Honda dealer's fleeting perk is now a long-haul benefit

The beginning of the last decade was a trying time for Adam Silverleib's family dealership, but the challenge of being a single-point dealer in a congested market also became an opportunity to rise.

To stand out from their competitors, the third- generation dealer and his father, Ira, launched SilkoCare in 2010. The bundle of services was created to show current and potential customers the value of purchasing vehicles at Silko Honda as opposed to one of the eight competing Honda dealerships within a 40-minute drive from their Raynham, Mass., store just south of Boston.

The SilkoCare program included 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.

Building a service brand around three generations of Silverleibs treating customers like family paid off for Silko Honda. Silverleib says customer retention rates increased in the service department over the years, but the long-term effect forced him to go back to the drawing board to adjust the service program.

"People were coming in and getting their free service, but the first time they were hit with the option to pay for their service was at 30,000 miles," Silverleib told Fixed Ops Journal. "Two years of 25,000 miles worth of service at 5,000-mile intervals was great service, but after their fifth free service provided under [SilkoCare] they had to pay $350 to service their vehicle."

He adds: "The program was having a negative impact of customers peeling off. We were trying to capture the aftermarket world, but we struggled to retain them."

The program was rechristened SilkoCare Plus in November 2017 and Silverleib says his dealership has taken its "why buy here" proposition from a short-term perk of free maintenance into a long-haul benefit that customers have embraced.

The SilkoCare Plus program covers every new-vehicle purchase and includes a lifetime powertrain warranty and unlimited free car washes. But the rebranded program dropped the two years or 25,000 miles of service and replaced it with lifetime "Buy 1, Get 1 Free" oil changes.

Buyers of used vehicles that are 8 years old or more or that have 85,000-plus miles also are covered by SilkoCare Plus minus the program's lifetime powertrain warranty.

In the two years since the new program took effect, Silverleib says service department net income grew by nearly 30 percent and overall repair orders increased by nearly 14 percent.

Silverleib says his customers can get their vehicles serviced wherever they like and still be covered by SilkoCare Plus. They just have to keep service records proving their vehicles receive oil changes every 5,000 miles and tire rotations every 10,000 miles.

"Our approach doesn't make people feel like they're getting shackled to the dealership," says Silverleib on his SilkoCare Plus approach. "We made it a really easy price-point. Right now, the price is $59.95, which technically covers two synthetic oil changes."

Substituting the two years or 25,000 miles worth of service with the "Buy 1, Get 1 Free" oil changes was heavily influenced by the dealership's 58-year-old identity.

"The original SilkoCare package offered customers of new-vehicle purchases a better reward of free maintenance for the first two years or 25,000 miles of ownership than the customer that bought the used vehicle," Silverleib says. "We felt that the original SilkoCare bundle was excluding some of our customers on the service component. The 'Buy 1, Get 1 Free' oil changes makes sure all of our customers feel included, or like they're our family."