The title of this blog post originated from a thought-provoking interview with Chad Mitchell, senior director of digital communications at Walmart. In the interview he lays out a philosophy that every industry – especially automotive – should embrace. The main point he makes is that our digital and physical world is evolving at light speed and, the car business especially, tends to find itself far behind leading brands when it comes to customer experience, communications and… well, adopting new things.
As an industry we tend to sit back and wait for “new” things to be proven before we even try them. That “sit back and watch” strategy typically finds us scrambling to catch up when that new thing punches us between the eyes and we realize that we need to be doing (or adopting) this “thing.”
Think about it — there was a time dealerships didn’t believe they needed a website. Now we’re arguing the effectiveness or necessity of social media platforms, advertising, online sales and F&I transactions — along with in-store technology designed to expedite transaction times. And while we do that, the competition is embracing these new tools and attracting consumers.
Mr. Mitchell isn’t suggesting that businesses drop their tried and true core processes, but states that they should, “try things quickly and be willing to shift and go in a different direction. Don’t be afraid to take chances and learn.” For a leader in an organization as big as Walmart, one would think that perhaps caution would be the better part of valor and, the most prudent business decision. One can only imagine the challenges an organization as large as Walmart experiences when it comes to customer experience, loyalty and reputation. With so many locations, customer touchpoints and the sheer volume of customers, Walmart has challenges on a store-by-store level and overall as an organization. It’s certainly possible that employee interaction and the customer experience at one location can differ from another, simply due to management, staff, location and resources. Well, the key to success, according to Mitchell, is to determine what new endeavors require more care. And, in the retail business, he states that the one thing which should be at the top of the list is customer experience and loyalty.
As consumers get groomed by major brands to expect certain types of transactional experiences, they naturally expect those same frictionless experiences from other retailers they do business with, including auto dealers. Conquesting the competition is sure to become more prevalent for forward-thinking organizations that adopt new technology and offer an easier customer experience and transaction. That’s why most major automotive groups produce and roll out technology, products and services designed specifically to nurture customer loyalty.
It would be a wise decision for us all to pay attention to what’s going on in the world and not drag our feet when it comes to trying new things. While change can be scary, it’s also inevitable. It’s much better to be leading the pack than trying to catch up with it. This doesn’t mean that you should abandon the things that have earned customer loyalty. Core values and tried-and-true processes that your customers love should always be handled – and changed – with care.
Mitchell makes a great final point in the article where he states, “We don’t want to break the heirloom china; we want to break the paper plates.”
Don’t be afraid to try new things, adopt new technology or change processes. Just be prepared to react and alter paths should you find something either failing or succeeding. By doing this, your business should be more future-proof and in-line with customer expectations and, in turn, enjoy greater customer retention, loyalty and acquisition.
Can efforts to capture customer loyalty be thwarted by employee loyalty?
Evidence gathered from top retail groups, including auto dealerships, indicates that employee loyalty directly affects customer loyalty and thus business results.
Dealer operators and their managers do their business, their stakeholders and their shareholders disservice when they fail to foster, develop and reward employee engagement. Get this loyalty driver fixed first. Then watch the ROI on customer loyalty improve.
According to customer experience researchers Temkin Group, engaged employees are key to engaged and loyal customers.
“Engaged employees deliver a better customer experience; a better customer experience creates customer loyalty; puts employee engagement; and, customer loyalty leads to more profitable business results,” Bruce Temkin, managing partner, told Direct Marketing News.
Among auto dealership franchises, Toyota does the best job at this, according to Temkin’s Experience Ratings report, just released.
Is employee loyalty killing your dealership?
When employees are taken for granted, not given clear direction, rarely cheered on and viewed as utilities, don’t expect them to engage customers in positive ways.
Absenteeism, water cooler huddles and high turnover are signs employee loyalty is in bad shape.
The good news is that developing employee loyalty is not rocket science, but a good dose of the Golden Rule, treating others as one would like to be treated.
Here are some ideas for engaging employees so they can deliver better customer experience:
- Hire the right people. Look for those possessing the required job skills – as well as having the heart and desire to serve others.
- Lead with vision. Employees who can articulate the dealership’s guiding principles and reflect them in their engagement with others have bought into leadership’s vision. Wall plaques cannot adequately convey this vision. Ongoing cheerleading sessions and desk side chats will.
- Equip staff to master and own their jobs. Only when employees know their jobs and are comfortable performing them will their attitude and actions allow them to focus more on others and their needs than their own. Provide training on both hard job skills and soft attitude skills.
- Care for their families. This is a tough business, given the hours, competitiveness and personality types it attracts. Nothing tells employees you care about them like paying attention to their personal life and family. Include families in company events. Send flowers or other forms of condolence when an employee’s family member is ill or otherwise struggling. Can the dealership fund a scholarship program for employees’ children or sponsor a kids’ day program during summer months? Might a letter to a spouse of a hard-working member of the team encourage both employee and spouse?
- Link their loyalty to customer loyalty: Some people get it naturally, that warmth, helpfulness and personal interest in others, that sparks social interaction. Most of us need a few clues. Consider an all-staff event to talk about the link between customer loyalty and employee loyalty. Help them see clearly that their behavior and attitude on the job (as well as off) either bolsters or undermines efforts to build customer loyalty long-term. If you need outside expert help, make the call and the investment.
“Most industries earn their reputations,” Temkin told Direct Marketing News. “What happens is industries end up cultivating their mediocrity.”
What reputation is employee loyalty cultivating for your dealership and your customers?
How do you “lead with vision” at your dealership?
When did you last share with someone important why you enjoy him or her? We’re fast to convey disappointment or dissatisfaction with others, but uplifting the attributes in them we like feels rather strange.
