Dealerships are well known for their involvement and participation with local communities and many different charities. From sponsoring little league teams, to larger charity initiatives, dealerships have supported and given back to the communities they serve for a very long time.
Cause-based efforts have become increasingly important to consumers, especially to the younger consumers now joining the spending force. For example, General Mills’ “Box Tops for Education” initiative. Founded in 1996, the brand has raised over $719 million nationwide. Of course, the schools themselves aren’t out buying all of these products, the consumers are.
While it is certainly distasteful to always “toot your horn” about how great and charitable your dealership is, there is a right way to do it. Consumers DO want to know what you are doing to give back, it is important to them. Just how important is cause-based marketing to consumers? Let’s look at some statistics from CauseGood,
- When choosing between two brands of equal quality and price, 90 percent of U.S. shoppers are likely to switch to a cause branded product.
- 97 percent of marketing executives believe cause-based marketing is a valid business strategy.
- When quality and price is equivalent, social purpose is the number one deciding factor for shoppers globally.
- 42 percent of North American shoppers would pay extra for products and services from companies committed to positive social and environmental impact.
- 64 percent of shoppers say simply giving money away isn’t enough; they want businesses to integrate social impact into their business models.
- 88 percent of Americans want to hear about businesses’ social responsibility and the most preferred place to hear about these efforts is on the product’s packaging or label.
Feel free to browse all of the statistics. The fact is that our younger generations increasingly seek to do business with companies that support causes. Of course, it’s difficult for companies to market those efforts. In fact, 70 percent of Americans find companies’ communications about their social responsibility efforts confusing.
So how are you supposed to communicate your charitable and community support efforts to your customers?
Whatever cause your choose, be it perhaps supporting and pledging to donate a percentage of sales and/or service revenue to a valued cause, it is not enough to just simply do it. As stated on the statistics from CauseGood, 88 percent of consumers want to hear about these efforts.
Integrate your charitable cause message into all your marketing efforts including in-store signage and in the service drive. It should be tastefully done and the point is to make it widely known that your dealership supports the cause.
In the end, once it becomes common knowledge within your community, and consumers learn about it through all of your marketing channels, they may well start choosing you over your competition. All while you are make a difference in your community. And that’s a great way to differentiate your dealership from the competition and earn customer loyalty.
The customer experience at your dealership is more important than ever before. With start-ups aiming to take away sales by luring customers with promises of a hassle-free buying experience, customers are starting to realize that they no longer have to sit at a dealership for hours. In fact Amazon France just sold a car completely online and delivered it directly to the consumer via truck and helicopter. If you don’t think that Amazon has larger ambitions – well – you might want to reconsider.
With the many start-ups in the market aiming to sell cars, should dealers be worried?
Well, consider these facts:
- Technology – For every start-up that comes along and creates technology that makes the car buying process more convenient, an automotive technology company creates a product that replicates that experience. Any dealer who chooses to utilize that technology can effectively squash that start-up in their market. Customers simply don’t have time to sit at a dealerships all day in order to purchase a vehicle. Increasingly most, or all of the car buying process is now done online. New technologies make the process more convenient (and faster) for the consumer and makes the dealership’s sales department more efficient, allowing them to sell more vehicles with less salespeople in the same amount of time.
- Human Emotions, Senses and Perceptions – Buying a vehicle is an expensive and personal experience. Despite the perception of poor experience, consumers still want to touch, feel, smell and drive a vehicle before purchasing it. And that’s where a dealership has a huge advantage. It is important to get that customer emotionally connected and excited about a vehicle and that connection has a tremendous impact in closing the deal. No online start-up can duplicate that. It’s simply not possible.
- State Associations – Franchise agreements prevent most manufacturers – with the questionable exception of Tesla – from selling new cars direct to consumers. This will undoubtedly be controversial for years to come. However, for now, dealers can rest assured that their associations have their best interests in mind. Franchise agreements afford certain protections and consumers currently have to come to a dealer to buy a new car (at least in the United States.)
Let’s say that in some miraculous way, dealers can’t replicate the online experience and technology evolves to the point that consumers can use all of their senses (via virtual reality, augmented reality or whatever comes next), should dealers then worry?
