Browsing articles tagged with " loyalty"
Feb
6

Creating Brand Advocates Is Not as Hard as You Think

By Mike Gorun  //  Uncategorized  //  No Comments

 

As countless messages fill the world, consumers increasingly turn to family, friends, peers and, even strangers, to make buying decisions. Whether those decisions are as broad as who to do business with or are centered around which item to buy to help solve their problem, word-of-mouth and online reviews have become a key part of that decision-making process. Too many bad reviews via word-of-mouth or online can instantly cause a customer to start looking for alternative businesses or products.

Negative reviews can cause you to lose business. This is why there has been a big push for the past decade or so in the reputation management area. Dealerships are increasingly sensitive to reviews and are monitoring and responding to them as needed. The prevailing theory is that customers with bad experiences are more likely to leave negative reviews AND unhappy customers will tell more people about that poor experience than happy customers will about a good one…. But is that really true?

An article on Entrepreneur reports that companies who deliver a positive customer experience enjoy revenue growth up to eight percent higher than market average. It also shared that, while customers with a negative customer experience will tell multiple people about that experience, they tend to do so once then move on to the next company.

Meanwhile, customers with positive experiences tend to keep coming back and, through a consistent positive customer experience, tend to tell more people over the course of time with each and every experience. The research revealed that over the course of a happy customer’s lifetime, they turn into brand advocates and create more than 14 times the value of those customers with negative experiences.

So, what does this mean when it comes to reputation management and handling reviews in general?

For the most part, dealerships tend to focus on and react to NEGATIVE reviews. Nobody really wants an unhappy customer – especially one that has taken to the Internet to share that negative experience with the world.

What typically happens is that management jumps right on that negative review and reaches out to these customers in an effort to resolve their issue. This accomplishes three things: 1. If you can solve the customer’s problems there’s a possibility that they give you another chance and perhaps even remove or edit the review; 2. By simply responding to the review publicly, other consumers considering your business will see you care about your customers and may not give those negative reviews as much weight in their decision-making process; and 3. This increases the chances that a customer continues to do business with you.

But what do many dealerships do with excellent reviews?

For the most part, nothing!

Perhaps if a particular employee is mentioned, he or she will get a “good job” from management. Everyone will be happy and thankful for the positive review. But what about the customer? While you are certainly listening to them because you see the positive review — here’s the kicker: they don’t know that you are!

Customers with positive experiences can ultimately increase revenue and spread positive messages and word-of-mouth recommendations. Therefore, it’s just as important to acknowledge positive reviews as it is to respond to the negative ones.

Recognizing a positive review shows happy customers that you are listening to them and appreciate their business. Personalized “thank you” responses will go a long way with that customer. Acknowledging them reinforces the type of behavior you want to continue… namely seeing that these customers continue to share positive messages to their networks, which ultimately creates brand advocates.

In the end, responding appropriately to all consumer feedback, good or bad, is important. But for different reasons. It ultimately all ends up as a part of each individual customers TOTAL customer experience with you.  You probably can’t fix all of the unhappy customer’s problems. However, in the end, you can say you tried and others will see that you did.

For those happy customers, a simple thank you adds just one more piece to that experience. Either way, your dealerships will win more often than lose.

Jan
23

Don’t Eat Tomato Soup with Chopsticks

By Mike Gorun  //  Uncategorized  //  Comments Off on Don’t Eat Tomato Soup with Chopsticks

As a dealership there are many ways you can identify if you’re losing customers. Through data, you can see that John Smith used to come into the dealership regularly for service but then disappeared without a peep. Why did John Smith stop coming in? Do you know? You could certainly reach out to John and see if you can get any insight, and he may even respond and tell you why. Perhaps he simply moved out of the area. But what if he defected to competitor or took his business to an independent service center? Wouldn’t you want to know?

An interesting article on allbusiness.com discusses how businesses can’t implement or maintain customer retention or loyalty unless they understand the reasons why their customers are leaving. In an “eating tomato soup with chopsticks analogy, the author explains that without knowing the “why,” when it comes to customer defection, “you may be getting a little taste, but you’re not really catching any of the good stuff.” According to the article, the three reasons customers leave are as follows: they had a bad experience, their loyalty isn’t being rewarded, or they found a better deal elsewhere.

When it comes to these three reasons for customer defection, dealerships are certainly challenged – probably more so than other retail and service industries. Many consumers already enter the transaction with skepticism and low expectations.

