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When I was in fourth grade, one substitute teacher asked the class, "if you owned a store, what could you do to give your customers really good service?"

"Free ice cream!" One kid yelled out. Great idea, I thought.  Apparently this was not the answer she was looking for though.

"No, no no," she said. "You can't give anything away for free." This clearly made the exercise more difficult. 

"Free--ah, uh...oh," stammered another kid.  And that was that. As fourth graders, we couldn't get past "free" to differentiate ourselves. 

It's still true today, isn't it? Too often we get stuck thinking if we give away enough stuff to customers, we're giving them good service and differentiating ourselves from the competition. The trouble is, our competitors can easily, match, beat or clone our value proposition.

Consider a typical owner loyalty program. Someone buys a vehicle from a dealership, and they may get free car washes with service, free loaners, and free Internet and coffee in the waiting lounge. 

So what? The dealership down the street is giving me the same thing, whether I've purchased my vehicle from them or not.

So, what's your opinion? What is the great Differentiator? Hw do we give customers great service, and keep customers coming back to MY dealership?

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Hi Paul,

 

I have always preached that the only difference between my dealership and the one down the street is me!  Transfer that logic from me to the sales consultant and I will make my point.

 

People buy from people that they like with product and price taking a back seat.  Of course they are along for the ride but the personality of the driver determines the course, speed and wether or not we get to our final destination in one piece.

 

That said, a pretty face or a great personality without any substance may make a friend vs. a customer! The secret to success lies in having a sales team made up of individuals with the proper training, process and support to earn the trust and confidence of customers to help them buy a vehicle vs. selling them one.  A self serving agenda on the sales consultant's part will be discovered the moment that they advise their "customer" to do something that they wouldn't suggest to their "friend."

 

In order for a dealership to develop this unique differentiator they must prioritise employee satisfaction and retention before they can presume to apply that focus to their customers.  Morale at a dealership is a critical differentiator that is built on the foundation of a good hiring, training and management process that includes performance based compensation plans and policies and procedures that make it fun for the sales consultants to make a living in an environment that makes it just as much fun for the customer to help them do it!

 

As long as the dealership presents that image on the street in their advertising and reputation and maintains it on their showroom floor the competition will always be missing one thing -- YOU!

 

After all, what are friends for!   

Philip Zelinger's response says it perfectly, and gets right at the heart of what this is really about: loyalty.  And loyalty is about building relationships with customers, not just having the best deal at the time. 

 

I mentioned Seth Godin's article on Loyalty in a recent blog entry.  He sums up the issue in a way that I think is true across all industries.

Yes, it is about Loyalty.  BUt forgive me while I needle a little bit more.

 

Phillip, the difference between one dealership and a dealership down the street is you (me), but what if you leave and go down the street?  Will dealership A be able to retain a customer that you originally helped, or will that customer "attrit" (leave) with you? 

 

After all, I contend that the customer is the Dealership (Principle)'s customer, not your customer. 

 

Don't get me wrong, I am a huge proponent of Employee Retention, and believe that's exactly where Customer Loyalty begins.  However, employee attrition is a fact of life, and dealerships often have employee turnover rates as high as 100% (if this is the case, chances are their customer loyalty is pretty low too, so I get it).

 

Nevertheless, how does a dealership keep loyal customers in the face of employee attrition?  I know a guys who have hundreds of customers (maybe thousands) in their file drawer, away from the Dealer Group.  Technically, those files are the dealership's, right? If that employee leaves, ethically he shouldn't take those files off the property.  If he goes to a new dealership, what strategies should the first dealership employ to keep those customers loyal to the dealership (not the previous employee)?

 

Paul,

No needles involved since you raise an excellent qualifier to building value in the sales consultant. However, the same conditions I propose suggest that they won't have a reason to go down the street. 

That aside, note that I referenced hiring, training, management and PROCESSES as well as performance based compensation plans as part of my suggested differentiators.  Any of these elements will protect the dealership from the loss of a sales consultant.

Managers that inspect what they expect in their sale and follow up processes including T.O. procedures to introduce customers to sales as well as service managers and other dealership personnel from the operator to the cashier will develop a support "team" that will survive the sales consultant.  Also, compensation plans that include a vested interest in the dealership ranging from annual employee retention programs, holiday bonuses and funded 401 K programs can induce a sales person to stay vs. walking away from their accrued investment at the dealership.

Personalized messages from the dealer and key managers sourced from a comprehensive data base with instant triggers to find and focus on "orphan owners" assigned to a sales consultant when one leaves is just one of many techniques that a well organized dealer can deploy to protect their interests.  I mention these in specific because I absolutely agree that the customer belongs to the dealer since he wrote the check to get them in and he paid the sales consultant based on specific performance and any attempts to "steal" the dealer's assets should be considered theft.

Philip, all that is great stuff. What you described is exactly what companies need to deploy to keep good employees.

Ok, but I want to shift gears, because let's assume that Dealerships and Dealer Groups have built these (we're a far way off, no doubt) What MARKETING programs can differentiate one dealership from another?

All things being equal (great people, great processes, etc.), what brand initiatives are the Great Differentiator?

I think that I agree for the most part with the other responses, however, I believe that it is the PEOPLE that make the biggest difference... Where my opinion goes astray of most people's thoughts on this is that i believe that the way people in your dealership impact customer loyalty is less related to who you hire and more determined by their training and how they are empowered to resolve customer concern issues... As well as reward their most loyal or whoever they determine to be ther "Best Customers". 

 

For 3 years I managed the CSI and Customer Loyalty initiatives at Courtesy Chevrolet in Phoenix and I learned at that time the importance of empowering the dealershi's staff to resolve customer concerns swiftly and without the need to get a "Manager's" approval.

Lisa, can you define "customer concerns?" I ask because I am interested to hear about proactive strategies to increase customer loyalty, not reactive tactics to resolve customer complaints. Thanks!

There needs to be something at the dealer level that the dealer offers to the buyer (or other customers) as an incentive/reward for doing business with that dealer. 

 

The offer needs to be delivered through a program where the program itself is designed to support customer loyalty through participation and further promoted through the various social media utilities. 

 

Further, the solution needs to be exclusive to the dealer or dealer group (in the case of a dealer with multiple brands).  It also needs to be something that is completely unique to the marketplace and something that is not easily replicated by other dealers in the same service area.

 

Finally, the solution needs to be something where the dealer can position themselves as serving the local community above and beyond their car buying needs.  Something that is once-in-a lifetime and benefits the car buyer, their family and the public at large.

 

A program like this, offers local and regional differentiation, creates positive word of mouth and goodwill and allows the dealer to leverage Social Media and other outreach programs very effectively.

 

And it should be fun for everyone involved! 

 

T.Marc Jones

T. Marc, that is a great summary!  Yes, it's about the people, yes it's about training them properly, and yes it's about the tools we give our people to help Differentiate the organization from it's competition.

 

I wrote a Blog several years back called "The Customer is Always Tight", which I discuss how dealers can differentiate themselves from their competition by embracing a customer's "tightness", and building a branded loyalty program that is not a easily replicated.

 

I really appreciate how concisely you explained this, T. Marc. I may have to quote you in my next eNewsletter!

 

I would like to hear what specific types of benefits anyone would recommend, or have seen, that differentiate a dealer from its competition, like free oil changes, car washes, discounts at area merchants, points toward future dealership purchased, etc.

 

Any thoughts?

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