By Jeff Tobaben, Evolve Performance Group
For years, we’ve been chasing Customer Satisfaction in the automotive industry. Here’s my question – Why are we aiming so low? Satisfaction is meeting the most basic of customer expectations. Is the new car full of gas? Is it cleaned and ready for delivery on time? Was the vehicle fixed right the first time? These are things that customers expect of us.
We don’t get extra points for doing what we’re supposed to do. However, if we don’t meet the basic expectations, we can lose a customer forever. A better way to describe satisfaction is that it is the absence of dissatisfaction.
Satisfaction surveys typically are poorly-designed and don’t produce data that helps dealers drive their business. Granted, it’s good to know if you’re missing the basics. However, because of the nature of the typical satisfaction survey, dealers are unable to know if increasing a score in one area will positively impact their business.
Unfortunately, OEMs hold dealers accountable for the scores, thereby forcing dealers to campaign for scores that really don’t change that much. As a result, we beg customers to mark “Completely Satisfied” so that dealers stay in the good graces of the OEM. There’s a better more impactful way to measure – Customer Engagement.
Customer Engagement is a measure of the emotional attachment that customers have with those they choose to do business with. If you’re thinking of acquiring a dealership, or selling one, the level of customer engagement is a helpful indicator as to the value of the organization.
This measure ties directly to business outcomes such as PRU and $/RO. Measuring Customer Engagement helps dealers know exactly which things to concentrate on – called Drivers of Engagement – to build their business and increase financial performance. From research we’ve done with hundreds of dealerships, here are some “drivers of engagement”:
- Talent Matters – Customers that are more engaged tell us that they have a very high opinion of the people that work in your dealership. They demonstrate that they take a genuine interest in the customer rather than just funneling the customer through the dealership’s process. How do you fix this? Look at your employment brand, hiring practices, compensation plans, etc. Are you getting the very best candidate that exemplifies the brand image you want to project to the community you serve?
- It’s about customer experience. We sell commoditized products. We must learn that treating the customer the way they want to be treated is the most important thing to them. You must ask yourself – What’s different about purchasing a vehicle here versus another dealership? Here’s a tip – think about your non-negotiables as a business. What are non-negotiables? They are something that you require your staff to do that builds a better customer experience. An easy example is Chick-Fil-A. They never say, “You’re Welcome,” or “No Problem.” It’s always, “My Pleasure.” This is an easy example, but it is a cultural imperative. To deliver a differentiating customer experience, you must decide what sets you apart and stick with it.
- Price doesn’t matter. At least, it doesn’t matter as much as you think. You must be in market and/or competitive, obviously. Here’s a way to think of it. Price is most relevant in the absence of a real relationship with the customer. Price becomes topical if we haven’t provided a wonderful experience. We basically end up buying the customer’s business. How many times has the deal that was $3000 behind invoice, resulted in a bad satisfaction survey? Maybe there’s a correlation there.
- Expertise matters – Your customers can gain information immediately. It’s in their pocket in the form of a smart phone. When they come to us, they expect us to talk to an expert. This doesn’t mean we need to feature dump about our product, they’ve likely seen all of that online. We should match our product knowledge (Sales and Finance) to the customer’s unique needs and situation. We must learn to educate rather than sell. Paint a picture of how your dealership and the vehicle complements their lifestyle.
Here’s something else to consider. If you know the level of engagement of your customers, you have a better sense of the value of your business. In research that we’ve conducted, we can place customers into four distinct categories of engagement.
- Fully Engaged – They are emotionally and rationally attached to your business and they represent 23% higher financial performance than the average customer.
- Engaged – These folks are rationally attached to your business. They are worth 7% more than the average customer.
- Not Engaged – This group is indifferent about your business. They are the average customer.
- Actively Disengaged – They don’t like you. Yet, they may still buy from you. That is, if the price is low enough. We find that to “win” this customer, we must discount our products by 13% on average. We’re “buying” their business.
Jeff Tobaben is president and CEO of Evolve Performance Group. Evolve uses employee and client engagement surveys to align an organization’s leadership development and manager training to achieve high levels of engagement leading to improved business performance and organic growth. Tobaben can be reached at email@example.com or 1-979-383-2965.