Browsing articles from "October, 2016"

The Rush to Automation Could Be Detrimental to Loyalty

By Mike Gorun  //  Uncategorized  //  Comments Off on The Rush to Automation Could Be Detrimental to Loyalty

Humans naturally crave interaction with other humans. However, as technology advances, there is an increasing push by companies to automate as much of their processes as possible. While this is understandable, as it saves on costs, the path technology is taking us down could prove to be a double-edged sword.

Think about all the automated technology that you DO like – for example people love Siri and Amazon Echo is a big hit. The technology that people like the most tends to be more personal in nature – such as speedy access to information, organizational utility and home automation — to name a few. I don’t know many people who like wading through automated phone trees when calling a customer service line, do you? Have you received any phone calls from robots that sound really human? I bet it doesn’t take long for you to tell that it’s not a real human.

My point is that if human interaction is desired, there’s a real difference between do-it-yourself customer service-type tools and forced automation.

The big trend right now is towards chat bots. If you don’t know what a chat bot is it’s essentially customer service software driven by artificial intelligence. It’s designed to interact with customers using chat via the company’s website, via social media, or over the phone. The problem is that humans communicate in ways which a computer program can’t fully duplicate. And, sometimes, that software fails to answer a customer appropriately and cannot assist them with their need.

According to an article on Knowledge@Wharton, it is also difficult for artificial intelligence to correctly interpret what the customer means when they get frustrated if automation is unhelpful and does not offer them the correct options for their situation — the computer simply doesn’t know what to do.

How does this affect customer loyalty? Companies that automate too much risk a break down in the customer bond which, in turn, decreases the emotional connection that customer may have with a company. Inappropriate or unhelpful automation, while it may seem cost-saving on the surface, could end up being more expensive as customers defect to competitors or stop caring who they deal with. The article gave a great example of how a company went from a customer engagement win without automation to a customer engagement fail due to adopting it.

When a political consultant got stuck in an Amtrak elevator at BWI Airport last February, she used the Amtrak Twitter account to get help, and help soon arrived. Seven months later, she received this Tweet from Amtrak: “We are sorry to hear that. Are you still in the elevator?”

 Imagine how silly that made Amtrak look. It’s sad that this automated Tweet happened as in fact Amtrak quickly responded and helped the customer. How do you think the customer responded when she received that tweet seven months later? She had a field day with it on social media. According to Wharton marketing professor Americus Reed, “when non-human customer service works, it works extremely well; but when it works poorly, it works extremely poorly.”

Nobody is saying that automation can’t be useful to companies by enabling them to assist customers at all hours, or provide do-it-yourself type tools for them. However, businesses should analyze exactly what type of automation can help their company as well as how it will affect any connection to and engagement with their customers. In some cases, they may find that the negative effect in customer engagement outweighs the savings that the automation offers.

According to Wharton marketing professor Americus Reed, “We have a human side, and there is going to be a counter-punch by companies who choose to focus on connecting with customers in a more human way.”

So, while many may choose to save money and adopt technology that replaces humans, offering 24/7 customer service through automation, these companies may find their customers drifting away — gravitating towards those companies that choose to make their unique value proposition the more personal, human touch.


Digital Car Buyers Mean More Showroom Traffic, Not Less

By Mike Gorun  //  Uncategorized  //  Comments Off on Digital Car Buyers Mean More Showroom Traffic, Not Less

There’s a big push in our industry right now to bring as much of the car buying process online as possible. Startups are entering the space believing that consumers want this ability and automotive vendors of all sizes are creating products to facilitate that.

However, some dealers are afraid to adopt these solutions for fear of loss of control and decreased profits. It’s certainly much easier to sell product – especially the increasingly important products in F&I – if the customer is sitting in front of you, rather than through some website widget.

Today’s car buyers visit numerous websites to gather information about vehicles and many arrive at the dealership knowing which vehicle they want and exactly what they want to pay for it. That’s not going to change. But what if I told you that the more “digital” car buyers get, the more they actually want to visit your showroom? Well, according to a recent study by Accenture, that’s exactly what’s happening.

According to the study, 60 percent of digital car buyers stop at the dealership more than twice before buying a vehicle, compared to 47 percent of those consumers less active online in the car buying process.

The ability to complete some of the car buying process online is simply a way for the digital customer to reduce the amount of time spent physically at the dealership completing the transaction. The report suggests that the reason the digital customer needs less time at the dealership is that they’ve already made their purchase decision online. But there seems to be a contradiction here – how can a digital customer visit the dealership more, yet need less time at the dealership? The reason is that by the point that they’re ready to buy they have already gathered the information they needed through digital sources AND have visited the dealership multiple times in order to collect physical information (view colors in person, ask questions, compare trim levels in person, test drive vehicles, have their trade-in appraised etc.). So, at the point they’re ready to buy, those widgets and online car buying facilitation tools simply help them get ahead in the process.

However, decreased time at your dealership means you have less time to create a relationship with the customer. If the industry transforms into a straight transaction-based business, then the customer could potentially have no more loyalty to your dealership than your competition.