Well, what about rewarding loyalty? If customers are defecting because they don’t feel appreciated, that would certainly be an area any dealership should consider changing. There are many ways to show a customer they are appreciated — not just through loyalty programs. Taking the time to get to know a customer, greeting them by name, smiling and thanking them for their business — these are all ways staff can show appreciation and make a customer feel welcome. A loyalty program on top of these basic interactions can keep a customer engaged and loyally returning.

If you find that you’re losing business because customers are getting better deals elsewhere, you have two choices: offer better deals or build more value into your services. As there will always be competitors willing to meet or beat prices on vehicles, many dealerships have chosen to add value through extra services including free car washes for life and other perks. Will this tactic work and help overcome losing customers over price? Only if the customer experience that goes along with any value-adds is also great.

A customer isn’t going to care about free car washes if they have a horrible experience and decide to never return. The same applies in the service drive. I’m pretty sure that most dealerships aren’t going to want to try and match pricing with independent service centers and you shouldn’t have to. Dealership service has many advantages over independents. The problem is that many dealerships don’t make customers aware of those advantages. So, when a customer sees a $19.99 oil change coupon, they make the decision to leave your business based on price alone, without factoring in why dealership service is superior.

If you can address these three challenges in your dealership which cause customers to defect and understand exactly why it is happening, you’ll be well on your way to creating a customer retention strategy that is both effective and reliable. As the old saying goes, if you don’t know it’s broken, you cannot fix it.

Dec
26

Don’t View Questions as a Weakness

By Mike Gorun  //  Uncategorized  //  Comments Off on Don’t View Questions as a Weakness

A recent article on CustomerThink explains how many companies view requesting customer feedback as a weakness. However, by asking questions you can optimize the results of your CX experience and save money because, sometimes what WE think should improve the customer experience isn’t what the customer wants.

If you don’t consult with customers about what THEY think is wrong with the experience, then craft solutions to solve those issues, you can end up like a fortune teller, attempting to read the minds of your customers without really having a clue.

On top of that, customer experience is an ever-evolving thing. You could create the best customer experience in the world and flourish from it. But, if you just maintain the status-quo, you may soon find that your customer experience is outdated – not unlike that laptop or iPhone which is succeeded by the “next best thing.” Customer experience is dynamic and should be a continuous initiative.

When developing any CX initiative, keep in mind that the only way to truly know issues of importance to your customers is to ask them. Find out what they want improved or how their experience is negatively impacted by asking them directly!

However, you won’t get all the data just by asking your customers, because they don’t always respond honestly — perhaps they are too polite, afraid to offend anyone. So, you also need to ask your employees. I promise you this is far from a weakness, but rather a show of strength, leadership and caring.

By asking questions of your customers and employees your dealership can show that it cares about them; that you are open to suggestions, ideas and criticism. Nobody thinks anyone is perfect, I guarantee you that. The person who thinks they are perfect is the one that probably isn’t.

Take the time to be inquisitive. Never stop asking questions of both your customers and employees. Then adapt, change processes or implement new ones and you will see that everyone works better together to win the game.

Nov
7

The Key to Modern Customer Loyalty

By Mike Gorun  //  Uncategorized  //  Comments Off on The Key to Modern Customer Loyalty

As times change, so do consumer desires. What hasn’t changed are the fundamental business practices which have led to customer loyalty for hundreds of years. That small shop owner in the early 1900’s kept his customers coming back through friendly and familiar customer service. Granted, those customers didn’t have as many choices as today, but that’s why businesses need to work harder these days to create loyalty. Today, for consumers it is all about convenience.

 

An interesting article in Automotive News shares why Audi has been able to post 96 straight months of increasing auto sales and soared from #18 in 2008, to its current position of #1. It’s not due to great deals or superior vehicles. Instead, it is fundamental changes in business practices at the OEM level which support dealers and allow them to provide better and faster customer service. Two key changes credited for this consistent increase in sales are overnighting parts and empowering dealerships to make decisions.

 

Previously, Audi used a slower method to ship parts for customer repairs. Customers were frequently forced to reschedule appointments as the parts did not arrive on time. In fact, according to the article, Audi previously discouraged dealers from ordering parts overnight. By changing their parts shipping policies to all overnight, Audi dealers receive parts faster and can turn around customer repairs with greater speed and efficiency.

