Point in case: Doug Demiro, a former manager of Porsche Cars North America, and now author of a popular column on automotive website Jalopnik, answered a in his column that illustrates this point very clearly.
The question essentially boiled down to this: “Do those letters and e-mails from dealers saying they really want your trade-in actually mean anything? Do dealers really want your trade-in? Are they going to pay top dollar for your vehicle because they have some customer who desperately wants it?”
His answer: NO
Go ahead and read the article. It’s pretty much how consumers perceive these offers. The comments are also rather entertaining. It’s all consumers sharing experiences in which they received a similar offer and actually wanted to take the dealership up on it — until they found out the dealer couldn’t deliver, or that the offer was unobtainable. And now, in general, they assume ALL offers are simply ploys and conspiratorial plots to entice the customer into the dealership.
Are they right? Is that what we’re doing?
Well, that all depends on how responsible a dealership is in handling their marketing. Dealerships who turn over their entire DMS to outsourced BDCs, direct mail companies, extended warranty companies, or any other vendor without first segmenting out and vetting that database to ensure that it is correct for that targeted message; that the recipients of the message qualify for the offer; are in fact, for the most part, doing more harm than good.
All this type of poorly thought out, uncoordinated mass blanketing of promotion does is create an aura of mistrust with existing customers. By blasting them with irrelevant messages you make it more difficult for the customer to believe ANY message they receive – even if it does apply to them. This practice, which is still more widespread than many realize, in turn gets projected onto the retail auto industry as a whole.
That being said, smart dealers understand the importance of segmentation and relevant messaging. When a dealership realizes that “spray and pray” hurts more than it helps and takes the time to segment its database and send relevant messages to those customers most likely to be interested, the campaigns – no matter what form of marketing it is – will always perform better. Why? While you may be marketing to less people, those people are more likely to take you up on your offer. They’re more likely to convert when they come in, since they will actually qualify. And you’ll spend less money to achieve better results. The side effect of segmenting your marketing messages is that you will start to earn your customers’ trust. They still may not believe everything you send them (even if it’s true). But, when they come in and discover that you can actually fulfill the offer, not only will you win their business, but also their trust. And that’s something all dealerships and our industry certainly needs to do.
In the automotive industry, hundreds of customers pass through dealerships on a daily basis. Each of these customers will interact with dealership staff multiple times during their visit – whether they’re there to buy a car, or for a simple oil change. It’s very easy to function as an organization with a focus on efficiency – how quickly can you complete a repair, how quickly can you get someone in and out of the finance office, etc. We are, after all, in a society that’s always on the move. The trend is to speed things up for the customer. By doing so, however, we neglect the biggest part of customer’s experience and the most important piece of the big puzzle that is customer loyalty: personal interaction.
All too often we go through our days thinking that if we don’t get complaints, our customers are happy. But, that’s not usually the case. Running the dealership like an assembly line serves only to depersonalize the experience. While you may not hear a complaint, you shouldn’t assume that every one of your customers had a good experience. You’d think that if there was something substantially poor about their experience, the customer would inform you. And some customers would. But what about little things that affect the experience? In many cases the customer either doesn’t feel it’s worth mentioning, or doesn’t think anything will be done about it. Those customers complete the transaction with you and go on their way leaving dealership employees with the impression that their experience was satisfactory, assuming they will return. And, in many cases they do…
Until another company offers them a superior customer experience.
All of a sudden, this repeat customer simply stops coming in. Oftentimes, we’re left clueless as to why. Did we do something wrong? Was there a bad experience that we didn’t know about? Is it a price thing? Did they move? We mine the DMS and email coupons and offers to dormant service customers that used to come regularly, to invite them back. Sometimes they respond or take advantage of our offers, and sometimes we’re left wondering.
So how then are we supposed to know whether a customer really had a good experience during their visit? It’s very simple. We ask.
Human interaction is the single most effective way of gauging the thoughts of another. Just as you can tell when someone isn’t telling you the truth, or is unhappy despite what they may say, the same occurs when your sales manager or service advisor makes sure they speak to the customer before they leave. Take the time to thank the customer for their visit and ask them how their experience went after each and every transaction. This can help to identify problems. Perhaps it was something as small as the fact that the restrooms were dirty, or there were no paper towels. Perhaps the car wasn’t washed to their satisfaction or there are greasy fingerprints in their car. The customer may just leave feeling irritated. Having knowledge of that fact right then would allow you to fix that issue so that another customer does not have the same problem.
Make it a point to train your employees in the importance of conducting exit interviews with every customer. If they’re in sales, a manager TO is the perfect opportunity to thank the customer and ask how their experience was. You’d be surprised how that previously quiet customer all of a sudden opens up when a new face with authority asks them. In service, have your service advisors or, if possible, your service manager do the same thing prior to a customer leaving. Identifying customer complaints or service hiccups can go a long way towards ensuring that the experience for every customer is as optimal (and consistent) as possible. It doesn’t take much to lose a customer nowadays. Taking a few extra minutes with each customer will show them that you care and that will go a long ways towards earning and keeping their business.
There is a group of people that seems to sit in limbo when it comes to dealership marketing messages, especially when it comes to service. This group of people tend to have cars in the 2-year old range. Yes, they’re probably getting the dealer’s random e-mail messages with service coupons. But, this is also the time when these vehicle owners may have to start shelling out more significant money for repair or maintenance work.
