Retention to Loyalty
What’s the difference between a retained customer and a loyal customer? According to the manufacturers, a retained customer comes back to the dealership annually. Jim Davey, JM&A assistant vice president, field services operations, says that if auto retailers embrace the concept of making customers feel good about their visit to the service department, they will get much more than customer retention and one sale a year. They will get customer loyalty, which translates into more sales and more referrals.
“We’ve trained people on how to satisfy customers in the hopes that we’d retain customers. Has that worked? No. Our retention is just as bad today as it was five years ago as an industry,” Davey says. “If satisfying customers didn’t cause retention, then what is? Making customers feel good. The customers we have who are loyal feel good.”
Loyal customers feel good about the dealership, Davey says, because the advisor on the service drive works to build a relationship with them. But that doesn’t happen at many dealerships.
“If I’m sitting in the service department and ask a customer who helped them, they’ll say, ‘That tall, grey-haired guy,’” Davey says. “The tall grey-haired guy can’t tell you the customer’s name. They’ll say, ‘The guy who drives the MINI.’ You can’t have loyalty with nameless, faceless people. Nameless, faceless people come back once a year for regularly scheduled maintenance. Loyal customers will come in two or three times a year to buy tires, have them rotated, and get a safety check before they head out on vacation.”
Creating Emotional “Wow”
Some dealers think that the key to customer loyalty is to give them a physical “wow” at the store, whether it’s vacuuming the inside of the vehicle or putting a coffee bar in the showroom. Those are physical wows, which cost money.
Emotional wows make customers feel good all the time — and they don’t cost the dealership anything beyond training.
“Customers will not always remember the event,” he notes, “but customers will always remember how people made them feel. … If we want people to positively, emotionally impact customers, we need to continually train on processes, word tracks and making customers feel good about coming into our place.”
Every Interaction Has an Impact
Whether it’s intentional or accidental, a service advisor will treat every customer in one of three ways — a negative manner, a neutral manner or a positive manner. Typically, it’s a neutral manner, which means that the customers feel nothing when they come into the dealership.
“We don’t make them mad, but we also don’t make them happy,” he says. “Then we expect customers with no emotional attachment to us to come back.”
Treating customers in a neutral manner is “just as bad as a negative and it might even be worse,” Davey says. “We know that the people we treat in a negative way are never coming back. If we treat people in a neutral way, we’ll never know if they leave us. They’re silent.”
To illustrate the impact of making customers feel good, Davey says, he often uses examples from outside the auto industry. Men go back to the same barber all the time, not necessarily because of the best haircut. “They go because it’s a relationship. They feel good. The barber is talking to them about things other than hair. They get to know their families.”
He also shares the example of Ritz-Carlton hotels, which has tremendous customer loyalty. People certainly don’t go back to a Ritz-Carlton because they got the lowest price on a hotel room; they return, Davey says, because of how the staff makes them feel.
When they pull in, they’re greeted by name. The valet in the drive will say, “Welcome back to the Ritz-Carlton.” They get the customer’s name and radio it to the front desk, where they’re greeted by name. Wake-up calls are from a person, not a recording.
None of that happens by accident. It’s the result of continual training.
“My neighbor works there; he is trained every week,” Davey says. “We train people in the auto industry for a week at best. What often happens today is people are told on the first day of work, ‘You’re hired, go make customers happy and sell a lot of work.’”
A Standard for Customer Loyalty
Most people probably think they’re treating customers in a positive manner. Without setting standards and training on them, however, it’s impossible to be sure. To ensure that service advisors make customers feel good about the service drive experience, service managers need to set core competencies and have a system to measure accountability.
JM&A Group has created a set of core competencies for service advisors and put them into word tracks and role-playing exercises. If an advisor includes all the elements of the process, that’s a score of 100 percent. If they get half of them, that’s 50 percent — and a clear indication of where training needs to be done.
For example, the JM&A service write-up process starts with a friendly meet-and-greet: “Hi, welcome to John Smith Motors.”
“You want it to be a social interaction, not a transaction,” Davey says. “ In a social setting, would you walk up to someone and say, ‘Can I help you?’”
The greeting should end with the service advisor giving the customer his or her first and last name.
“You put it at the end so the customer responds with their full name,” Davey explains.
Once the service advisor learns the word track, it’s time to role-play and practice. The manager should then observe the service advisor on the drive.
“What you’ll observe is that they don’t do it on the drive, so you critique and coach them on the drive. Now you can hold them accountable to a standard. We couldn’t do that before because we didn’t have the standard.”
To be proficient in a core competency requires a scoring system. With JM&A, a score of 95 out of 100 demonstrates proficiency in the core competency.
“If you start scoring your people, you’ll be able to affect customer loyalty because you’ll affect your employee behavior,” Davey says. “That will cause customer retention. I truly believe that making a positive, emotional impact on customers — making them feel good — will revolutionize the way our business is run.”
Jan 1, 2014