Browsing articles from "July, 2013"

The Transformation of Employee Loyalty in Gen Y

By Mike Gorun at Performance Loyalty Group  //  2013, July  //  1 Comment

The Transformation of Employee Loyalty in Gen YIn the past, it wasn’t uncommon for employees to spend their whole working lives with a single company. People would start in their late teens and many would retire without ever having worked anywhere else. However, businesses, in general, and dealerships, specifically, are experiencing less loyalty from employees today than ever before in history. Why?

According to Orlando Barone of The Wharton School of Business, Gen Y has been educated and trained to be transactional managers and leaders. “I got the impression they perceived themselves more loyal to their values than to a particular company or organization,” Barone said. “They would be loyal to a place that enabled them to make the kind of impact they would like to make. I did not sense that they would be likely to identify with their organizations as if it were a sort of home or family. And reciprocally, they do not expect that kind of loyalty from their employer.” He goes on to say that employers who allow them to be these types of managers and leaders can earn a great deal of loyalty from them.

The labor laws of today encourage freedom. Freedoms of an employee to work where they want to as well as the freedom of employers to hire whom they want and to let them go when they’re ready to. Gone are the days of commitments that must be upheld by either an employee or an employer. Every day we see major players in key industries either leaving large, respected companies to start their own businesses or join competitors. 

Working in the car business is a very taxing career. There are many late hours and not as many days off, especially in sales. Several positions are commission-based, which introduces stress into the equation as well. Combine these factors with a general lack of loyalty and you get a recipe for high turnover.

So how is a dealership supposed to combat this shift in attitude and increase employee loyalty?

The first thing that could be done is to create an environment that is conducive to family-life. Recognizing that for most of your employees, family comes first and respecting and encouraging that puts your dealership in line with their values. Creating an environment in which someone would want to work is also important. Employees want to not only feel appreciated, but also want to feel as if they’re making a difference. Empowering your employees to make decisions when it comes to customer experiences and fixing problems helps them feel as if they play an important role in your dealership. It can actually make a difference and help transform your dealership into one in which they are proud to be a part of.

All of this is easier said than done. People are resistant to change and putting your trust into your employees may be scary as a manager but it shows them that you believe in them and their judgment.

If you want your employees to be loyal to you, you have to be loyal to them.

How do you keep employees loyal at your business?

How can you show employees your loyalty as a manager/owner?

Why do you think that businesses are experiencing less employee loyalty than ever before?


Changing Your Image Is Hard but Possible

By Mike Gorun at Performance Loyalty Group  //  2013, July  //  No Comments

Changing Your Image Is Hard but PossibleFrequent travelers have many choices when choosing airlines. Some choose an airline for their frequent flier benefits, some for their convenient routes or frequent itineraries and some have airlines chosen for them by their companies. For many years, Delta Airlines has been at or near the bottom of almost every survey conducted regarding airline customer service. In fact, they were named one of the worst 15 companies (out of all companies) for customer service by the American Consumer Satisfaction Index. Delta finally decided it wanted to change. How could they transform their reputation from that of an airline with horrible customer service to the opposite, however? They spent a long time living up to their bad reputation. How could they possibly change that image and regain the trust of travelers?

A recent article tells the story of a Delta employee going above and beyond for a traveler. A story so out of character from their reputation that you’re forced to consider the fact that maybe… just maybe… they’re sincere.

A traveler returning to the U.S. from Paris had accidentally dropped her passport into a mail bin. As she proceeded to freak out thinking she’d be stranded in Paris, while everyone explained that she’d have to wait for the postal officials to open the box, one person listened and assisted her in her time of need. That person just happened to be a Delta employee. The Delta employee personalized the problem and not only helped her get a boarding pass, then through security and safely onto the plane; he made sure that the next day her passport was retrieved and mailed back to her. This was done while also keeping her up to date numerous times throughout the day.

We don’t know whether this is a new strategy that Delta adopted which empowers employees to go above and beyond or not. However, if it’s not, the positive attention it got them should make them take notice.

Car dealerships typically start with a bad reputation in a shopper’s mind. If the customer is unfamiliar with your dealership, statistically they just assume the dealership can’t be trusted. In fact, a Gallup survey done at the end of 2012 placed consumer trust in car salespeople right below that of Congress. In fact, car salespeople have been at the bottom of the list every year except 2011, when they tied members of Congress with a 7% honesty rating. Car salespeople’s perceived honesty has never climbed out of the single-digit range in the history of the list.

Reputation management is certainly something that’s top-of-mind for most dealerships today. Cultivating and nurturing existing relationships towards a public display of affection (positive review) is still challenging to manage but with consumers being more tech savvy all the time, it’s getting easier. Of course, the opposite is also true. Consumers will much more quickly take out their frustration online concerning a poor experience at a dealership than they used to.

So how can a business maintain customer satisfaction (if they have earned it already) or rebuild the customer’s trust (if they haven’t)?

It’s important to teach your employees that every action they take is one that is a reflection of your business and set forth expectations that you have for them as brand ambassadors. Empower your employees to make judgment calls and take action to avoid a negative customer experience and reward them when appropriate.

Car dealerships start at the bottom of the hill and must make huge efforts on a daily basis to climb towards a solid reputation. Every misstep is magnified tenfold as a customer is more inclined to believe something that reinforces the stereotype. So it’s even more important for car dealerships to go above and beyond for their customers and make every possible effort to insure a positive customer experience for every customer, every time.

Delta still has a long road ahead to transform from an airline that lives at the bottom of the customer satisfaction chart to the top. But by encouraging and allowing its employees to make decisions like this, they’re taking a step in the right direction.

What is your business doing to improve customer satisfaction and to gain trust with your customers?

