By Jeff Tobaben, Evolve Performance Group
Whether you are buying a new dealership because it was underperforming or you are shining up your dealership for sale, it’s time to explore implementing employee and client engagement business strategies. These strategies need to be aimed at building lasting relationships.
Having been around the retail automotive business since 1986, I’ve seen (and done) most of the “tricks of the trade.” Our slick and manipulative sales tactics were the order of the day. Wait, some stores still operate that way today! What if the customer asks about interest rate? Batten down the hatches! We must avoid answering at all costs!
We use language such as “it depends on your credit,” or “depends on the car you’re buying” or your down payment, etc. It’s just a question – answer it! Chances are, the customer already knows the answer anyway. A tactic like this only serves to disengage the customer. The disengagement that our customers experience has driven them to rely on third parties like True Car. Let’s take our futures back!
Relationships – the real competitive advantage
Years ago, delivering a car with a full tank of gas was a competitive advantage. Today, it’s a non-negotiable that serves to create more customer angst if it’s not done versus customer delight if it is done. Times have changed. New vehicles are of much better quality and value. The gap in dependability has narrowed in many cases. We now find ourselves in a heavily commoditized industry. I can buy any make and model from literally anywhere. Customer shopping patterns and needs have changed, yet we haven’t kept up with those changes.
So, what’s the next competitive advantage? Is it a new sales technique? A new marketing program? A new desking system? Better rates and residuals? Refreshed sheet metal? While those items may contribute, the real competitive advantage is the relationships that you build. First, with your employees, then with your clients. And, it goes in that order.
Employee relationships – also known as Employee Engagement. Let’s get clear on what employee engagement means. It’s not making everyone “happy.” Employee Engagement is a quantifiable condition that predicts business performance. Employee Engagement is a business strategy. It is aligning employees to the business outcomes that you expect. The first step is to measure engagement so that you understand the health of the relationships you have with your team members. Then, you must set forth on building a culture of engagement by educating managers and employees alike on what it means and how you leverage it to get business results.
In work completed for one high-line auto manufacturer, we surveyed and coached 171 dealerships. We learned that dealership teams that had high levels of employee engagement were averaging $947 more per new retail unit. Additionally, stores that increased their employee engagement from one survey period to the next, saw in increase in market share, sales and service – and a 51% increase in gross profit margin. Results are summarized in the info graphic below.
Client Engagement vs. Customer Satisfaction
Let me start out by saying this – Customer Satisfaction does not impact business performance. Customer satisfaction is the absence of dissatisfaction. It harms your business if you dissatisfy the customer, however, it doesn’t advance your business if you do it right. You simply remain neutral. Client Engagement on the other hand, is the measure of the health of the relationship between your employees and the customers they serve. The depth of these relationships impact a customer’s spending, repeat business and referral patterns. Let’s illustrate the difference between satisfaction and engagement.
A component of satisfaction may be having the car cleaned and ready for delivery when promised. As a customer, this is a basic expectation. If the basic expectation is met, then the customer gives you a mental check mark. If the vehicle is dirty and delivered late, the same customer may become very dismayed at the level of service. As mentioned earlier, satisfaction counts more against your dealership for doing it wrong, than it does for you doing it right. As a default, many retailers feel that price sells cars. Our position is that price is most relevant in the absence of a real relationship.
So, what does customer engagement look like? It’s keeping the customer’s best interests at heart. Recommending products and services that are perfect for them. It’s understanding their needs as individuals. It’s about personalization. It’s about taking a genuine interest in the customer. Some possible examples – Pre-setting the customer’s radio stations. Pairing their telephone. Leaving a handwritten note. In short, doing something that will make the customer feel special, understood and valued.
It may sound a little like common sense to treat your customers well. The problem is that most dealerships assert that they do, yet their processes and people doing anything but. Many retailers force the customer through their process. That’s really engaging! You’re telling me that I must buy your way and not my way. I must drive the car before I get a price. I must wait to talk to a Finance Manager before I get a rate. Help me buy. Don’t try to sell me.
More importantly, most stores don’t set their customer-facing employees up for success. Many stores battle to attract good talent and keep them. Now there’s a solution. Learn how to engage and empower your employees to take care of your customers. Train them and give them the resources they need to be successful.
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 firstname.lastname@example.org or 1-979-383-2965.