Research steers auto makers toward better customer satisfaction

Switching gears

Though it’s still a staple of many auto industry customer satisfaction efforts, the paper survey is slowly being replaced. While written surveys are usually inexpensive, they lack immediacy (an unsatisfied customer may stew for weeks or months before a company responds to their complaint), they typically earn low response rates, and they’re open to misuse. Stories abound of salespeople practically filling out survey forms for their customers to ensure they score well and avoid the punishment that often accompanies a poor evaluation.

In light of these drawbacks, many car makers have turned to the telephone as their preferred satisfaction research vehicle. Telephone interviews earn a better response rate, are timelier and provide dealers and manufacturers a steady diet of that magical elixir so prized by satisfaction gurus: the voice of the customer.

Dan Girard, retail sales support manager, Mitsubishi Motor Sales of America, Cyprus, Calif., says that the company switched several years ago from paper surveys to telephone surveys conducted by Sky Alland Marketing, Columbia, Md. "We found out two things from the paper survey: you don’t get the response rate that you want, and it’s pretty impersonal. With the telephone approach, we’re able to contact about 75 percent of our customers. Surprisingly, we have a less than 1 percent refusal. And we’re getting very good information directly from the customer; we know that their replies are not being coached in any way. It also gives us a chance to thank them for their purchase. The dealer already does that but we think it’s important for us as a manufacturer to do it and get the relationship started on a positive note."

Telephone research also offers greater immediacy, says Joe Tate, team leader for Customer Care Strategies, Volkswagen of America, Auburn Hills, Mich., also a Sky Alland client. "Mail can be effective in giving you more detail, but it doesn’t allow you to respond quickly to customer issues. We wanted to have a more responsive system to hear the voice of the customer more clearly and at a higher volume. Once we saw the benefits we went to telephone and the results have been much more to our expectations. With Sky Alland we get a 70 percent complete rate versus a 20-30 percent response with mail."

George Cabanting, manager, customer commitment, Porsche Cars North America Inc., Reno, Nev., says that his firm also experienced low response rates with its paper surveys, which is one reason Porsche now uses the services of Sky Alland Marketing. "We found early on that our clientele were not predisposed to filling out surveys. We did a lot of work to make the responding process, by paper or mail, easier. We had a toll-free fax number, a prepaid envelope. We did everything to help a customer to respond, yet we still did not get high response rates."

Low response rates fuel dealer perceptions that the paper surveys aren’t representative, a belief that’s voiced especially if the dealership scores poorly. Phone research nullifies those criticisms. "Car dealers are as skeptical as anyone in retailing," Tate says. "If the mail results weren’t to their liking they’d say that we used a bad sample. With the telephone, we have a census; we’re not just getting responses from the really angry or the really happy customers. With the phone research, we can say to the dealers, these are the voices of your customers telling you what you’re doing right and what you’re doing wrong so let’s talk about your processes and not the sample."

Similar goals

While each manufacturer has its telephone research program tailored to its own needs, the customer interviews have similar goals, says Rich Hebert, president and CEO, Sky Alland Marketing. "All the companies view intimacy with the customer as central to their brand-building strategies and they view us as an extension of their marketing effort."

Tate says that the personal contact offered by a telephone interview fits well into Volkswagen’s approach to reaching its prime market - younger, upscale, well-educated car buyers. "What’s important to them is the whole sense of connectivity. In that respect, the telephone interviews show them that we’re interested in creating a dialog around the sales and service experiences. That gives us a chance to position Volkswagen as different than other car makers."

For a typical interview, which lasts just a few minutes, the Sky Alland representative identifies himself or herself as calling on behalf of the car manufacturer. Customers are thanked for their business, whether it’s a car purchase or a visit to the dealer’s service department and asked if they were satisfied with their interaction with the dealer. "We always begin with a question that gets top-of-mind responses because that’s the most genuine, reliable, actionable and quantifiable information," Hebert says.

From there, customers respond to rating and open-end questions on a variety of service and satisfaction related attributes. "In many cases we ask if the staff expressed appreciation for the customer’s business," Hebert says. "We’re finding that that’s a very important element: Does the marketer demonstrate genuine appreciation for the customer?"

Dealers are notified, usually within 24 hours, of customers who have serious complaints and who wish to be contacted to discuss the matter. For example, interviewers ask Mitsubishi customers who answer negatively on any question if they want to explain what happened, Girard says. "If they say yes, the interviewer will take down the verbatim and then we’ll ask if the customer would like the information forwarded to the dealer for follow up. If they say yes, we’ll send out a fax to the dealer within 24 hours."

