After Toyota Care, dealer retains customers
Caldwell: Big opportunity
The first new-car buyers to receive Toyota's two-year free maintenance plan when it launched in late 2010 are now having to pay for oil changes and service.
That's a big opportunity for Toyota dealers, said Jay Caldwell, chairman of Toyota's National Dealer Advisory Council and dealer principal of Caldwell Toyota in Conway, Ark.
"We have to pay close attention to ensure we retain those customers, and not present them with overpriced services and run them off," Caldwell said.
Coverage under Toyota Care includes two years of oil and filter changes, tire rotations, lubrication, a 19-point inspection and roadside assistance.
Toyota Care's mission is twofold: Get customers in the habit of returning to the dealer for service; and reassure them in the wake of Toyota's unintended-acceleration recall crisis.
But now those early customers are having to pay their own way. Is it working?
In the first three months since the initial Toyota Care customers started having to pay for their service, dealers gained an incremental 400,000 customer-paid service visits, said Bob Carter, senior vice president of automotive operations for Toyota Motor Sales U.S.A.
"Customers who come through the service drive have three times the propensity to buy another Toyota," Carter said. "We typically run 65 percent [repurchase] loyalty at the brand level. We love to see that, but the inverse is that 35 percent are going elsewhere. We have an opportunity to lift that higher."
The program has been a win-win for Caldwell. Toyota's reimbursement rates for Toyota Care work typically have been higher than what Caldwell would charge a customer. What's more, the dealership has had customer-paid service work increase 30 percent, simply because customers got into the habit of coming to his store for service.
Still, Toyota has to overcome the idea that independent shops are more convenient and less expensive than dealerships, Carter said.
Toyota has mystery-shopped dealerships and nearby independents, and found the independents often are more expensive.
"The perception is that's not the case," Carter said. "But the reality is different."
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