question is an out and out ‘no’, possibly because service plans are considered the domain of the franchise network and have too much red tape or paperwork associated with them, stop and think about all the things you may have adopted from the sector. Many of the products and services such as courtesy vehicles, insurance products such as Gap, MOT and service reminders and cloud-based operational systems were all adopted first in the franchised sector whilst forward-thinking independents were quick to follow suit in order to show customers their businesses could deliver just as highly.

Could the simple service plan offer you a way to further encourage your customers to return to your business?

Whilst service plans provide a way for customers to budget for routine servicing by paying a set monthly amount or a one-off, upfront cost, in general, they do not fall under the auspices of the Financial Conduct Authority so if your business is not FCA authorised, this should not be an obstacle when considering selling service plans.

There are several service plan providers on the market so you don’t have to manage the payments yourself or develop your own marketing materials to promote them, yet your garage will still reap the benefits of returning customers and customer loyalty.

Service plans encourage customers to return to your garage for their vehicle’s next service simply because they will have paid for it by the time their service is due. As well as enabling motorists to better manage their finances and not have to find the money for a larger than usual outlay, a service plan means a customer fixes the price of their next service irrespective of any price increases. Thus, service plans are good for your customers and good for business.

Speaking at industry magazine AM’s aftersales conference, Angela Barrow, managing director of Emac’s motor service plans UK and Europe, said service plans are not a hard sell, but are something which customers want and they just need to be offered the product. She also pointed out that motorists will own an average of 9.4 cars in their lifetime, down from 13 as people are keeping their cars longer thereby increasing the need for regular servicing to keep cars in the best condition for the road.

According to Barrow, figures from Emac show customers are 60% more likely to return to the garage or dealer for servicing if they purchased a service plan compared to 40% who are not service plan holders.

With research from online aftersales portal whocanfixmycar.com revealing customers have little or no loyalty to the business which previously provided the service or repair for their vehicle, anything which a garage owner can do to boost retention is a bonus. The research found that fewer than one in three drivers said they would return whilst a staggering 72% said they intended to shop around. Arguably, the website’s users are already considering shopping around, hence the use of the site in the first place, however, the company’s marketing director Alex Rose said the consumer mindset is already changing as people are more likely to make use of comparison websites.

By signing up to a service plan, customers are effectively pledging to return to your business for their vehicle’s next service and in an era when there is so much choice, giving your customers a good reason to return cannot be ignored.

As ever, we’re interested in your thoughts. Do you offer service plans? What’s your take-up rate? What is your customer retention rate among those who have service plans compared to those who don’t have one? And if you don’t offer service plans, why not or are you considering offering them in the future?

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