Creating Loyal Employees

By The Editor  //  2012, December  //  Comments Off on Creating Loyal Employees
Creating Loyal EmployeesNot every boss is as generous as Howard Cooper.

When the 83 year-old retired and sold his successful car dealership in Ann Arbor, he decided to say thank you to his staff by giving them $1000 for every year they were employed at his company. To some, this meant receiving a check for up to $46,000 – a sum of money most had never seen all at once.

When asked why he chose to be so generous, Cooper explained that he wanted to make as big of a difference in their lives as they had in his. This illustrates the kind of boss Cooper was. His employees stayed with the company, not because they had any idea they would be rewarded so generously, but because Cooper created the kind of atmosphere where employees wanted to stay.

Creating the same atmosphere can be possible in any organization by focusing on a few key areas.

Be Honest and Fair

As the saying goes “You reap what you sow.” You can’t expect your employees to be truthful with you if you aren’t being truthful with them. Making sure that your employees trust you will help keep them honest as well. Honesty breeds loyalty and your employees will come to recognize you and your organization as having integrity. Also, remember to always treat people with respect if you want to be respected in return. Many leaders wish to instill fear in their employees, but a good and thoughtful leader knows that fear and respect are vastly different.

Build a Communicative Environment

Employees won’t naturally feel that they can approach you with questions or concerns unless you encourage them to do so. These conversations shouldn’t feel awkward or threatening, but should be considered a sign that your employee is committed and invested in the success of the company. Being open to dialogue will only help the entire team find solutions together.

Effective management means building a community of individuals who are all involved in the company’s daily operations as well as creating an environment where people and ideas are truly encouraged and valued.

Genuinely Care, and Show It

The greatest resource your organization has is the people who come to work every day. Don’t view employees as employees, but as people first. Explore different ways in which you can truly connect with them and engage in fruitful dialogue. The more you know about your team members, their hobbies, dreams and goals, the more you’ll know about what they have to offer.

Also, once you see your team as actual people, you’ll be much more open to the idea of offering solutions that can help them do a better job, such as more flexible hours or telecommuting. This will in turn naturally breed loyalty as your employees will view your company as one that truly cares.

Give Employees the Chance to Shine

The more you get your staff involved in all aspects of the business, the more they will be allowed to shine. This will not only feed their need to be valued, but it will allow you to see the potential in certain employees that are ready to advance to the next level. Also, the more input your employees have in aspects of your business, the more invested they will become in the ultimate success of the company.

It’s not necessary to give employees $1000 for every year they’ve been with your company, but in order to create solid bonds and loyalty, you need to create an environment where the entire team can be heard and can feel valued.

Read more at 

Source: Business 2 Community, November 1, 2012.  Author, Erin Palmer

What are the best approaches for an employer to gain trust with his/her employees?

Besides money, what are other ways that you can incentivize loyal employees?

How can you/your manager better create a communicative environment in the workplace?


Do You Really Know What Your Customers Think of You?

By Mike Gorun at Performance Loyalty Group  //  2012, December  //  Comments Off on Do You Really Know What Your Customers Think of You?

Do You Really Know What Your Customers Think of You?How is your company’s customer service? Pretty good? Sure about that? According to statistics provided by Bain & Co., 80% of companies surveyed said that they offer a superior customer service experience, but only 8% of their customers agreed with them. Ouch.

 Okay, so you’re not sure about your customer service. But you think it’s pretty good because your online reputation is good and you have five thousand followers on Facebook. Well, think again. In another customer relationship study conducted by IBM in 2011, companies were surveyed as to the reasons why their customers followed them on social media sites. The companies listed discounts among the least important reasons, but when the customers themselves were surveyed, they listed discounts as a major reason for following a company on a social site.

 For a majority of businesses, there is clearly a disconnect as to how they believe they are viewed by their customers and how their customers actually view them. One reason for this is because so many dealerships are focused on pushing out marketing messages—whether it’s via e-mails, snail mail or other advertising channels. Even with social media, which offers an opportunity to engage with customers, many businesses fall short because they are focused more on responding to criticisms or coming up with witty or engaging content—than what the customers are saying. In short, most businesses aren’t really listening to their customers.