Dealership management receives customized monthly reports for sales people and service advisors, those who usually have the most contact with the customers.

Post-warranty

Hebert says that while it’s important to talk to customers after a new car purchase, it’s even more crucial to talk to them during the post-warranty period, when they’re least loyal. "Service loyalty to the dealer is the greatest determinant of repurchase, so you have to stay close to the customers post-warranty, to make sure they’re coming back to your dealers."

In addition, improvements in car quality have lengthened service intervals, giving dealers fewer chances to interact with customers who come in for scheduled maintenance, Tate says. "It’s hard to measure how loyal your service customers are because if your cars are performing the way they were designed, you’re not going to be seeing the customers as often."

Though many factors influence satisfaction, in the auto industry, like any other service, it comes down to people, Hebert says. "The frontline personnel absolutely govern a consumer’s overall perception of the client and their willingness to go back and do more business with them. A frontline person can ruin a good product or overcome a bad one."

Positive measure

Cabanting stresses that a key to dealer buy-in is to not use the satisfaction measurement program as a form of organized punishment. "The biggest challenge is getting the dealers to see it as a positive measure. Some dealers are worried that the manufacturer will use it as a weapon instead of a management tool to give them insight on their business practices and how their staff is treating customers. Once they realize that you are sincere in using it as a positive tool, then some of the apprehension goes away."

For example, in addition to acting on customer complaints uncovered by the research, Porsche also celebrates success stories. When dealer staffers are singled out by customers for delivering excellent service, Porsche presents them with an award and features them in the company newsletter.

Some dealers can get possessive of their customers and worry that the manufacturer will use the research to drive a wedge between the dealership and the customer, Cabanting says. "You have to show the dealers that it’s not an us-versus-them situation; the dealer and the manufacturer are a partnership. The marque itself can be tarnished by unsatisfactory sales or service experiences, just as the dealer can, so we have to have a strong partnership to make sure that our mutual customers are satisfied."

Clear hurdle

Another hurdle manufacturers must clear, says Volkswagen’s Joe Tate, is dealer skepticism toward the value of satisfaction improvement efforts. "Too often, investments in customer satisfaction are viewed as soft investments; you really can’t measure the results of improving it. To a degree it’s like advertising. To paraphrase the famous quote, you know about only half of it is effective but you don’t know which half. Some of those same emotions surround customer satisfaction. So we wanted to position it as a business result and show them that if they make the investment there are hard results."

Once that leap of faith is made, dealers then want to know exactly when to expect the payoff. "As much as I try to stress the long-term, there are questions like, how long do you have to wait for loyalty to appear? Most car buyers are still financing for four years and they don’t have a chance to display loyal behavior until it’s time to buy another car," Tate says.

"Car dealers - and the industry has created this situation, because we report sales figures so frequently - are not conditioned to think more than 10 days or 30 days in advance. We’re trying to get them to think of share of market or share of customer, and think of the person who will come back and buy three or four more Volkswagens over his car buying life, but they’re thinking about the next guy coming through the door.

"We try to tell them that any return that comes from good customer treatment comes for free, because the dealership has already made an investment in its people and its processes, so there’s no additional investment necessary. The only thing you have to be sure of is that the processes are performing the way they’re designed to. That gives the dealer another way of looking at it: If I hire good people and my processes are sound I should have a good chance at fostering customer loyalty."

Rapid improvements

All of these satisfaction efforts are paying off, Hebert says. "Through the satisfaction programs we conduct for automotive clients, we’ve seen rapid improvements in the quality of service they’re providing. The companies that are expending serious efforts and serious money are seeing tangible improvements in customer satisfaction and customer loyalty.

"A lot of our work involves actively trying to generate loyalty. The manufacturers recognize the connection between satisfaction and loyalty. They also understand that top box satisfaction is the only way to build loyalty. It’s not a guarantee but without it you have no shot."

"Everybody wants to measure customer satisfaction," says Mitsubishi’s Dan Girard. "But measuring it won’t guarantee future loyalty. If you don’t have customer satisfaction in this business you’ll never have customer loyalty."

Tate says that third-party measures show that Volkswagen is doing significantly better as a result of the Sky Alland telephone process. "From a day-to-day monitoring of the activity that comes through our customer relations lines and through the mail, the trends are positive. Some of that comes from better cars but it’s also a much better car buying and owning experience."