In Search of Happy Customers, Pt. 1
Customer satisfaction. It’s like the Holy Grail, isn’t it? Everybody wants it and searches diligently for it, but it can be elusive.
Many don’t understand the intrinsic value customer satisfaction has. Very few people in our industry are able to find it. I wish I could say it has gotten better over the past 25 years.
There’s clearly some renewed attention to this topic lately coming from manufacturers, dealers, industry associations and others. Perhaps there is some increased opportunity for positive change. Still, there seems to be a set of perennial roadblocks in the industry DNA that keep holding us back.
A Worthwhile Search
Without a doubt, pursuing happy customers is a worthwhile effort. Countless studies have proved the value of having customers who enjoy doing business with you.
The Loyalty Effect, as written and pioneered by author and consultant Fred Reichheld, proves that loyal customers cost less to acquire. That means, of course, advertising expense is less.
And those customers also have higher grosses on the deals you make with them. They are more willing to spend money with you and will pay a premium for that good relationship. They trust you.
And they cost less to maintain. Not just from maintaining the level of your customer base, but it also takes less money in terms of policy work or goodwill adjustments.
What Customer Satisfaction Looks Like
When it comes to customer satisfaction, what does it look like? If you could hold it in your hand, how would it appear?
Do you have a good working definition of it? How would you explain it to your employees? If you are putting forth your desire for customer satisfaction to your staff and don’t know exactly what it is, their performance will fall short.
The best working definition I’ve heard is this: “When a customer perceives their expectations have been met, they are satisfied.” I think you’d agree that seems quite reasonable. Basic. But it stops short of helping to reason out how to achieve it.
Where’s the ‘Wow?’
The idea of working under that definition of customer satisfaction won’t get your business where you want it to go. That’s only the “base level.” To set your business above the rest of the pack you will want to exceed any expectations.
Here’s the good news/bad news: Customers have been so regularly mistreated by our industry, generally speaking, that the bar for exceeding expectations isn’t very high. So, it shouldn’t take a lot of effort to outperform the competition.
Meeting Commitments Equals Happy Customers
If you are a business that does what it says it will do in the time frame that is agreed (I’m talking about your service shop here) you will surely delight your customers.
If you, as an OEM, can supply the correct repair parts to your dealers in less than a week, you will gain an economic advantage by reducing your salesforce. That is to say, the dealers will beat a path to your door. (Take notice that I didn’t launch into a rant about product quality here.)
Alternatively, if you run a business that allows retails sales to happen by quoting a low price – only to balloon it with added fees and add-on charges – you are not interested in building longterm relationships with your customers. You shouldn’t be surprised at the low number of repeat customers in your business.
Similarly, if you have a shop that doesn’t keep the customer updated on status and one that consistently makes excuses for longer repair cycles, don’t be surprised by a steady stream of “heat cases.”
Measuring Repair Times
One of the most encouraging initiatives I’ve recently seen is the focus repair event cycle time (RECT) is getting. It’s being discussed at conventions and meetings.
IDS has helped by developing a report on that system to track it. What it measures is simply how long it takes to push a unit through the shop. It’s a very good start and I’m glad to see the attention it is getting.
Still, it may be important to remember that RECT is a result or a symptom – not a cure. Identifying and correcting the causes of longer times are the prizes. The increased focus should help push some changes. OEM repair parts are the biggest culprit in extended RECT.