Perhaps not. Here’s why:
People want to deal with people. That interpersonal experience while buying a large ticket item is still necessary. The key to winning business and retaining the customer lies not with novelties such as vending machines, but rather in the experience the dealership provides in sales and service and in its efforts to improve and show the customer appreciation for their business.
Going into 2017, make a commitment to analyze and improve your dealership’s customer experience through gaining feedback from both your employees and your customers. If consumers in your market demand a more digital experience (whether in full or in part), consider adopting technology that allows them to interact with you on their terms. When they do arrive, ensure that they are treated well and that the process is efficient. In this way you can increase business and thwart the disrupters.
What would you do if a customer was injured at your dealership and you were at fault? I don’t mean serious injury or anything like that. Perhaps just a bump or scrape? Most businesses would apologize or, at the very least acknowledge the mishap to the customer. Perhaps send some flowers or a gift card. You certainly wouldn’t want to ignore it, right?
Well, that’s what happened to an American Airlines customer who was injured when an unsecured drink cart barreled down the aisle and crashed into the passenger. No apology from the airlines was ever received (although it is a tad hard to believe that the stewardesses didn’t at least apologize). The customer wasn’t trying to shake down the airlines at all. He just thought that an apology phone call or card would be an appropriate response for American Airlines to make to a customer injured on one of their flights. Even if only for the sake of customer retention.
The passenger did receive flowers and an apology… but not from American Airlines. The geniuses over at Virgin Atlantic heard of the incident and sent the passenger flowers along with a card that read:
“We might not be who you expected these to be from, but we heard what happened and everyone at Virgin Atlantic wishes you a speedy recovery. And in case you ever fly AA (American) again, we’ve got you covered. Get well soon.” The Virgin Atlantic Team
When he opened the box that came with the flowers and card, inside were a pair of kneepads, elbow pads and some other protective equipment. Of course, this passenger couldn’t refrain from sharing what was certainly a humorous outreach from a competing airline. Naturally, the story quickly spread around the Internet.
Being in the car business, chances are that you hear stories like this all the time. Not necessarily someone getting injured at a competitor’s dealership, but perhaps simply someone upset at how they were treated or some other such complaint. Whether you see these stories on the news, the Internet, or via social media, there is a good chance of one underlying fact: that customer will probably NOT be patronizing that dealership any longer. Which means they will need someplace else to do business.
Customer loyalty and retention are fickle things, especially in this world of high-maintenance customers who want everything on demand. Owning and acknowledging your mistakes and making appropriate apologies can rectify most accidents or poor experiences with your customers. Failing to do so can leave a wide-open opportunity for that customer to defect to a competitor.
So, whether it was your customer who had a mishap or your competitors, opportunity exists. If it’s your customer, you have an opportunity to make things right and keep them. If it’s your competition’s customer, this very well could lead to a low-cost customer acquisition and some word-of-mouth marketing – or both. Regardless of which end of the situation you find yourself on, reaching out to the customer when the opportunity arises could pay off exponentially.
Customer feedback is important to any business’ growth. That’s why many send out customer satisfaction surveys and managers pay attention to that feedback.
However, sometimes the feedback system is faulty or gets misinterpreted to the point of being useless. Take the feedback system Uber used to have. At the end of each trip riders were prompted to leave feedback in the form of a star rating from 1 to 5. As Uber drivers are contractors, the corporation wanted to ensure customers received good service and a great customer experience from any given Uber driver. Any driver that fell below a certain star rating was disciplined by the company with a suspension or, in some cases, contract cancellation.
An article in Wired magazine details how Uber came to realize that the star system was faulty. It failed to truly reflect a customer’s experience and was vague to the point of being meaningless. Some people gave 5-stars to a driver even though they didn’t have the best ride, simply because they felt bad doing otherwise. Other customers gave drivers low star ratings for reasons that were beyond a driver’s control, including traffic, or how long it took to get picked up.
