A little over a year ago, the founder of a credit card payment processing company made an unorthodox move that resulted in some very mixed reactions and a whole lot of media attention. Dan Price, founder of Gravity Payments, cut his own salary by 93% (from $1 million to $70,000 per year). He did this so he could pay every single employee the exact same amount – $70,000, regardless of if they were the janitor or the receptionist, or how long they had worked there.
The story is not completely perfect and does come with some bumps in the road – his brother (and co-founder) sued him and there was also much speculation in the media about how successful this move would be.
However, it seems to have been a good decision in the long run. According to this story on HumanResourcesOnline, revenue and profits have doubled; new customer inquiries jumped from 30 per month to 2,000 per month; customer retention rose from 91% to 95%; and only two employees quit. Add to that the 4,500 resumes the company has received since this initiative and it would seem that the company is thriving with sales, happy customers and very happy employees. In fact, the employees are so happy that in July 2016, they collectively bought their boss a $70,000 Tesla!
I am pretty sure that any business would love to enjoy similar demand, growth and employee engagement to that of Gravity Payments. However, few businesses are in a position to pay every employee an annual salary of $70,000.
However, the point of this story is really that this particular leader’s personal sacrifice was the ultimate act of appreciation. One that immediately showed his employees that he valued them. In response, the employees increased productivity and worked even harder to ensure their customers were happy. The Telsa, while a grand and generous gesture, was simply a small part of this story. The message here in essence is that engaged employees who feel valued and trusted are the cornerstone to your business’s success.
While many people assume that money motivates everyone, several studies in fact prove that simply showing an employee they are valued and appreciated motivates them more than any amount of money ever could.
Another great example is Doug Conant, the previous CEO of Campbell’s soup. When he took charge he did a tremendous amount to change company culture, including making a commitment to celebrate employees at all levels for their individual contributions and achievements.
During his tenure, he wrote over 30,000 handwritten thank-you notes to individuals that worked for the company. Past employees still contact him to this day and express how much that gesture meant to them. A single, handwritten note showed that employee that he appreciated them and their individual achievements. In so doing, he made these employees want to work harder, better and achieve more.
In our industry, where with each passing month sales staff are on a continuous roller coaster of hero-to-zero, it’s more important than ever to ensure that employees feel appreciated, valued and recognized, not just because of their sales numbers, but also for showing up and working hard. Even something as simple as personally handing out paychecks and thanking each employee can instill a sense of worth and show employees how much they are appreciated.
In doing so, perhaps… just perhaps, they’ll become more engaged, more productive and you won’t have to have a continuously running “Help Wanted” ad.
Performance Loyalty Group is privileged to have been included in not one, but two recent Automotive News articles outlining the success our auto dealer clients experienced using our products to gain and retain customers, build stronger relationships and drive more revenue.
The first was in May 2016, and highlights the spectacular results H&H Chevrolet experienced with our UltraCare Prepaid Maintenance Program.
The second was in July 2016, and illustrates the innovative way Howdy Honda leveraged our LoyaltyTrac loyalty and retention platform – along with some great creativity – to engage with their customers on social media.
Thanks to Automotive News, Hannah Lutz, Alex Kwanten, as well as H&H Chevrolet and Howdy Honda, for all of your efforts.
Read the following articles to find out what makes our tools so powerful that TWO or our auto dealer clients were recently featured in Automotive News due to their outstanding success:
- May 16, 2016 – “Charging for Prepaid Maintenance Trumps Giving it Away”
“Some dealers think freebies such as complimentary maintenance plans are good ways to boost customer retention. But the efforts are wasted if the free services go unused.
One Nebraska dealership has found success by charging for what it had been giving away. The idea: Make sure customers have “some skin in the game” when it comes to maintaining their vehicles.
H&H Chevrolet in Omaha began experimenting with complimentary maintenance in 2010, but committed to it seriously in 2013 by offering complimentary UltraCare prepaid maintenance plans from third-party provider Performance Loyalty Group.
“We saw our retention go way up” with the free plans, CEO Steve Hinchcliff says. Indeed, 88 percent of customers returned for service at some point. But, he says, “a large number of people weren’t actively using the plans, or forgot about them after the first visit.”
Customers who visited regularly often spent little. “Some customers would only want the free items,” Hinchcliff says, even if more work was needed. “That was discouraging,” he says. The average service upsell was little more than $65.
GM began offering a complimentary maintenance plan in 2013 to owners of most new 2014 Chevrolet, GMC and Buick vehicles. But in early 2015, after finding that customers didn’t use the program as often as expected, GM cut the number of free annual service visits in half to just two in 24 months.
The dealership’s experience parallels that of General Motors.
With that in mind, and after surveying its customers, H&H in August 2015 began selling the UltraCare plans. H&H charges an average of $255 per plan.
“We thought that it might make a difference if the customer had some skin in the game,” says Hinchcliff.