 In today’s competitive environment, simply having a great product or service and providing a good customer experience isn’t enough. Customers now want a fantastic experience—they want to feel appreciated for their business. You may roll your eyes at that, but if you do, you will be overlooking profits. In return for a fantastic experience, customers reward you with their loyalty. We’ve all heard the statistics:

  •  A 5% increase in customer retention can increase a company’s profitability by 75% (Bain & Co.)
  •  80% of your company’s future revenue will come from just 20% of your existing customers (Gartner Group)
  •  Attracting new customers costs your company five times more than keeping an existing customer (Lee Resource International, Inc.)

 A CRM may give you a response rate and ROI on dollars spent on this month’s campaign, but it gives you no indicator of what tomorrow’s campaign may do, or how customer perception will affect your revenue next year. A loyalty program, on the other hand, gives you the ability to answer the questions, ‘what do your best customers care about most?’ and ‘why are they doing business with me?’ With a loyalty program, you can easily identify, track and promote to individuals who are most likely to become loyal, long-term sources of revenue.

 How do your customers view your business?

How do you track how your customers think of your business?

What are other benefits with using a loyalty program?


A Case for Dealer-Branded Service Retention Programs

By Mike Gorun at Performance Loyalty Group  //  2012, December  //  Comments Off on A Case for Dealer-Branded Service Retention Programs

A Case for Dealer-Branded Service Retention ProgramsDealers using loyalty programs or prepaid maintenance (PPM) programs designed specifically for their dealership’s client demographics and geographic location enjoy significantly higher levels of customer retention and service up-sell. In addition to an increased program ROI, dealerships that utilize a personal dealer-branded PPM see continual increases in vehicle repurchase intent.

 In fact, because these plans are captive service plans – meaning the customer is required to return to your store for service — they retain far more customers than similar non-captive OEM-branded plans and are significantly better than NADA retention averages in general.  

 Consider how dealer-branded or dealer-centric maintenance programs differ from OEM branded programs:

  1. They brand your dealership: OEM programs brand the OEM. Most dealers consider the first objective the more important of the two.
  2. Promote captive service: Customers that purchased a dealer-branded program must return to the dealership where the plan was purchased to redeem the service. Conversely, the OEM branded programs allows your customer to service at any like branded dealership, and in many cases it may be your nearest friendly competitor.
  3. They reach a larger customer base: Generally OEM programs limit the sale of their PPMs to new and certified pre-owned vehicles only. The biggest difference is that a dealer-branded program will reach a much wider customer base by allowing the sale of the plan in the service lane (selling to existing service customers) and on competitive-make used product. It is not unusual to see a metropolitan service department selling 300-400 plans a month to their existing customers.
  4. They deliver more ROI to the dealership: OEM programs contain predetermined plan components and generally pre-established suggested retail pricing. Therefore, the dealership’s gross profit is determined by the OEM. With a dealer designed program, the plan elements, service reimbursement rates and retail selling price are all determined by the dealer, thus allowing the store to design in whatever profit they choose.
  5. They lower administration fees and higher revenue recognition:  Dealer-branded programs bypass many of the administrative fees associated with OEM and some third party programs while recognizing all of the plan forfeiture and maintaining the reserve accounts internally.

PPM or Loyalty Program?

There are other types of retention solutions on the market that utilize customer incentive cards and numerous marketing programs that seek to influence retention through email and print ads, but none of them have the lasting shelf life and growing customer acceptance that PPM and loyalty programs offer.

  • Loyalty programs: Like airline mileage programs, they reward customers for their loyalty to the business. They earn rewards, cash or dealership discount points that can be redeemed only at the issuing dealership.   
  • PPM plans: Bundled services such as LOF changes, tire rotations and other routine vehicle service needs designed to encourage the plan holder to return for service more frequently while remaining loyal to the dealership.

Dealer brands can be more powerful then OEM brands

The first automotive loyalty programs were utilized by dealers in 2002. At this time more than half of all the US dealerships employ some type of loyalty initiative. Many through the OEM sponsored programs of Ford, GM and Nissan.  But what about the dealerships with multiple brands where the OEM programs could do more harm to the remaining dealer brand than the good they provide to the other?  Multi-brand dealership groups need a solution that will allow cross-selling and reward redemption between all of their brands. OEMs simply can’t provide that type of solution, nor are they expected to.  Think of the brand Starwood Hotels and Resorts. We all know them as The Westin, Sheraton, The W, Le Meridian and others. Starwood wants to encourage their loyalty members to utilize all of their different brands but under one common moniker. Dealership groups that have multiple brands may very well benefit from this practice as well and start realizing the benefits it provides to them in cross-brand marketing, (not to mention the vast amount of customer purchase data and analytics it provides).