Uber also realized that its star system didn’t provide the drivers themselves with any useful feedback on what their customers liked or didn’t like about a trip. Therefore, drivers had no opportunity to improve or correct something as they had no way to know what was bothering their passengers if it was not stated during the trip. Uber has now revamped its system so that it includes the star rating while also allowing customers to give feedback in the form of virtual stickers and, if the passenger desires, they can leave personalized feedback via a note. This provides Uber with a better assessment of the driver and can also instill a sense of pride or fulfillment in the driver for a job well done.
In the auto industry we face a similar dilemma. Manufacturers survey customers and assign CSI scores to each survey. These scores can mean the difference between a dealer making or losing a substantial amount of money. However the surveys are formatted similar to Uber’s old 5-star rating system. Each question is either scored on a 1-10 scale or a Yes/No answer. This provides little clarification to the manufacturer or the dealer as to how the customer experience actually went. In addition, manufacturers assign different weights to the questions so a dealer can receive a failing grade on a survey even if every question is answered perfectly except one. Many manufacturers even consider anything less than perfect (100%) as a failing grade. There is nothing wrong with demanding perfection, but it is tough when the grading system is not itself perfect.
Venture back to your school days. Imagine getting a 90% on a math test. In the real world, that would be an “A” and if you or your child brought home straight “A’s”, you would be proud. Yet a dealer who receives a 90% on a survey could be punished monetarily and, unless the customer actually bothers to write feedback, does not know or have any way to change a process or hold someone accountable. In addition, the manufacturer, just like in Uber’s case, has no true idea of just how the customer’s experience went at the franchisee’s dealership.
This isn’t anything new. Dealers have long complained about the unfairness of survey grading and losing money as a result of the weighted questions which don’t really reflect how their customers are treated.
Perhaps the industry can take a page out of Uber’s playbook. True feedback should be in-depth and judged on an individual experience basis. Only in this way can a dealership be judged accordingly, change any needed processes, truly improve and be fairly rewarded.
In their new book, The Intuitive Customer, authors Colin Shaw and Ryan Hamilton contend that companies that try to fight declining customer satisfaction by lowering prices are going about customer satisfaction the wrong way. Instead, they state that the magic to winning customer loyalty is based on understanding what the customer will do next.
An article in MediaPost, recently shared some of the basic precepts in the book, including the fact that roughly half of a customer’s buying decisions are based on how they FEEL about a company and that understanding the psychology behind why they choose a business is key to tweaking processes and services that cater to those feelings.
Sadly, many consumers don’t like going to car dealerships and if roughly half of customer choice is based on how the customer “feels” about a business, there is a long trail to get there. An interesting point shared in the book is that the most irrelevant aspects of customer experience are often the most important. Some dealers spend a lot of time, money and effort attempting to create an excellent customer experience through increased efficiency, improved technology and dealership premises. What they may not consider are the things that are seemingly irrelevant because… well… they’re seemingly irrelevant.
While a recent trend has dealers installing movie theaters, coffee bars and other amenities, perhaps what really influences the customer experience are the “seemingly irrelevant” actions. Those small actions that go towards improving the customer experience, such as cleaning and vacuuming the customer’s vehicle after it is serviced. Many dealerships wash vehicles but not as many vacuum them. If the vehicle looks great on the outside but not so much on the inside, that could perhaps leave the customer with a less than great customer experience. That’s just one small example to provide food for thought.
The last point the author’s make is how do customers REMEMBER their experience? Do they remember inconvenience, dirty bathrooms, inconsiderate or apathetic employees? What a customer remembers is a completely individual experience.
Everyone is different and there is no way to design an experience that is perfect for everyone. Just as in sales, we tailor how we sell and the tactics we use to each and every customer. Perhaps the customer experience should be viewed in the same way. How about making an effort to establish what provides your customers with the best possible customer experience so that they leave happy, with a memorable experience which they will share with their friends and which keeps them loyal to your dealership.
If you get to know your customers, listen to their needs and wants while paying attention to how they respond to you, the chances of identifying the seemingly irrelevant and making it relevant increases. Customers will then leave with positive feelings and memories. And that means increased customer retention and profitability. In fact, according to authors Shaw and Hamilton, this practice “has translated into a 10% year-over-year sales increase for the past 10 years, reduced customer churn and increased market share.” And that’s definitely something worth striving for.