IN THE FIRST OF A THREE-PART SERIES THAT LOOKS AT CUSTOMER SATISFACTION ACROSS AUTO RETAILING FROM OEM, TO DEALER TO CUSTOMER, MOHAMMAD SHAHZAD DISCUSSES THE MANUFACTURER ROLE
Customer satisfaction, customer service, customer relations and CSI are words that have been used frequently in the automotive industry. They have been defined and discussed by everyone: manufacturers, dealers and customers. Each of these groups has a different perspective on the issue caused by the difference in priorities and needs. Everyone recognizes the importance of the issue, but they often disagree on how to achieve satisfaction and just whose job it is to deliver it overall.
At each point of contact between a dealership and a customer, the customer assesses the encounter as excellent, good or bad.
The sum total of ALL assessments by the customer represents their CUSTOMER SATISFACTION level. Remember — it takes 13 positive customer experiences to eliminate only one negative experience.
There are lots of other ways to describe customer satisfaction but based on my own experience, perhaps the best definition is: “Satisfaction occurs in a consumer’s state of mind when perception does, or does not, become reality,” — Mark R. Bozian, CEO, The Brimell Group, Toronto, Ont.
IT’S PERCEPTION THAT COUNTS
Think of it this way: if you sell two new vehicles, with the same trim level at the same price, you may find one person 100 per cent satisfied with their purchase while the other might have concerns. And herein lies the key, the fact that satisfaction really boils down to perception, not the product, price or process.
The brand loyalty and retention of the customer is built through strong relationships with the support of the dealers’ network. However, customer satisfaction starts with the vehicle manufacturer (OEM), just as the quality of water is determined by its source.
OEMs, whether Domestic or Import brands, have been major players in customer satisfaction for years. They continuously research and measure CSI, as well as study consumer opinions of product quality and design to meet the often challenging and ever-changing needs of automobile buyers.
Additionally, OEMs also measure CSI based on the ability of their franchised dealers to make and keep customers happy. They have developed a fairly uniform practice of surveying customers’ opinions on both the vehicle sales and service experience. Whether it is called CSI, TPE, TSE, or OSI, the goal is to determine how their franchises are performing, both as a group and also as individual dealerships.
Customer satisfaction has emerged as the number one issue in manufacturer/dealer relations in recent years. Competition is the primary reason that OEMs place so much emphasis on customer satisfaction. From the manufacturer’s perspective, the business of building and selling vehicles is more competitive than ever before.
AGGRESSIVE MARKETING
As a result, most OEMs frequently deliver aggressive marketing campaigns such as offering extra incentives like factory cash rebates, extended factory warranty periods, gas cards and low or zero per cent interest for up to 84 or even 96 months. Not only are such programs designed to wrench away customers from rivals, they’re also designed to boost business for dealer service departments and collision shops, since more vehicles on the road means more need to be service and/or repaired.
In the past, OEMs traditionally held little control over the operations of their franchised dealers. A great degree of influence was not necessary when the primary differentiators were styling, price and quality, all of which were controlled essentially outside the sphere of the dealer.
Today things are much different. OEMs are operating in fiercely competitive markets — set to become even more so as product quality and price differentiation continues to narrow. As a result, the treatment and service that end users receive through the dealership, becomes ever more vital to the continued success of an OEM.
THE QUALITY ISSUE
Although vehicle quality is improving across the board, it is still an ongoing challenge for most OEMs, and some could argue that the amount of technology found in today’s vehicles (required to meet ever-stricter safety, fuel economy and emissions standards, not to mention consumer demand for in-vehicle infotainment features) and more frequent product redesigns means there’s a greater risk for problems to arise.
J.D. Power’s Vehicle Dependability Study, which is used extensively by manufacturers and suppliers worldwide to help them design and build better vehicles, tends to result in both higher resale values and customer loyalty. It also helps consumers make more informed choices for both new and used vehicle purchases.
No one is perfect however. A recent study by J.D. Power, which examined problems experienced during the past 12 months by original owners of 2011 model-year vehicles indicated that with 68 to 185 problems per 100 vehicles, no one individual model was without issues.
“By combining our customer research with trade-in data, we see a very strong correlation between dependability and real-world brand loyalty,” said Dave Sargent, Vice-President of Global Automotive at J.D. Power. “Also, we see that brands with lower dependability are likely to be shut out of a significant piece of the market, as many consumers will not even consider purchasing one of their vehicles because of concerns about its perceived reliability.”
Customer satisfaction is viewed as a major battleground between the manufacturers now and will be even more so in the future. Manufacturers must rely on their franchise dealers to deliver the best service to the customer and that requires strong, solid, OEM/dealer relationships. Next time we’ll take a look at customer satisfaction from the dealer’s perspective.
