By Ryan Hanlon
Service contracts sold by RV dealers on reinsurance programs often include a “tieback” provision which brings customers back to your dealership or a facility in your repair network when a breakdown or failure occurs within a predetermined radius — typically 100 miles, although state limitations may apply.
The benefits to your fixed operations profitability are obvious, but tiebacks can also improve your customers’ ownership experience and can help promote repeat business. Let’s discuss three key facets of service contract tiebacks: service absorption, quality control and future sales.
1. Service Absorption
Tiebacks drive fixed ops profitability by helping you control your primary market area. When your customers travel outside your PMA, the same benefit extends to the nearest shop in your repair network.
By joining a repair network, you should also benefit from tiebacks on service contracts sold by other dealers. Your customers — and theirs — can hit the road knowing a qualified shop will likely be within reach if something goes wrong.
2. Quality Control
RVs are assembled from parts, components, furniture and appliances from numerous providers. Much like snowflakes, RVs of the same make, model and year may appear indistinguishable from a distance, but no two are exactly alike.
Similarly, no two RVs will travel the same path. Some rarely leave the driveway. Others never park in the same place twice.
Bringing an RV in need of service back to the selling dealer will almost always be the owner’s safest bet. And when trouble strikes far from home, tiebacks give your customers some assurance that repairs will be completely and competently performed.
3. Future Sales
In an ideal scenario, your next service customer will notice the new models on your lot as they pull in, find themselves with a few minutes or hours to kill, and be approached by a friendly sales professional offering top dollar for their trade-in.
Every visit to your dealership increases the odds your customer will buy their next RV from you. Winning and keeping their service business ensures future visits.
Tiebacks are an increasingly popular tool, but they’re not the only reason you should be on a comprehensive reinsurance and F&I program. If you want to learn more, we are always available for a quiet, confidential conversation. Feel free to reach out today.
Ryan Hanlon is a managing director for Portfolio, a leading provider of reinsurance and F&I programs for RV dealers, and a 16-year industry veteran. For more information or to schedule a confidential consultation with a Portfolio reinsurance expert, email inquiry@portfolioco.com today.