How do you empower your employees? What incentives/rewards do you offer?


How OEMs are Giving Dealers a Jumpstart in Retention

By Mike Gorun at Performance Loyalty Group  //  2013, July  //  No Comments

How OEMs are Giving Dealers a Jumpstart in RetentionManufacturers are increasingly introducing programs designed to increase brand loyalty, and car buyers are staying more loyal than ever before. One of the most recent examples is GM’s decision to expand its free scheduled maintenance programs to more of its vehicles including most 2014 Chevrolet, Buick and GMC vehicles.

Many dealers have offered a few free scheduled services to their sales customers in an effort to not only introduce them to their service department, but to keep them coming back. With manufacturers focusing more on retention and shifting towards offering free scheduled maintenance for new car buyers, this offers dealerships greater opportunity than ever before to build a customer relationship with a car buyer (whether that car was bought from them or a competing dealer). This can not only increase up-sell opportunities, but also increase their chances at future vehicle sales.

Dealerships who have an OEM customer retention program need to recognize that this is a golden opportunity for them to really focus on “WOWing” the customer as, at this point, a customer has no concerns about price (the service is free to them). It’s all about the customer experience. Provide a great customer experience and they will continue to come back after their free maintenance benefit expires. Treat them poorly and they will take their vehicle to your competitor.

Cadillac has offered a 4-year, 50,000 mile free scheduled maintenance program for a while. Even with car buyers keeping their cars longer (58 month average in 2012), dealerships will still have the opportunity to impress and win the loyalty of the consumer for most of their time of ownership. If done properly in combination with the OEM’s brand retention strategies, a dealership can greatly increase their chances of converting that long-time service customer into a new car sale that then converts back into a service customer.

This “circle of life” could continue indefinitely as long as both the brand and your dealership focus on providing customers with programs that are designed to maintain the customer’s brand and dealership loyalty. As length of ownership continues to increase, fixed operations revenue becomes more important than it ever has been in the past. Leverage your OEMs brand initiatives to support your own dealership retention strategies and you can set yourself up to earn more lifetime customers.

The reason OEMs see the wisdom in using such maintenance programs is to sell more vehicles and importantly keep those buyers loyal to their GM dealer.  One might conclude then that this trend erases any market need for third-party prepaid maintenance (PPM) programs. After all, PPMs are substantially the same as those OEMs offer.

Given this, are factories’ free maintenance programs making third-party PPMs unnecessary?

On the contrary, they are now more vital than ever. The first automotive loyalty programs were utilized by dealers in 2002. Now, more than half of all the US dealerships employ some type of loyalty initiative (many through OEM sponsored programs).  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 plan redemption between all of their brands. OEMs simply can’t provide this 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 can benefit from this practice, and they will 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).

With a third-party PPM program, a dealer extends maintenance services at a discount price (some dealers choose to give them complimentary to purchasers). Consider that for GM, late-year buyers of its 2013 models won’t receive free factory maintenance. A dealer offering a PPM program can bridge that gap.

Furthermore, only PPM programs enable dealers to:

  • Offer similar maintenance incentives to customers who purchase or lease a model year not covered by the factory program.
  • Offer these conveniences – and gain their retention value – to purchasers of other makes it sells from its used vehicle inventory.
  • Capture bought-elsewhere and other-make customers who visit the dealership service department.
  • Offer these advantages to customers of other franchises in its group whose OEMs do not offer free maintenance.
  • Offer customers prepaid maintenance after the duration of the OEM program to further retain them.

What new programs are you introducing at your dealership?

Have you thought about extending your maintenance services with a PPM program? Why or why not?


What History Can Tell Us about Loyalty

By Mike Gorun at Performance Loyalty Group  //  2013, July  //  No Comments

The British are coming” shouted Paul Revere in his famous midnight ride frantically trying to warn colonists of the impending attacks by England.

Did you know that statistically only 4 in 10 people cared about this news? Only 40% of colonists supported the revolution, with some historians even estimating support in the 20-30% range. The other 60% were either loyal to the Crown or wanted nothing to do with picking sides. Winston Churchill once said, “History is written by the victors.” If you were to take a history class in England, you would be taught a whole new perspective on the outcome of the Revolutionary War. Their viewpoint is, at a very basic level, that they let us win.

What History Can Tell Us about LoyaltyWith the celebration of our Independence only a couple of days away, we celebrate everything that the United States embodies: freedom, choice and opportunity. Even after the war was “won” in 1783, many didn’t know what to think. People weren’t sure if they were just trading one government for an equally bad one. Not until 1787, four years later, was the Constitution signed, and it didn’t go into effect until 1789 when it was ratified by eleven states.

Today, of course, the United States enjoys patriotism and loyalty from many and was found to be the most desired place in the world to live when Gallup polled foreigners who desired to relocate.

So how did this country, which began with a rebellion that had the support of less than half its residents transform itself into the country that today enjoys some of the most loyal people in the world?

It all began with a promise. The basic principle of that promise was the freedom of choice. Think about it. In the Bill of Rights, all 10 amendments have to do with personal freedom and restriction of government to impose on that. For over 200 years, America has kept that promise and become a place that people want to live.

Businesses themselves may or may not exist if it weren’t for the promises that were made and kept in the centuries that have passed.

Just like the loyalty our country has earned from us, customer loyalty begins with a promise.  As a business, your dealership needs to define that promise and then keep it… no matter what. You must make that promise as unbreakable as the Constitution and show your customers through your actions that there are no exceptions.

Do this and you will not only earn their loyalty, you will become a place others want to do business with as well.

How does your business create customer loyalty?

Have you implemented a loyalty program into your store? If so, what do you offer customers so they keep coming back?

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