A few years ago, Adam Silverleib found his family's Honda store facing a problem no dealer wants to confront: Not one but two new Honda dealerships were going to open within 15 miles of his Raynham, Mass., location.
Competition in the Boston market is tough to begin with. Even after the downsizing of the Detroit 3 retail networks, the region is still heavily over-dealered, making for intense pricing and margin pressure. At times, Silverleib said, stores like his may average only about $50 in profit on new-car sales.
With the addition of two points nearby, "the landscape was totally changed," said Silverleib, who runs Silko Honda with his father, Ira. "So we had to take a new approach and create something that gives people a reason to come to Silko."
That something turned out to be an offering called SilkoCare.
Launched in summer 2010, a year before the new stores opened, SilkoCare is a package of services included with every new and used vehicle sold at the dealership. It includes free maintenance for the first two years or 25,000 miles of ownership, discounted oil changes after two years, unlimited free car washes and a lifetime powertrain warranty.
The response was much better than Silverleib expected. His service business has taken off, and the increased stream of service customers has opened opportunities for new-car sales, which are holding up amid the new competition. Used-car sales have increased, too, as has net profit.
Perhaps most importantly, SilkoCare has developed fans like Michael Froio, owner of a 2014 Pilot and a 2012 Ridgeline, who chooses Silko over several other dealerships near his workplace.
"Free maintenance is a big deal for me," said Froio, a law enforcement officer. "I trust their service department. They know my car. And I tell everyone in my family and all of my friends to go to Silko."