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Dealers should “ditch customer satisfaction”

Jim Saker

Dealers should turn their back on customer satisfaction in order to boost loyalty, according to Professor Jim Saker, Loughborough University’s director of the Centre of Automotive Management.

Saker (pictured) will argue that customer satisfaction is a weak emotion and a happy customer does not make a loyal one when he takes to the stage at this year’s AM Used Car Conference which takes place at Hilton St George’s Park, Burton upon Trent, on October 20.

A regular commentator in AM magazine and an AM Awards’ judge, Saker has long believed it is time for the industry to overhaul its approach to customer service and create a new model which befits the modern day consumer.

A crucial part of AM’s conference themed ’10 ways to boost used car profits’, customer service, retention and profitability are closely linked, but Saker will argue that as long as manufacturer incentives are continually ‘dangled’ in front of dealers, they will chase those bonuses simply because it provides a guaranteed sum of money on the bottom line.

He said: “Whilst manufacturer volume bonuses are more closely aligned to new cars, it has created a psyche of behaviour which is difficult to break. In addition, dealers are having to develop strategies to manage returning vehicles at the end of their PCP agreements and how those customers perceive their treatment, whether the car’s value enables them to more readily buy again, for example, as well as the volume of vehicles appearing on the forecourt, is all tied up with both the used car strategy and the level of customer service.

"Most dealers will attempt to combine volume, be it new or used, and part-exchanges with good customer satisfaction as to a degree, the two go hand in hand. However, good customer satisfaction does not guarantee retention and is not an indicator of repurchase intention.

“As well as new and used activity impacting each other’s performance much more closely, we must remember it is the aftersales department which is more likely to have the most touchpoints with a customer and will influence retention more. Particularly important for used car customers whose vehicles are older and will therefore migrate to the independent sector sooner. It is time for dealers to stop operating in their silos but as one, overall business.”

Frequent flyer

He added: “We keep talking about taking cues from other sectors, but very few dealers have put anything tangible into practice. As a frequent flyer, I am always greeted by my name and my loyalty is rewarded whilst in the hotel sector I have come across employees who go above and beyond to recognise me as an individual. This is the major difference between being welcomed and being made to feel welcome, which we as a sector need to understand and practice if we are to create an environment where exceptional customer service is to flourish thereby boosting retention.

“As individuals, our digital footprint is vast and easily accessible; there is no reason why the host and sales executive cannot furnish themselves with a few personal details to make people feel welcome when they visit the dealership. Meanwhile, using staff resources more sensibly such as having sales executives (and not contact centre staff) available to answer queries on live chat in the evening may also engage customers earlier on in the sales purchase journey and help establish a relationship with both the individual and the business online.

“If dealers are incentivised by manufacturer bonuses they will continue to incentivise customers to complete them in a way which best guarantees the bonus. Of course, neither dealers nor their manufacturer partners then have a real handle on whether customers are intending to return either for servicing or to purchase again in the future.”

Tickets are available to dealers and manufacturers, to book, please contact Nicola Baxter on 01733 468289, email nicola.baxter@bauermedia.co.uk  or by visiting http://used-car-conference.am-online.com/

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  • jim smith - 13/08/2015 22:24

    As an ex Sales Manager and one who is CIM qualified, I must say once again, what a load of nonsense. The age old problem continues, manufacturer volume aspirations, an over crowded market, consequently increased customer discount expectation. I recently noticed BMW dealers with rows of pre-reg for sale i.e. save £5000!!!!

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  • Paul Bhangal - 15/08/2015 08:49

    I spent 16 years working from the showroom floor into senior management in the car retail industry, then a further 12 in academia + running my own businesses. I still have good contacts in the industry, and apart from fancy technology, I see that old habits still exist. The best examples of loyalty I have seen is from staff that have worked in the same place over many years and got to know their customers really well. High staff turnover, heavy discounting will always damage customer loyalty, unfortunately this is not much of a concern to number crunchers sitting in production plants and in company HQ's. Paul Bhangal.

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  • PaBroon - 15/08/2015 11:16

    Excellent article but unfortunately as long as manufacturers continue to use existing models to pay CSI bonus nothing will change.

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