An estimated 100 million American households are enrolled in subscription-based programs that typically focus on music, movies, fitness and food. While subscription services are becoming ubiquitous, until now, there has never been a subscription model that enables consumers to maintain one of their most expensive investments: their automobile. Seeing this need, Performance Group has launched UltraCare Plus subscription maintenance for auto dealers to turn the concept of traditional “prepaid maintenance” on its head. The program gives dealers the ability to sell fully customized, automatically renewing vehicle maintenance subscriptions to both their sales and service customers.
Dealers currently utilizing UltraCare Plus are seeing significant, accelerating yearly revenue growth from their program with over 72% of their subscribers renewing for additional terms. Because of the auto-renewing model, there is a compounding effect on dealers’ service drive visits and revenue.
Today’s consumers, on average, already have nine active subscriptions and strongly embrace the subscription lifestyle. In fact, Lockhart Cadillac in Indiana is seeing a significant uptake in their Lockhart Unlimited subscription maintenance program, where sales and service customers can subscribe to oil changes, tire rotations, and inspections for only $109 annually.
By bundling a basic maintenance subscription with every pre-owned vehicle, Lockhart has also grown their pre-owned service retention from under 15% to over 65% since program inception. With a 78% renewal rate on the annual subscriptions, they are seeing customer pay service visits more than double over last year, generating over $900K in revenue from the UltraCare Plus program so far. Because of the compounding nature of the program from automatic subscription renewals, the profit will almost quadruple to $3.5M in the next two years.
“Consumers are very receptive today to subscription-based services,” said Jeff Shenk of Performance Group. “This ‘set-it-and-forget-it’ mindset fuels the double-digit growth in both service visits and upsell revenue our clients are experiencing. When a dealer can sell plans as an easy upsell in the service lane that is both attractive and affordable for consumers, it’s a no-brainer – and a win-win for both,” added Shenk.
Dealers interested in discovering what a subscription maintenance program can do for their store can visit ultracareplus.com and enter a few data points for a customized ROI calculation.