Yet when it comes to building loyalty, whether in customers, coworkers or family members, nothing will engage their attention – and draw them to us in response – like taking the time to consider and then share positive observations about them.
You may be thinking that an idea like this has no place in the rough and tumble world of auto sales, when in fact, you wouldn’t be further from the truth. Anytime that there is any interpersonal friction, misunderstanding or a feeling of ingratitude, an uplifting and edifying discussion about the values you perceive in someone else will carry the day for a long time to come.
The hardest challenge for most of us is identifying specifically what it is we like about someone else – and then being courageous enough to share these observations with them. You don’t want to spin an attribute that’s not exhibited in someone, but you can identify qualities in him or her worth mentioning. This means though taking time to observe your employees/coworkers and learn their interests.
When you build up others, both you and the recipient should experience a lift while building the working relationship.
If your goal is to build a loyal customer base, there’s no better place to start than by building up your employees’ loyalty and engagement by making sure they know how they are valued. Properly timed sharing of encouraging remarks like “things I like about you” is the most cost-effective means for improving employee morale and loyalty.
Here’s how this might work in the dealership. Chatting with a service advisor in the break room, the service manager says, “You know, Larry, I’ve known you now for what, three years? You know what I like about you? I like that you’re always punctual. I like the way you greet our customers and always have something to say to them that makes them smile. I like it that when you talk about your kids your stories are always upbeat; it’s obvious you love them very much. I’m glad you’re on our team, Larry. Thanks for your commitment and loyalty. It means a lot to me.”
How would such words shared sincerely with you make you feel about your employer, your job and yourself? The fact that someone else took the time to recognize these qualities in another speaks volumes.
Life can beat us down, and no one is immune from life’s trials. We can’t do much about those matters, but we can learn to speak grace into others’ lives. Why not choose today to be a deliverer of grace to those who labor with you.
Share an example where you have improved employee morale and loyalty at your business.
How does your business build a loyal customer base?
- 98% of Customers Who Join a Rewards Program Provide an Email Address
- Email Open Rates for Reward Members are 300% Higher Than Non-Members
- Dealerships That Provide an Incentive for Customers to Return After a Visit Have a 20% Increase In Sales
- Statistics Show a 35% Service Visit Increase with Rewards Members
- Members Spend 11% More Annually on Service When Participating in a Rewards Program
I think it’s pretty obvious after seeing those numbers that having a rewards program in place can more than triple the overall profit for your dealership.
Customers are always looking for the best deal and the best ways to save money. When you offer a rewards program, you are giving your customers what they want. The upside for you? You create loyal, repeat customers that will return to your dealership time and time again and spend more money while doing it. What’s not to love? By contacting a third-party provider, like LoyaltyTrac to help you setup a successful rewards program, you can increase your customer base and profit.
Also, there is a huge marketing potential for your rewards members. With statistics showing a 300% increase in email open rates, you better have a marketing strategy in place to reach your rewards customers.
Offer special incentives to only your rewards members – like an extra 15% off their next service visit or double their reward points for that entire month.
It is important not to SPAM your reward members. Each customer’s email address is like gold, so don’t blow it by dumping ten or more emails a month into their mailbox. They won’t appreciate it and neither will your bank account. Instead, offer thought-out marketing campaigns each month that have a specific focus and offer real value to your rewards members. Take time to sit down and plan out your marketing strategy for the next two months, or even the whole year and craft engaging content.
By utilizing your rewards members through your email marketing, you will more than triple the ROI for your efforts.
What are some of the successes you have had with your rewards program?
How are you utilizing your rewards program to grow your dealership?
With service departments finally getting the credit due to them for contributing to the growth and profit of dealerships, pre-paid maintenance programs (PMP) are starting to make a huge impact on the overall profit of dealerships as well.
I think it is well established that most PMPs are being sold in the F & I department. But is that the only place that they can make the dealership money? Pricing your pre-paid maintenance program is a big part in whether a customer will even consider purchasing a plan. Recently we noticed that dealerships were overcharging their maintenance plans, arguing “what’s the point if we can’t make profit on the program?”, which made us realize that some dealerships are taking the wrong approach to their PMP.
When selling a maintenance plan to a customer, you tell them that they are saving money in the long-run and that they will not have to worry about the maintenance on their vehicle for 2 -5 years, depending on the length of the plan they choose. But when looking at the benefits from a dealership standpoint, there are several things to look at, and not just the profit. If you are concerned about losing your shirt when selling PMPs, then consider building your own PMP through a third-party provider like UltraCare and keep more profit for yourself. By cutting out some of the costs associated with most PMPs, you can lower your prices and still come out ahead.
What should you consider when looking for a pre-paid maintenance program?
Pre-Paid Maintenance programs, when delivered effectively, increase customer loyalty and create repeat business for your service department AND sales department. A customer is seven times more likely to return to your dealership if they have purchased a maintenance program from you. In addition, customers are 83% more likely to purchase their next vehicle from you if they visit your service department regularly.
Try to keep the bigger picture in mind. By stepping out of the box of profit and stepping into the one of loyalty, you can start to see the forest and not just the trees right in front of you. PMP are a great tool for dealerships, but if not used correctly, they will be unsuccessful and can actually hurt your reputation with your customers.
So, it is not just about adding to the profit of the sell. It is about adding a loyal customer that will return multiple times and more than triple that number. Price your programs competitively and to the advantage of the customer. In the long-run you will make much more profit. Not to mention you will have a happy customer who will bring more customers to your business through word of mouth.
What successes have you had with your PMP?
What are some of the frustrations you have with the PMP that you offer?