Maintenance plan giveaway builds profits

Sanderson Ford in Phoenix offers a pop-up coupon for a two-year maintenance plan on its Web site, sandersonford.com.

The promotion is paying off as an incentive for new-vehicle sales and boosts repeat business in the shop. Prospects complete a form on the coupon that requests their contact information. Last year, the coupon generated 519 leads and 48 new-vehicle sales.

Reporter Donna Harris spoke with Dave Tedder, Internet director for Sanderson Ford.

What prompted you to offer the coupon?

National statistics I see show 87 percent of automotive shoppers use the Internet for research, but unfortunately only about 10 percent actually do an online lead. So we need other ways to prompt people to take the next step and give the dealership some level of commitment. This is an inexpensive way to provide value without the typical hype and get the customer back for fixed ops.

How does the online coupon work?

If you fill the form out, you get the plan with a purchase. The customer is given a certificate to print and bring in. The customer's information also comes to us as a lead in our CRM system.

It is the 24-month/25,000-mile Ford Premium Maintenance Care plan. The maintenance plan is offered by Ford. We write a policy for the vehicle purchased when the coupon is presented. Technically, they could use it at any Ford dealer in the country, just like Ford's extended warranty.

What does it cost to offer the freebie?

It costs us $190 per vehicle, and we charge it to advertising. Our average total gross on Internet sales is about $2,800 per copy, so it is a great profit builder.

Why not just offer a discount coupon?

I have tried $299 to $500 off coupons before and feel that customers view it as only a come-on when you are spending $20,000-plus. It helps ease the way for the balance of the finance presentation.

Why do you promote the maintenance plan?

Our finance department uses a menu system and finds a majority of people like the maintenance feature and will purchase it otherwise or upgrade the term and miles when getting it for free. We do find greater retention in service and, with warranty claims at an all-time low, maintenance is king. We typically run 50 percent-plus penetration for maintenance and service contract sales and only offer Ford products.

Doesn't the coupon also promote a rewards program?

We also push the Ford Owner Advantage Rewards Program (Ford's free program rewarding repeat customers). The dealership adds $35 for the first oil change as well as a $100 credit for use in parts or service. Car washes are also included. We rebrand it as “Sanderson Owner Advantage” when these extra benefits are applied.

You can also bundle it with Automate Astroglaze, Ford's DentCARE and Ford's TireCARE programs and you have three years of coverage. We call it Sanderson Premium Owner Advantage for $395. This is available for new or used vehicles.

How much exposure does the coupon get?

Our Web site is well placed with the search engines. We usually get 12,000 to 15,000 unique visitors monthly.

What percentage of those who fill out the online form for the freebie actually buy vehicles?

It closed at 9.25 percent last year and is tracking 12.5 percent this year. It seems like a small price to pay to see the customer return every three to six months for a couple of years.