- July 4, 2016 – “Honda Store Finds Recipe for Success: Cookbooks Help Stir up Service Traffic”
“For Howdy Honda’s customers, creativity in the kitchen can lead to discounts in the service drive.
Five years ago, the Austin, Texas, dealership began using social media to gather customers’ favorite holiday recipes while boosting service traffic.
Howdy Honda uses a tool through Performance Loyalty Group’s LoyaltyTrac program to engage customers on social media. The dealership has 63,251 LoyaltyTrac club members and adds 400 to 450 members each month. The dealership retailed 4,470 new and used vehicles in 2015.
LoyaltyTrac integrates into the store’s dealership management system to increase customer retention by giving customers loyalty rewards based on their engagement and awarding them with discounts or coupons as they build up points for having their vehicles serviced at the dealership.
Howdy Honda offered 10,000 bonus service rewards points to customers who posted holiday cookie recipes on its Facebook page during the last two weeks of November 2011.
The dealership put all the recipes together and offered them to customers in a free e-book.
Since then, Howdy Honda has published cookbooks every year. In 2014, service advisers handed out holiday cookbooks printed by Performance Loyalty Group in the service lane.
Last year, the dealership changed course, putting together a summer picnic grilling cookbook. Customers could purchase it for $2, with proceeds going to a local food bank.
But submissions slipped, so Tina Fajardo, the dealership’s marketing coordinator, said she plans to launch another holiday cookie campaign, with a printed and digital cookbook, in November.
“We’re always trying to find different ways to connect to the community,” Fajardo said. “In Texas, homestyle cooking is a big deal. [We thought] how much fun would it be to gather those [recipes] and bring the community a little bit closer while advertising Howdy Honda?”
For more information about UltraCare, LoyaltyTrac or any of the other products Performance Loyalty Group offers to help auto dealers gain and retain customers, build stronger relationships and drive more revenue please click here or call us at (866) 744-5525.
This common saying is certainly one that everyone knows. And, whether it’s true or not, has endured time. Why? Because someone cooking for you is an intimate act that is satisfying and elicits fond memories. In essence, this act accomplished on a regular basis is supposed to be the recipe (pun intended) to win the love of a man, or woman. The gender of a person has little to do with what it takes to win their hearts.
That being said, this simple saying can easily be transferred from the realm of interpersonal relationships to the world of business. How? Every time a customer visits or interacts with your dealership, you are essentially feeding them.
Customers have appetites for quality products and excellent service. Just look at the hoards that stand in line for hours (or sometimes days) for every new Apple product. With each commercial, tease, leak or ad, Apple caters to that appetite. But why do consumers do this? Well, Apple has created a brand trusted by the masses. Consumers believe the product(s) Apple develop will be of exceptional quality and that they will receive an excellent customer experience while using them. The food in this equation is multi-dimensional.
Let me explain:
Apple is, by nature, a very secretive company when it comes to product releases. However, there are usually numerous “leaks” for any product offering, which culminate with a very short period of time between the customer entering the restaurant (the official announcement) and the main course (product release). These leaks serve as teases to their customers and whet their appetites for the product or service. Without these, customers would be left in mystery, with little information to help in the buying decision, and a rather short period to decide whether they want to plop down the typically premium price, or perhaps wait.
Once the main course is served, all preconceived notions, hopes, wishes, dreams and speculation end and reality sets in. Either the product or service lives up to the expectations of the customer – or they do not.
Customers are constantly fed either the appetizers (your marketing) or main courses (the actual customer experience). How they perceive or experience both can weaken, or strengthen their loyalty. If the experience is everything that it was hyped up to be, and the product fulfilled their expectations, they will probably get in line a little earlier the next time and be less skeptical or trigger-shy.
All dealerships advertise. The messages that you put out there whether it is about price, experience, or other unique selling propositions, whet the consumer’s appetite and get them to visit your dealership. Once there, their actual experience can either reinforce your marketing messages or convince the customer that you made false promises and are insincere.
Make sure that the food you are feeding customers – whether it’s the appetizer of the main course – fulfills all of your customer’s expectations and you’ll find that with each visit, they love your restaurant that much more.
And when the food is great, people tell their friends. Which is exactly what you want.
While car dealerships aren’t necessarily held in high regards by consumers, there are many dealers out there that are pillars of their community. Big hearted philanthropists who understand the sense of community and the importance of being involved. A great example of this – and the impact it has had on the community – is the story of a dealership in Victorville, CA, featured in a recent article in Automotive News.
Victorville Motors decided to create a promotion: “It’s a Gas to Go to School,” to encourage local high school students to attend class. This promotion, in cooperation with the local school district, offers students the chance to win a free car if they achieve perfect attendance throughout the school year. Students with perfect attendance records receive a golden ticket and access to a day-long celebration event which culminates in a vehicle presented to one deserving student.
