One of the blogs I write for monthly is called BrandingWire. We are a force of 12 bloggers who all publish posts, once a month, on the same topic. This month’s topic: car dealerships. I will share with you some observations, lessons to take away, as well as examples of dealerships doing it right for their customers.
Car dealerships are not always a positive topic of conversation. Listen in on some of the comments heard from customers at car dealerships:
“I dread the hard sell at the dealership.”
“I don’t want to endure that kind of psychological warfare.”
“I am investing in a 5-10 year experience; who I buy from is critical.”
Once loyal to a brand, many customers come back to buy from that car manufacturer again and again over the years. Even their children are influenced by what kind of car their parents drive. Owner loyalty is the holy grail for car manufacturers. But what drives it (so to speak)? And what can car dealerships do to improve it?
Face of the Brand
Car dealers are the face of the corporate brand to customers. They are in charge of local customer treatment and have some flexibility in what they can offer, especially when it comes to building customer loyalty. However, some car dealers focus so much on the short-term measures, mainly sales, that they fail to create a dealership experience that will bring customers back for more. In addition, many dealers are located on the town’s “auto row” among competing dealerships, where the goal is to keep the customer on the lot or in the showroom.
Customers are also turning to brokers and the internet to ease their car-buying experience. Recently, we purchased a new truck. Dreading the “car dealer negotiation” game, we started with the internet sales departments of the dealers where we were interested in buying. This provided a no-haggle experience, with prices sent over email or given to us over the phone. We had immediate response from most car dealers we contacted this way.
Lesson 1: Make it easy for customers to buy from you. Internet sales departments are one way of creating a no-hassle method of buying (and selling) cars, thus improving the customer’s brand perception when they come in to sign the papers.
Lesson 2: Understand the buying experience from your customer’s point of view. Map out what it looks and feels like when a customer comes in to your dealership, from the test-drive to the purchase and negotiations/financing. Where are the snags? When are there long waiting periods? Customers who have a good experience are likely to come back for more.
Lesson 3: Thank your customer for buying. Gift-after-purchase programs can surprise and delight customers. Here are some tidbits from a customer survey after one of these programs:
75% of recipients told others about the gift
30% of those told 4 to 7 people
98% would recommend the brand to others
71% said the gift exceeded their expectations
(source: Incentive Central)
Lesson 4: Make sure the first 30 days of ownership are a great experience. Customers want reassurance they have made the right decision. Creating a “1st 30 Days” program could include customer treatments such as the thank-you mentioned above, a DVD sent to the new owner highlighting car features with “how to use” lessons, offers for a free car wash and oil change, and whatever else your local customers would consider worthwhile to bring them back to the dealership.
It’s All About the People
Forward-looking car dealers realize that most brand impressions are made in one place: the service department. Service provides repeat business and an ongoing revenue stream for dealers. Customers care about one thing: getting their car back, in good shape.
J.D. Power recently conducted their annual customer satisfaction study on service at car dealerships. Critical factors going into dealer ranking included user-friendly service, service delivery and quality, the in-dealership experience, and service initiation. Interestingly, drop-in customers, without a scheduled appointment, were more satisfied than those customers with an already-scheduled appointment! In many cases, customers are not really differentiated by whether they have made an appointment (unlike restaurants, where those with a reservation are taken in first).
Lesson 5: Set customer expectations in the service department. Make sure customers know what they can expect when they bring in their car for service – including time expected in waiting to see a service representative, time expected to perform the maintenance/repair, impact on their day, and costs.
One other key factor in creating great customer service is the service advisor. If a service advisor spends time with the car owner helping to set expectations, as well as explaining the services performed after they are completed, customer satisfaction and loyalty increase. Here are some stats from the aforementioned J.D. Powers findings:
Of those who were delighted with how work was explained—even when their repair was not completed correctly the first time—72 percent said that they would definitely return to the dealer for service covered under warranty, compared with only 42 percent of customers who were satisfied or indifferent. Nearly one-half (47%) of delighted customers report they would definitely return to the dealer for maintenance or repairs that they would have to pay for, compared with only 17 percent of those customers who were satisfied or indifferent.
Lesson 6: Your people make a world of difference. Customers build up trust in a dealership when there is consistency in the people they are dealing with. If they see the same service advisor time after time, they feel they are being valued in a relationship. Employee retention in the service department is therefore critical to customer retention and future sales.
Lesson 7: Create a great service experience. Customers want to have their car serviced as quickly as possible while inconvenience is minimized. Dealerships can make the service experience easier to handle in various ways:
– Offer rides to pick up or drop off customers or their cars.
– Offer loaners for longer maintenance/repairs. Be sure the loaner is clearly labeled as such (ex: Loaner car provided by Ford of San Diego).
– Return the customer’s car clean, both inside and out.
– If the service is quick, offer an area where customers can make phone calls, log on to the internet, or grab a cup of coffee while they are waiting.
Doing it Right
One dealership who has a motto of “customers for life” is Longo Toyota in Los Angeles, California. Nearly 80% of their sales are to repeat customers. This huge dealership includes amenities such as free wi-fi throughout the dealership, a children’s play area, a business center, AAA and Enterprise Rent-a-Car offices on-site, as well as a Starbucks and a Subway sandwiches restaurant. In addition, they offer a “New Owner Event” to those who have just bought a car from them including food, prizes, a gift certificate for a free oil change, valet parking, and a free car wash. This is a great “1st 30 Days” experience!
I also just read an article in the Ventura County Star newspaper about two dealerships who are giving their showrooms a makeover with the customer in mind. New facilities offer free wi-fi, places to plug in laptops and work, flat-screen TV in the waiting room, free coffee, and even cookies baked fresh at the dealership. They are striving to make customers feel welcome, feel comfortable, and be willing to tell their friends about the great service. For these dealers, customer service is their top priority.
How can car dealerships create customers for life? Focus on the customer, meet their needs, and build trust first and foremost. Make it easy for them to do business with you. Create a fabulous experience each time the customer steps foot on the dealership property (in person or online). Ensure the customer is thrilled in their first 30 days of ownership, and beyond.
The days of high-pressure sales tactics and shady car-parts are gone. The era of customer service and convenience is here. Wanna go car shopping?
Get more high-voltage ideas at BrandingWire.com.
Other members of the BrandingWire team include: Olivier Blanchard, Derrick Daye, Lewis Green, Ann Handley, Gavin Heaton, Martin Jelsema, Valeria Maltoni, Drew McLellan, Patrick Schaber, Kevin Dugan and Steve Woodruff.