Why wait for the next customer service index scores from your OEM? Take action now. This series of columns goes through the development stages for a dealership purchased by its general manager. The previous owner did not read his CSI reports until months after receiving them. We reviewed several years' worth of these reports and learned that the majority of the staff never saw the poor results. We implemented several changes. The following is an overview of what we told the new owner and his staff.
Increased guest satisfaction is linked to less staff turnover, reduced marketing costs (by lowering the cost per sale), and increased profits. Numerous studies show that it costs seven to 12 times more to attract a new guest than to retain an existing one. Thus, each guest is worth more than any single transaction. Now more than ever we cannot afford to lose anybody. High guest retention also means more referrals, the least-expensive form of marketing.
CSI reports play a major role in the future of new products and services. Years of tracking has formed precise knowledge of guests' buying habits and their expectations. Dealers must utilize all information to enhance their sales and capture higher profits.
More repeat business is yet another benefit. Satisfied guests return for additional units. They visit you more and spend more. They also bring their friends. With our client store, we noticed a higher closing ratio after just a few months.
How to Improve
Effective customer service entails immediately responding to your guests' needs. Exceed expectations every time you make contact. This helps to capture their loyalty, then to maintain or improve it.
Treat every sale in every department as if it were the first time your guest has purchased from you. And don't forget the first impression your staff is making on your phones and computers. Your staff should respond quickly to e-mails and voice mails.
When you fail to meet a guest's expectations, make good immediately. View complaints as a business opportunity.
Offer products customers want. Track all purchases and review them every 90 days. Make this a duty of every department manager. Track the stuff bought by repeat customers. Create a list of your best guests and calculate what percentage of guests generate the highest profit margins. Review the way you treat them, and ask what you could do to assist them better. Then track your success.
Establish a buying committee. Even if you have set budgets for each department, because guests shop the entire store, your departments should make buying decisions together. This enables all staff to find "new revenue" from the existing guest base. Order products requested by guests before considering staff recommendations.
When it comes to monitoring your staff's performance, don't get trapped in "How'd we do last month?" Don't review just monthly; review daily. Establish benchmarks, and continually raise the bar. If you don't, a competitor will.
Track guest defection. On average, dealerships lose between 20 percent to 30 percent per year. Ask yourself how accurate your guest list is (monitor it daily). Audit your guest information for accuracy, and strive to add to your database every person who visits your store.
Monitor every contact your store has with a guest, and constantly strive to improve with every guest. All departments must adopt this philosophy. The value of measuring guest satisfaction is immense. Without measuring, you can't manage.
Remember, the primary goal of guest satisfaction is guest loyalty. Turn prospects into guests, guests into confirmed repeat guests, and repeat guests into promoters of your store.
Steven Zarwell is a renowned retail consultant for powersports dealers and is a member of the Dealernews editorial advisory board. Reach him at email@example.com.