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When Performance is Measured, Performance Improves.

So, What Can You Do to Survive in a Collapsing Customer Pay Parts Market? – Part 3

We should really call this “one last thing.” The purpose of this, and the prior two blogs, is to give retailers some ideas for improving back-end profitability, now, that do not require hiring expensive consultants or waiting for their respective OEMs to encourage them with more hand-holding and payment for performance. These ideas are easy to understand and easy to implement.

The “one last thing” is simply a number – 15%.

 It is derived from a customer survey that correlated dealer service customer satisfaction with their intent to remain loyal – “dealer service repurchase likelihood.” It is easy to see from this chart that “very satisfied” service customers are much more likely to remain loyal than are merely “satisfied” customers. Using conservative estimates for translating “likelihood” into actual repurchase loyalty, we come up with the “15%” I just mentioned.

Timeout: In plain English, a very satisfied customer is 15% more loyal than a merely satisfied customer. In even plainer English, a very satisfied customer will, for all practical purposes, remain loyal and “your” customer for as long as you continue to make him/her “very satisfied.” Once you slip and deliver merely “good” service, not “great” service, there is a chance that the customer will defect. Call it a 15% chance. That’s a roughly right number.

Now, imagine if you knew, at the precise point of deflection, when a customer was about to become merely satisfied? Like one of those Fox time-machine TV shows, where “Hiro” Nakamura can go back in time and fix things that got screwed up. Here’s the script:

Mary Doe: “Hi! You said to come back at 2pm so here I am. Where’s my car?”

“Hiro” as Service Advisor: (Smiles and is thinking; background thinking-voice: “Well, that car’s no way near to being done … just didn’t get to it … crap, what do I say? … Do I tell her that the parts were really rusty and we are taking longer than we thought? … Oh, crap, I used that last time with what’s-her-name … Heck, I know that I can dance around this one and make her OK … but, she’s not going to be really happy … what do I do? The boss sent that blog around and making her just ‘OK’ will cut down on our revenues from what’s-her-name by 15% … heck, her car’s 4 years old and I’d expect about $1200 from her just in the next two years … so, I’m going to risk $180 on this screw-up! … What do I do? … What do I do?”

What does he do? It is easy. Hiro’s about to lose $180 for the dealer if he does not step up and make what’s-her-name very satisfied. What does he do? He goes back in time and does what it takes to make Mary very satisfied.

1. He calls her by name.

2. He’s already staggered appointment times to prevent things like this from happening.

3. He began the conversation when she brought the car in by making sure that all bulletins were discussed.

4. He spent some time with Mary on a visual inspection and strengthened their relationship.

5. He can make sure that all shuttle operators give her priority treatment.

6. If the shuttle isn’t appropriate he can get her into a loaner that is an upgrade to her car in the shop.

7. He gave Mary his cell phone number so she can call to get the status of her car.

8. He asked Mary how she wants to be communicated with – she prefers text messages and that’s OK.

9. He ironed out the process of how we can review the work being done with Mary so that it is easy, effective, and convenient.

10. Mary has a credit card on file – so, she’s on express check-out. Otherwise, …

11.…Mary can just settle up with Hiro.

12. He knows enough to book the next appointment right now and he can do it so that she feels like a very special customer.

13. We always wash the car – this time we will go the extra mile here to make it up to her.

What does he do? If Hiro did what he should have been doing, he simply tells her the truth. He tells her that they screwed up, that the repair flow got choked up, and that it won’t happen again. He tells her that he’s sorry. If she is a loyal customer who is treated like a valued customer, honesty will forge an even stronger relationship.

Bottom Line: The one last thing is 15%. I want you to see 15% of your revenue vaporize whenever a customer leaves your store merely satisfied. That’s a lot of money. That’s a lot of reason to change and improve. That’s why you do all the other stuff we talked about in the last few blogs.

Previously posted on “Spare Thoughts”;  By Carlisle & Company

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