 

Audi also changed its goodwill repair program and now allows service managers to perform goodwill repairs without authorization from the factory. Service managers can fix problems immediately, rather than making the customer wait, which of course means an improved customer experience.

 

While overnight shipping is costlier, the benefits derived from increased customer satisfaction proved to be well worth it. Of course, Audi was nervous about giving its dealerships an open wallet with the goodwill repair program. However, after an initial spike in goodwill repairs, the program relaxed into a stable amount, which alleviated those concerns.

 

Modern customer loyalty is cemented in convenience and experience. Customers don’t have time to wait around or reschedule. Nor do they like the aggravation when the employee has no power to fix their problem. They will simply vote with their wallets and head to the next dealer or independent.

 

By consistently providing convenient and friendly service, quickly and proactively fixing problems as they appear, you can keep those customers coming into you shops. In addition, if you wisely work a well-run equity mining program, that can also translate into additional sales, without the expense of acquiring new sales customers.

 

Evaluate your service department and see just how convenient it is to your customers. In addition, analyze your dealership’s use of an existing OEM goodwill program, if one exists. Is it being used regularly, or not at all? If your manufacturer doesn’t have a goodwill repair program, consider creating one at your dealership and empower staff to individually decide when it’s needed to fix a customer experience issue.

 

Your service staff will be motivated to fix problems rather than be left feeling powerless. Customers will not only appreciate it, but forgive. Sure, mistakes happen. But a mistake will only hurt loyalty if it cannot be resolved to the customer’s satisfaction

 

There’s nothing worse for your bottom line than regularly losing business that should be yours. It’s certainly much less expensive to fix a problem and have that customer stay loyal, than to spend the money to acquire a new customer to replace them.

 

Consider that as you ponder whether your dealership should have a goodwill repair program — or not. I promise you’ll come out further ahead by having one. Audi discovered this – and it took them to the top and has kept them there!

Oct
24

Information is a Powerful Loyalty Tool — if Used Properly

By Mike Gorun  //  Uncategorized  //  Comments Off on Information is a Powerful Loyalty Tool — if Used Properly

In today’s retail automotive climate, customers have more access to information than ever before. Quite often, a properly prepared and researched customer comes into the dealership armed with more knowledge than the salesperson. This can cause friction as the customer interprets the salesperson as deceptive when, in fact, they may truthfully just not have the information.   

 

In the past, sellers had a distinct advantage over customers. But no longer. So, how can your dealership use information to foster customer loyalty?   

 

According to an article on Inc.com, there are essentially two ways that retailers can use information in a transaction. You can use it to gain short-term profit, or use it to the customer’s advantage to build trust and loyalty. For example, when visiting Amazon to buy a book, if you’ve already purchased it before, Amazon will inform you prior to purchase, in case you forgot. This information builds a better and more trusting customer experience. 

 

While customers have ACCESS to more information, many – especially in vehicle sales transactions – don’t have all the information they need. And, the reason is quite simple: Vehicle sales transactions are incredibly complicated! There are many pieces to the transaction: price, trade-in value, down payment, interest rate, etc. While many customers focus on payments, some may neglect one or more pieces of the puzzle. In these cases, a dealership can choose to keep the secret (information) to themselves and score higher gross on the deal, or they can assist the customer by advising them and providing information for the best course of action for the customer’s specific circumstances.   

 

If your dealership chooses to keep the information to itself, you run the risk that the customer will find out after the transaction and feel swindled, end up disgruntled and post negative reviews. To say nothing of the fact that the customer will probably take their business elsewhere, since they no longer trust your dealership.   

 

In contrast, if your dealership chooses to share the information to benefit the customer, that very action is appreciated and builds trust with the customer, increasing the likelihood that they will leave happy, desiring to continue to do business with you. In addition, they are much more likely to refer their friends and family to your dealership.  

 

The long-term success of a dealership requires a customer base it can rely on. It’s no longer a viable business model to continuously be in customer acquisition mode. If you cannot retain your customers, you will end up running in place, scrambling to replace every customer that defects to your competition. There is no room for growth in that scenario – I am sure you have heard a million times that it costs more to acquire a new customer than it does to retain an existing one.  

 

The next time you find yourself in a situation with a customer where you have a choice about if you should use information to benefit yourself, or the customer, keep this lesson in mind. While you may lose a little immediate profit, the long-term benefit (and profit) that comes from a happy, trusting, loyal and retained customer is far more beneficial. Think of the future income! 







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