Many consumers don’t realize that they can still purchase extended warranties and/or prepaid maintenance plans once they have left the finance office. How often do your service advisors inform customers that they are still eligible? Are you sending relevant messages to this group of people? The manufacturer and finance companies are. An acquaintance of mine has a 2-year old car and has received numerous solicitations from Ally Financial for an extended warranty. They even offered 0% interest and to roll it into his monthly payment. Yet he received zero offers along this line from his dealership.
Extended warranties and prepaid maintenance programs bring in great revenue to dealerships. I bet that your finance departments are doing their best to sell these at the point of purchase. Why, then, aren’t service advisors making an effort to offer these programs to customers? Chances are their pay plans aren’t structured in a way that gives them any incentive to do so.
Consider educating your service advisors. Train them and implement a process in which they inform ideal service candidates about these programs and incentivize them to sell them. You may find that your post-sale warranty and prepaid maintenance penetration increases. Not only does this increase revenue but, at least in the case of prepaid maintenance, it ensures that the customer is tied to your dealership for as long as they own the vehicle. There’s no better person to sell a new car to then the one that bought their current one from you and that has been getting it serviced with you for years.
A hot topic of much discussion today is the decrease in the sales process. There are many opinions on whether shortening the time it takes consumers to buy a vehicle is the answer to providing a better customer experience. There’s no doubt that it can be arduous and exhausting for a consumer to buy a car – from finding the right one, to filling out paperwork, negotiating price, spending time in finance and then, ultimately, sitting through a lengthy presentation as the salesperson explains all of the vehicle’s features during the delivery process.
A recent story in Automotive News details how one dealership chose to take a different tactic. Instead of making a buyer endure a lengthy but necessary tutorial on a new car at the time of sale, Jaguar Land Rover of Fort Myers delivers the lesson later, at the owner’s home or business. And when it’s time for repairs or maintenance, an owner can get a loaner car delivered to him or her and avoid the hassle of driving to the dealership for service. As a result, the dealership’s CSI scores have “skyrocketed,” according to General Manager Brian Del Negro.
For the most part, customers already do their car shopping in phases, if you think about it. They start by researching or reading vehicle reviews and, according to some studies, will spend upwards of 10 hours or more online doing so. They key here is that it is highly unlikely they are doing this research all in one sitting. Then, after taking their time preparing themselves and narrowing down vehicles, they visit 1-2 dealerships. Then, in almost every case, they are pressured to make an instant buying decision (i.e. “What would it take for you to take this vehicle home today?) This, of course, is certainly understandable from the dealership’s side — it doesn’t want to risk losing the sale to a competitor. But, what if the customer simply isn’t ready to buy right then?
Whether the customer experience proves to be a great one for the consumer certainly hinges on numerous things. For some it could be the lack of pressure. Others may want an expedited buying process. While some may want to take their time. While Jaguar Land Rover of Fort Myers offers the encore delivery service, it’s certainly not mandatory for those customers who are fine with going through the delivery process on the spot. That being said, it certainly helps differentiate them from their competitors and allows customers options that they don’t get at other dealerships. One intriguing dealership-centric benefit of encore delivery is that it allows the dealership a second opportunity to build on that relationship, rather than just have the customer feel really important during the sales process, then forgotten about the next day.
These services certainly add expenses to the bottom line of the dealership. But, ultimately, are paying off with increased service business and higher CSI scores. The relationship building phase also gets extended, which allows the customer to feel more important and appreciated. And, that is the beginning of customer loyalty and, ultimately, a brand advocate.
Mimicking customer behavior is one of the oldest sales techniques in the business. So is finding common interests and building rapport. However, with three generations of car buyers in and out of dealerships daily – Boomers, Gen X and Gen Y – it’s harder than ever for salespeople to accomplish this convincingly, let alone understand what type of experience each demographic is looking for. A recent article in Wards Auto, describes a dealer that provides generational training to his employees in an effort to assist them in better handling customers. The dealership first tries to match up salespeople with customers to optimize the experience – such as a Hispanic salesperson to assist a Hispanic customer. And, when that’s not possible, the training enables the employees to better understand what type of experience each generation is most likely seeking, and to then provide that. The dealer explained that every customer is different and that salespeople shouldn’t feel as if they need to provide the same experience to everyone, as not everyone wants the same thing. In his opinion, Boomers are more inclined to want to negotiate, while Millennials want something thrown in. Older customers aren’t necessarily seeking a fast buying experience, (as has been the hot topic of late) but Millennials are much more time conscious.
What does all of this have to do with customer loyalty?
In today’s automotive marketplace, OEMs and dealers are increasingly shifting the retail battlefield to customer experience. While that may be an excellent strategy, how do you create the perfect customer experience, and deliver it consistently, if all of your customers want different experiences? If your dealership decided that a one-hour sales process is the optimal customer experience, how will that Boomer, who wants to take his or her time shopping and negotiating, feel about the experience? They will probably rushed through the process, which will either run them off, or leave them dissatisfied. On the other hand, if a Millennial is forced to sit in your dealership for 6 hours, they’ll probably feel very unhappy too.
The customer’s perception of their buying experience affects a lot of things: the likelihood that they will recommend your dealership; the type of review they share, either online or with their family and friends; and whether or not they choose to continue to patronize your dealership. As consumers are holding onto their vehicles for much longer these days, customer retention heightens in importance and these points become ever more relevant.
If you recognize that there isn’t necessarily a single “best” customer experience, but, that the customer experience must be tailored for every customer, you may find it easier to retain customers of all demographics. By training salespeople on the types of experiences different generations would like. And, by giving them the flexibility to provide that experience on an individual basis, you will have happier customers across all generations.