The evidence for dealer-branded retention programs is strong. This proof emerges from a recent 72-dealership study by LoyaltyTrac, which examined 1.7 million repair order transactions over a period of more than two years at dealerships that engaged in a dealer-branded loyalty rewards program.

According to the study, retention of members – those customers who voluntarily opted to use the program — is 56.98%, compared to the NADA average of 20%. OEM loyalty programs that seek to brand the OEM rather than the individual dealerships have hoped to increase retention to 55% with an array of less effective incentives, internal OEM branded loyalty programs and market saturation advertising.

A recent survey by DME Automotive revealed similar results. “Both prepaid and OEM-provided maintenance plans have a powerful impact on dealer service retention,” DME said. In fact, the automotive marketing company noted these plans drive retention to as much as 60% versus typical post-warranty rates of 22% to 40%.

The LoyaltyTrac study also found that those customers that were engaged and joined a dealership branded loyalty-rewards program:

•           Visited their service department more often, every 2.87 months compared to every 5.95 months for customers who did not join the program.

•           Spent $982.34 in retail service annually compared to $384.55 for non-loyalty members.

•           Spent on average $235.01 on a customer-pay RO compared to $191.32 for non-loyalty members.

The evidence seems clear: Loyalty and prepaid maintenance (PPM) programs improve overall service business, drive the customer back more frequently, provide a new source of service lane revenue and ultimately influence vehicle repurchase intent.

Read this article in Fixed Ops Magazine.


Why You Must Have a System for Resolving Customer Complaints

By Mike Gorun at Performance Loyalty Group  //  2012, December  //  Comments Off on Why You Must Have a System for Resolving Customer Complaints

A recent study by the Tempkin Group found that it takes an average of five clients giving positive referrals for your business in order to get one new client. Yet it takes only two disgruntled customers speaking negatively about your business for you to lose one customer.

You do the math…that means it’s twice as important to ensure that you don’t have unhappy customers than it is to maintain good relations with your happy customers. This doesn’t mean you shouldn’t focus on the latter—of course you should. But it also means that if you don’t have a system that empowers or motivates your employees to solve customer problems, you may be feeling the negative impact on your business.

Most people don’t set out to dislike or become a detractor for a business. The reason this happens is when a satisfied or neutral customer encounters a problem or an issue that isn’t resolved. At that point there is an immediate decline in loyalty. However, if the problem is handled well, the customer’s loyalty increases above his or her original loyalty level.

Why You Must Have a System for Resolving Customer ComplaintsThe biggest determining factor as to whether a customer becomes or remains loyal after a problem is whether that problem has been resolved. Unfortunately, many times employees believe that they are resolving a problem, when in fact they aren’t.

This happens more often than you might think. Employees jump to a solution for the customer; quote company policy back to the customer; or go for the easiest solution, which is often a discount. The end result is an unsolved problem and a frustrated customer.

To ensure that your customers feel like their problems are resolved in a satisfactory manner, be sure that every employee follows an established process for customer complaint resolution. These steps should include acknowledging the problem, taking down facts, taking ownership of the problem, ensuring the customer receives a resolution to the problem and following up to make sure they are happy with the resolution. If one or more employees don’t follow this process, make sure there are consequences so that next time they will be motivated to follow the process.

It only takes two detractors to undo all the hard work and effort you put into building a positive image that results in one new business referral. You may want to consider spending as much time training employees in customer complaint resolution as you do in coaching them how to get referrals.

How does your business build a positive image?

What can you do if you notice a decline in customer loyalty?

What steps does your business take when resolving a customer problem?


Heartfelt Greetings & Bountiful Blessings

By Kathy Winslow  //  2012, December  //  Comments Off on Heartfelt Greetings & Bountiful Blessings

Heartfelt Greetings & Bountiful BlessingsMay your holiday season and the upcoming year be filled with much joy and success. All of us at MediaTrac look forward to working with you – and hearing from you – in 2013!

Happy Holidays!

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