How do you build a relationship with a customer who wants to spend less time buying a car? You begin to build that relationship from the moment the customer walks in the door. According to the study, it’s much more likely that the customer you just greeted is a digital car buyer than a conventional one. Yet, in many cases, our current road to the sale focuses on exactly that… the sale. Most manager introductions, service drive walks and other relationship-building opportunities for dealerships happen AFTER the sale. If you have a digital car buyer, you may not have as much of an opportunity to do these things.

Start building value in your dealership from the moment the customer walks in the door. Consider integrating service walks and manager introductions into the beginning of the sales process, not after the customer buys a vehicle.

Perhaps then you have a better chance of convincing the customer that they should buy from you and should also bring their vehicle back for service.

If they already know what they want, how much they want to pay for it; what their trade-in is worth; and every other piece of information; then why start the whole process trying to give them something they already have? How about selling the dealership first?

As online vehicle buying tools become more utilized, this simple tweak in the initial contact with a customer could mean the difference between seeing them again…

…or having them visit the most convenient competitor.


Lack of Time Can Be Costlier Than You Think

By Mike Gorun  //  Uncategorized  //  Comments Off on Lack of Time Can Be Costlier Than You Think

Working retail in the auto industry can certainly be taxing. Salespeople work 60-70 hour weeks to make a paycheck. Sales managers do so while also having to manage the sales team, create multiple reports and handle a multitude of tasks — and the service department is just as overloaded.

Not surprisingly, frequently the excuse, “there’s not enough time,” comes into play. However, it is important to remember that the entire existence of a car dealership – as a business – is to sell and service cars. Growth and profitability is dependent upon satisfying the needs of many customers which, at times, can be overwhelming. When the GM is breathing down a sales manager’s neck to have a report done by a specific time, all while trying to desk a deal and handle heat, it’s easy to lose track, or miscalculate priority. It’s almost like the chicken before the egg argument.

So what IS most important?

The most important thing is to make the customer first. There’s a great old saying by Henry Ford: “It is not the employer that pays the wages. Employers only handle the money. It is the customer that pays the wages.” This is absolute truth. Without customers, no business can last. It will fail and there won’t be any managers or salespeople any longer.

The existence of a car dealership is entirely dependent on ensuring that people buy and service their vehicles with them. If those things don’t happen because managers are overwhelmed or have higher priorities, business will drop. On the contrary, however, by putting the customer first, the customer feels appreciated, valued and is taken care of. This fosters loyalty, referrals and repeat business which, in turn, grows the business rather than seeing it falter.

Customer loyalty and advocacy will only be encouraged and developed by making the customer the priority. And I’m not just talking about handling heat, ensuring that there’s enough floor coverage or available service bays. Customers and their questions, care and problems, should be a priority.

If the customer doesn’t feel that spending $30,000+ on a vehicle is appreciated, they’ll go someplace where they feel appreciated. Treat the service customer like they’re a nuisance and schedule them 4 weeks out for an appointment and they will find someone who is willing to help them when it’s convenient for them, not for the business. Imagine going to McDonald’s and having them tell you that all of the employees are taking a break so you’ll just have to wait. Or that they’re simply too busy to assist you at the moment so come back later. Would YOU come back? Probably not. And neither will your customers.

I guarantee that if you take care of your customers first, those reports will look better each and every time you send them to the GM or dealer, and they’ll forgive the fact that you were tardy. Bottom line is that a report isn’t going to bring in revenue, leave reviews or service its car with you… but a customer will.


Employee Retention: Why Are We Going Backwards?

By Mike Gorun  //  Uncategorized  //  Comments Off on Employee Retention: Why Are We Going Backwards?

A recent article in Automotive News reports that the three-year employee retention rate at dealerships reached a new low, dropping by 2%. In fact, the study showed that only 1/3 of sales consultants stay at a dealership for 3 years or longer. The article went on to share that the average tenure for sales consultants has steadily dropped since 2011, when it was about 3.8 years. Last year? 2.4 years. According to the article the result is: “…reduced productivity, reduced median and average earnings, and reduced dealership profitability.”

What’s the answer to retaining employees? Perhaps we should start looking outside of our industry, analyzing companies that people love to work for and figuring out which of those attributes we can adopt in dealerships.

Consider starting by simply asking employees if they’re happy or not, what could be changed that would make the dealership a better place to work, etc. However, be sure to do this anonymously, or you probably won’t get honest answers. Then sit back and be prepared because some of the answers you get may sting. You can’t, however, make changes without knowing what’s wrong and unhappy employees generally aren’t going to tell you to your face.

Our workforce is getting younger. These days, many aren’t willing to work under the taxing conditions that we experienced. And it’s usually not because they’re lazy, or have a poor work ethic. It’s because our society and culture has changed. People prioritize things differently. And this trend isn’t going away. It’s only going to keep shifting

If we continue to try and operate dealerships the same way as 10 years ago – mandating “bells” and 70+ hour work weeks – we’re going to keep watching the front door revolving – existing employees leaving and new faces coming in. And if you don’t think your customers notice, you’d be sadly mistaken.

Making employee retention a priority can, by itself, improve customer experience and loyalty. In addition, you will save money that would otherwise have been spent hiring and training new staff. Isn’t the whole point of retention and loyalty to increase revenue? Well those two words apply just as much to your employees as they do to your customers. Never forget that.

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