Lessons to be learned from a car dealership.

Last month we explored customer retention and the impact it has on profitability. We showed the frightening prospect of your customers leaving you to go somewhere else, a defection rate of 15% on your future. That left you with nearly 50% of your customers still with you after five years.

We all admit there are instances where we make mistakes and cause problems for our customers. I understand we don’t want to make mistakes and we do everything in our power to avoid them, but let’s face it, we don’t succeed 100% of the time. We make mistakes.

I believe how we handle mistakes or problems and recover from them is one of the critical few things we do. I believe your customer also understands that mistakes will be made, but that how you respond will make a more lasting impression than the mistake that caused the problem in the first place.

I told you last month about Carl Sewell who operates a car dealership in Dallas, Texas. He is known, among other things, as the father of the Customer Service Index. He created it and operated his own “CSI” until the industry caught up with him. He also had time to author the innovative book, Customers for Life. He lives the customer retention mantra and believes it is more the service department than the sales department that creates the bonding with customers.

Yet there will be difficulties, no matter how skilled your employees are and how effective your systems and processes may be. You will need to be able to recover from your mistakes every now and then.

Taking Cues from a Car Dealership

For this recovery process, let’s review some of the things dealing with a car dealership has taught us.

How often have you gone to a car or truck dealer to have your vehicle maintained or repaired? Did you make an appointment? Did you receive an e-mail notification of an upcoming service requirement or product recall?

Right there is where many of us begin to see how our businesses are different. We simply don’t communicate as often or as effectively with our customers as we should or we could. How often do you communicate with your customers? Do you have their e-mail addresses? This is a different world we live in than the world of our parents. We have to adapt ourselves to the world of our children.

Have you noticed when you arrive at the dealership how you are approached by a service writer? A pleasant and professional individual who will welcome you and begin a dialogue about what you would like to have done on your vehicle. It’s almost as if they are creating a personalized service just for you. After all, you decided to come to them to get something done.

This example might leave many of you thinking it doesn’t apply to your business. In some cases, I will be the first one to agree with you. If that is the case, you will have to find the point in the relationship you have with your customers where you can create a similar experience for them.

Here is where the conditioning starts. Your goal should be like that of a car dealership: “We want to ensure that we provide you 100% satisfaction and so please let us know if there is anything we did that doesn’t stand up to that 100% satisfaction test.”

The visit to service your vehicle continues with the service department doing the work necessary as a result of the “interview” with you on your vehicle. Once the work is complete, they again engage with you and tell you they want to know if there was anything that didn’t meet your complete satisfaction.

And then afterward you will receive a call from the service manager repeating the 100% satisfaction goal. But this time there is a difference. This time you will be told that a call will come from the dealership manufacturer who will be checking to see how the dealer did in their job of keeping you happy. Do you communicate with your customers in any manner similar to this?

Responding to Problems

Let’s explore how the car dealership handles a problem. Perhaps they took too long to do the job. Perhaps they didn’t have the parts they needed. Perhaps they forgot to open a segment of work that you wanted in the “interview” stage. How they respond in those instances is the critical response I’m talking about that makes all the difference. How you perform in recovering from a mistake or problem is almost more important than doing things properly to start with.

In management training, I suggest that you ask the customer what it is they would want done to make them happy. We need to have the customer happy with their suppliers and satisfied with their choices of suppliers.

So what would it take to get past a problem? This is what has to be done. I submit to you that no matter the cost, whatever the customer wants to make them happy—you give it to them. The cost of the lost customer will far exceed whatever the cost is to fix the current problem. Too often we get into a mode of confrontation. We did it right, what is wrong? We bow our necks and get stubborn. This is not in any situation the right thing to do.

The approach you take when there is a problem will go a long way to proving to your customers that you care. They will brag about your solution to their friends and neighbors for years to come. Don’t you want to have satisfied customers brag about you rather than disgruntled ones? I thought so.

Enjoy your holidays and refresh and recharge your batteries. I do wish you and your families all the best for 2012. See you next year.

by Ron Slee
December, 2011
Water Well Journal

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The Water Well Journal is the leading resource for those working in the groundwater industry. The flagship publication of the National Ground Water Association is delivered to more than 24,000 people every month and covers technical issues related to drilling and pump installation, rig maintenance, business management, well rehabilitation, water treatment, and more.

Since many of the companies in the groundwater industry are small family-run businesses it is critical that Water Well Journal provide much more than technical content. That is why Ron Slee’s monthly columns addressing management, supply, and inventory issues are valuable. It is that type of information that helps the publication achieve NGWA’s mission of advancing groundwater knowledge.