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A Wall
Street Journal poll conducted a few years ago found that
68% of customers abandon their suppliers because the employee
who took care of them seemed indifferent.
Imagine
if one of the respondents was thinking of one of your employees
when he or she answered the poll. Did your dealership lose
that customer to a competitor?
It is
absolutely imperative that dealerships measure customer satisfaction
and loyalty each month. And it's not that difficult. Here's
how.
Each month,
run a report that lists in alphabetical order the customers
who bought parts from the dealership in the previous month
and year-to-date. If you computer system can't generate such
a report, find a way to get it to.
Start
out by running the report for all parts purchased during the
2002 calendar year. (If your system needs to use a fiscal
year, run the most recent fiscal year-end report.) Then run
a report just for the month of January.
Then get
yourself two different-colored felt pens. Go down the January
report, noting each customer who bought in January but not
in December. On the year-end report, mark off each customer
who bought something in 2002 but not in January 2003.
The customers
who didn't buy anything in January are potential defectors.
The customers who did are new business.
Calculate
defections and acquisitions by adding up the customers marked
in one report or the other and dividing that total by the
total number of the dealership's customers. Do this once for
each of the dealership's major sales: parts, service and rentals.
(Equipment sales are too spotty to use this method.)
Easier
than you thought it'd be, isn't it?
Customer
satisfaction comes from providing service value, and this
is where the rubber meets the road. Service value comes from
satisfied and loyal employees.
Satisfied
employees are trained on the dealership's services as well
as its products' features and benefits. They understand what
all this means to machine operations. They know the dealership's
marketplace and the products and services its competitors
offer. They know how to use the company's computer system.
And they've received sales training.
In The
Discipline of Market Leaders, authors Michael Treacy and
Fred Wiersema point out three main areas of consideration:
- Operational
excellence: offering attractive pricing as well as convenience
and reliability.
- Product
excellence: the result of product performance superiority.
- Customer
intimacy: the use of "micromarketing" to cover
finer market segments.
- Reliability:
the ability to deliver, accurately and consistently,
on what was promised to the customer.
- Responsiveness:
the drive to help customers promptly.
- Assurance:
the knowledge, competence and confidence that your employees
display.
- Empathy:
the degree of caring and individual attention shown to customers.
- Tangibles:
the appearance of such physical assets as your employees,
facilities and property.
I've put
these points into terms more appropriate for equipment distribution.
These five areas measure all of the critical elements that
lead to customer satisfaction and loyalty. Each can be objectively
measured. Corrective action, if necessary, can be taken.
More important,
they all address the customer's impressions of your business.
In AED's
Product Support Opportunities Handbook, which was released
last year, contractors pointed out time and again that convenience,
responsiveness and availability are the most important considerations
in selecting a supplier.
How does
your dealership measure up? Check out your retention and acquisition
statistics. Measure it monthly in parts. That's how you'll
learn what you have to do to improve business.
It's not
complicated, but it is critical. If you don't act, there are
plenty of competitors out there waiting for your customers
to defect so they can show them what they were missing by
doing business with you. Not a good situation to be left in,
if you ask me.
To learn
more, check out the offerings from Quest, Learning Centers.
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