Since inception, the promotion has expanded to include teacher attendance. It is now a bi-annual event with more districts and schools participating. Now, more than 100 local businesses also donate prizes, which increases the number of winners. According to the article, this contest has created more than $10 million in additional state funding to the districts involved, as California schools are funded by average daily attendance. In addition, it has saved these districts over $600,000 in teacher pay that would have been paid to substitutes had teachers taken their sick days.
And what does the dealership get? The vehicles given away are wrapped with advertising for a year, so in effect the dealership gets mobile advertising around the local area for a whole year. In addition, they have the attention and appreciation of the staff, parents and students of all of the school in all of the districts that participate.
But, you ask, did it help them sell more cars? According to dealer principal, Tim Watts, he “stopped counting at 300.” Do you feel two free cars a year is a lot of money? Would you spend $40,000 to sell 300 cars? I think most dealers would.
This is a great example of how dealership involvement in their local area impacts the community and captures the hearts, souls and attention of… well… just about everyone. It’s hard to believe that all of those included and/or affected by this bi-annual contest wouldn’t give Victorville Motors first shot at their business. It is one thing to SAY you love your community, but this type of community involvement PROVES it to the people that matter most… your customers.
And, all of the high school kids in Victorville will eventually need to buy a car. If the contest continues, (which is likely as it keeps growing) it’s very possible that it will continue to influence consumer buying behavior in the local market across even more generations.
And, when you have positive word-of-mouth locally – well, you can’t buy any more effective advertising than that.
There have been countless studies about employee engagement and how, when engaged, employees tend to be happier, more productive and deliver a better customer experience. With a 70 percent annual turnover rate in sales, this is an area that the auto industry – at least on the sales side – has a problem with. Don’t think the auto industry is alone, however. According to an article posted on Digitalistmage.com, a recent Gallup poll found that “67 percent of workers aren’t engaged—or worse, they’re actively disengaged—a number that’s been pretty stagnant for the past 16 years.”
The article went onto state that companies who are participating in these polls and then taking action to create initiatives within their organization are failing as well. Why? According to the article, the reasons are two-fold:
- By the time the poll results are published, the results are outdated. This means that initiatives are created based on data that is no longer be valid.
- Management wants to fix things on their own (i.e. create initiatives, champions, etc.)
- Apparently companies are too sensitive.
You can’t fix any problem with old data. If you don’t know what’s going on in the dealership RIGHT NOW, any attempt you make at changing culture and winning over employees will more than likely fail. On top of that, engaged employees aren’t something that can be magically created. Management can peruse data and create ineffective programs even with the best of intentions. Employees must decide on their own to be engaged with a business. Management can’t make them.
So if, as the article states, we’re all doing it wrong and have been for almost two decades, how do we improve? The article suggests that a more modern – and effective – approach to increasing employee engagement lies in three areas:
- Empowering individuals – Everyone likes to talk about open door policies between management and employees. However, in reality many employees hesitate, especially in our industry, as there can be a fear of repercussion or that it perhaps won’t accomplish anything. It’s not uncommon for management changes to usher in a spat of terminations, simply because the new managers want to bring in people loyal to them. Trust tends to be lacking and without that trust, employees will never be engaged.
- Increased transparency – If you think that dealerships only struggle with transparency issues when it relates to consumers, you’d be sadly mistaken. There is plenty of information that is withheld from sales staff under the presumption that it’s for their own good and justified by the fact that sans the information, the sale will end up with a higher gross. The mistake here is that chances are good the customer already knows the information that the dealership is withholding from the salesperson. I get the philosophy behind it. And, prior to the auto industry getting hit between the eyes with the information revolution, perhaps it was a good strategy. Not anymore. How is a salesperson supposed to consult and build trust with a customer when they have less information than the customer? It’s highly likely that the customer won’t believe the salesperson doesn’t actually have the data, but think that they are withholding it intentionally.
- Prioritizing wellness – Retail car salespeople work brutal hours. We’ve all been there. And even salespeople fortunate enough to work at dealerships that offer flexibility, and/or moderate work schedules, must learn to cope with the stress of feeling as if they need to be at the dealership all the time, as the customer may come back and buy from another salesperson, so they lose half the commission.
Employee wellness is imperative to employee engagement. While the auto industry may be their career, don’t force employees to choose between family time, healthy living and mental well-being. Working 70 hours a week, never seeing their families and living off of whatever fast food place is nearby your dealership is a recipe for burn out regardless of the industry.
Employee engagement, employee retention, customer experience and the value of human capital are hot terms in the auto industry right now. To truly create a culture where employees want to work for your dealership and are actively engaged in its success, consider the importance of and think about how the three areas above might be applied in your dealership Just because we’ve always done it that same old way doesn’t mean that way is still viable. The employees are voting with their feet and to keep them happy and engaged with your dealership, it may be time to change things up a bit