1) The document discusses how converting vehicle purchases into service customers is key for dealerships to increase future vehicle repurchase rates and customer lifetime value. Research showed customers with more service visits had higher repurchase rates. 2) However, less than half of new vehicle owners return to the dealership for their first service, and one in five dealers do not have a process for contacting these customers. 3) Dealerships that call customers 30-60 days before their first scheduled maintenance have a 10% higher conversion rate of purchases to service compared to dealerships that do not contact customers.

1. THROTTLEDriving Trends
Issue 1 March 2015
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very dealer wants to drive more vehicle purchases
from their customer base but they often get ahead
of themselves, focusing more on attaining the
customer’s next purchase and not on getting those new
vehicle owners back into the dealership for service. As a
result, dealers often underinvest in service retention for
new vehicle owners, consequently missing the opportu-
nity for greater vehicles sales in the future. Through our
research, DMEautomotive (DMEa) found converting vehi-
cle purchases into service customers is key to increasing
vehicle repurchase rates and customer lifetime value.
DMEa analyzed over 250,000 vehicle purchase transac-
tions across 182 dealers in 2010, and we discovered a
strong correlation between post-purchase service history
and the likelihood a customer will repurchase another
vehicle. Over the course of four years, customers with
higher number of service visits had higher repurchase
rates than customers with low or no service visits.
Purchase Service Conversion
The Importance of
to
4-Year Household Vehicle Repuchase Rate
# of service visits after purchase
20%
10%
0 1 2 3 4 5+
23.6%
11.1%
16.7%
20.0%
21.5%
22.9%

2. However, the harsh reality is less than half of all vehicles
come back for service at the store. One in every two
customers with an established purchase relationship
are going elsewhere for service, and they are unlikely
to return when they are in the market for their next
vehicle. The objective is to move the retention number
up! Unfortunately, many dealers are missing the long-
term potential from their customers by not reaching out
to these new purchasers for their first service visit.
One reason for the low purchase to service conversion
rate is the lack of store process to drive conversion. In
DMEa’s 2014 survey of service center managers, we
found that one in five dealers do not have a process for
contacting customers to schedule their first service visit.
Getting a customer to make at least one service visit after a
vehicle purchase increases their repurchase rate by 560 basis
points from 11.1% for non-servicers to 16.7% for one-time
servicers. In other words, if a dealer can get an additional 100
new vehicle owners to return for service at least once, the dealer
will receive an additional five vehicle purchases over four years.
Based on these results, dealers who are more successful at
driving purchase to service conversion and service retention will
also realize the benefit of greater vehicle sales.
The bad news for dealers is purchase to service conver-
sion rates have decreased from 2013 to 2014 for both
luxury and non-luxury dealers.
If a dealer can get an additional
5
years
they will receive
new vehicle owners to
return for
over
ONCE
100
Purchases
service just
an additional
4
2
5
1
1
in every
customers with an established
purchase relationship are going
elsewhere for service.
out of
dealers do not have a process
for contacting customers to
schedule their first service visit.
12-Month Purchase to Service Conversion
49.2%
50.1%
50.2%
50.9%
2013 2014
Non-Luxury
Luxury
Source: DMEa analysis of purchase to service rates for a national sample of 238 auto dealers.

3. On the surface setting the customer’s first service ap-
pointment at time of purchase often seems like a good
process to try to convert purchasers to servicers. How-
ever, there are a few factors to consider that can lead to
missed opportunities within this process, including: the
customer’s experience, length of time at dealership for
purchase, and the maintenance interval. For example,
if a customer has a poor experience with the purchase
process or with the sales team they are going to be less
interested in that moment to think about or commit to
coming back for service in a few months. If the purchase
happened late in the day or during a busy rush of cus-
tomers, scheduling a first service appointment may not
even happen as the sales team will be focusing on getting
the customers out the door. Even if the sales person is
able to set up the first appointment, the chances of that
appointment being kept is going to be small as the vehi-
cle appointment is many months away. Realistically, the
customer is not likely to keep or show for an appointment
that was scheduled six or more months in advance.
Contacting the customer close to their scheduled main-
tenance due date is an effective strategy. At DMEa we
have proven calling customers 30 to 60 days before they
are due to schedule their first appointment has been ef-
fective for dealers. Dealerships that participate in a first
service appointment call have a 10% higher conversion
rate than non-participating stores. Calling customers
within 60 days of their scheduled first service date allows
the customer to choose a date that they can more reliably
make since it is closer in time. It also takes the burden
away from the customer to find time to call the dealer or
make an appointment online.
Is your dealership part of the 1 in 5 dealers who
don’t contact customers for their first service? Do
you have an adequate process to reach out to new
vehicle owners? Are you relying on the sales de-
partment to handle the handoff to service at time
of vehicle purchase?
Dealerships that participate in a 1st Service Appointment call have a 10% higher
conversion rate than non-participating stores.
Purchase to Service Rate - 1st
Appointment Call
How Dealers Contact for 1st Service Appt.
After Purchase
44.3%
49.2%
Non-Participating
Participating
+10% in retention for
dealers who called
60%Email
51%Live Call
24%Mail
20%Do Not Contact
20%Recorded Call

4. Converting purchasers to servicers is essential to a dealer’s long-term success. Engaging new purchasers
beyond the purchase also creates a lasting service relationship with your dealership as well. Here are
some actions you can take to convert these valuable purchase customers to servicers:
1
Source: DMEautomotive Service Excellence Study, 2014
Host new owner clinics. Give customers additional opportunities to learn about
their vehicle and get to know your dealership and staff.
Call the customer close to their service due date to schedule their first
appointment. This helps to introduce the recommended service interval to the
customer, and it allows them to choose a date and time that will work best for them.
Send a service reminder communication either by mail or email with in-
centivized pricing for their 1st visit to show you appreciate their business.
Pricing decisions can be made based on the customer’s vehicle (new vs. used; deal-
ership brand vs. other brand).
Remind the customer of their service appointment the day before the
appointment. 1 in 5 consumers indicated they missed an appointment merely
because they forgot! This helps to reduce no shows by not only reminding them and
but also giving them an opportunity to reschedule to a more convenient time
Call no-shows to reschedule their appointment. Most of those who missed an
appointment in the past two years did so because something unanticipated came
up.1
Show customers you missed them and still want their business.
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Contributors: Marcie Hopey