I got a phone call today from one of our oldest customers. He fired us. After twenty years. He fired us. Said he didn't know us anymore. I think I know why. We used to do business with a handshake, face to face. "Now it's I'll get back to you later." Well, folks, some things gotta change. That's the reason we're gonna set out today with a face-to-face chat with every customer we have.

-United Airlines commercial

When a long term dealership customer stops doing business with you, when in effect she or he goes "inactive," it's an expensive loss. Many times these customers will never set foot in the dealership again. In terms of profit contribution, it is the long-term dealership customer who contributes most to a dealership's bottom line. When such a patron goes inactive- stops buying service, parts and perhaps vehicles from you- you lose a higher proportion of profit than when a first-time customer stops purchasing.

The loss of revenue is not a simple short-term loss. Your dealership forfeits future profit as well. For example, a grocery shopper who spends approximately $130 weekly on groceries for the family represents roughly $67,600 over a decade of purchases. The average lifetime value of a car buyer, excluding repairs, is around $150,000 or more. The customer and their future buying potential represent a powerful appreciating asset to any business entity. So when a customer stops buying, the loss is far greater than simply one missed purchase.

In Thriving on Chaos, author Tom Peters delivers the notion that, "the simple device, calculating the ten-year value of a customer can be very powerful." But losses are greater still. "When a customer leaves, you lose more than just the person's buying power", according to Griffin, J. (2002). Griffin considers that, "you also lose referrals and word-of-mouth advertising. If an auto dealer's customer sells just one friend on doing business with the dealership, that customer's value appreciates from $150,000 to $300,000. With tow referrals, the customer's value increases to $600,000."

The lesson here is simple: never before has it been more important to keep customers happy, solve the problems of those who aren't, and stay in touch- consistently using up to date technology to communicate with your dealership customer's the way they like to communicate. (Text, cellular phone, email, post-card, direct mail, face-to-face, face- book, etc).

Sobering, thought provoking, real life business dilemma or opportunity! What can and will you do to slow the leak and defeat customer loss in order to improve customer retention?

A Rockefeller Foundation study on lost customer found these reasons for customers defecting:

· Complaints were not handled (14%)

· The competition (9%)

· Relocation (9%)

· No special reason (68%)

Griffin, (2002) suggests that, "if you look past "no special reason," you'll usually find customer leaving because of benign neglect. (Italics added). As the United Airlines commercial points out, many customers leave because they feel no particular connection with your company. You failed to tell them that you cared. You failed to keep in touch. You took them for granted. The bottom line: you made it easy for them to walk away.

       1. Make It Easy for Customers to Give You Feedback

   Ask customers regularly about their most recent purchase or service experience. Did it meet their needs? Was it       what they expected? How could it be improved?

(Survey- whether in writing, e-mail, face to face, or by phone, a survey can be an excellent way to get customer feedback.) Real time web survey, newsletters, focus groups, user groups, advisory boards, voice mail-"Beef Box, Customer Hot-line for quick customer complaint follow up, electronic message board-). Be aware of your dealerships internet-cyber reputation, see if your dealership is mentioned on the DealerRater.com website or Yelp.com. Find out if something has been written; if such has taken place, respond to inaccurate or negative comments to set the story straight.

    2. When Dealership Customers Need Help, Provide It Quickly.

Once you get feedback from a customer, you must have the appropriate employee act quickly. If a customer calls with a complaint, respond immediately, preferably by fixing their trouble, but at least by affirming your intention to assist them as quickly as possible. If a customer has to contact the dealership more than once with a problem, they are much more likely to be dissatisfied, even if the second call results in a fix. This is one of the chief reasons for lower CSI scores even though the dealership fixed the problem.

    3. Reduce the Hassle of Repairs, Refunds, and Warranties.

"Repairs, refunds and warranties are often a source of frustration for customers" according to Griffin, J. (2002). From that viewpoint, it is easy to accept the fact that every automotive customer wants their maintenance or repair job done right the first time, and if it's not, discontent escalates.

Technicians should be trained and held accountable for inspecting their work by test driving vehicles to confirm repairs. Service consultants should be trained and held accountable for double checking and confirming that all repairs to vehicles are made correctly before placing the final call or texting the customer.

Double checking the technician's work to ensure quality repairs will immediately reduce the amount of shop comebacks. If a dealership has to fix the same job twice, perhaps the person who did the initial repair work should not get paid for the second repair unless there was an extenuating circumstance. This is always a hot topic in most dealerships, usually due to poor understanding and communication of the customer's concern. It is further complicated by inaccurate RO write up or a desk top diagnosis handed out by a Service Advisor or Manager.

    4. Learn How to Comfort an Angry Customer.

Most dealerships have not fully trained their personnel how to handle the angry customer. The factories provide elementary instruction on the subject, yet there is no real substance and functional preparation for this vital skill.

Griffin suggests that, "when you come into contact with a customer who is angry, handle the person with care. It may help to visualize the irate customer as having "psychological sunburn." If you touch them when the sunburn is at its worst, you may get a violent reaction. Help them to recover from the sunburn by reducing the "heat."

Give an angry customer relief by following these six steps:

  · Let the customer blow off steam-

  · Let the customer know you understand their problem-

  · Find out what the customer wants-

  · Suggest a solution on the basis of the customer's wishes

  · If the customer is not happy with your solution, ask what they would consider fair-

  · Make that dreaded follow-up call-

  Provide service to your dealership customer that is pleasant, productive and personalized; if you don't deliver, they'll    leave when they find they can get it elsewhere.

More about serving first and selling second in the next Dealership Coaching article for improved Fixed Operation Performance.

Bruce Molnar
Fixed Performance, Inc.

Source-

Griffin, J. (2002). Customer Loyalty. Customer Loss: How to Prevent It and What to Do When it Strikes (pp.173-185,218). San Francisco, CA: Wiley.