Surveys of new car buyers show that inconsistent customer service in car dealerships has a negative effect on brand loyalty, particular when car owners are asked to pay premium prices. But customer satisfaction is increasingly determining market share and brand growth. This means that car makers that continue to focus their innovation efforts on R&D and production efficiency risk falling behind. Conversely, by ensuring that they provide consistently excellent customer service in car dealerships, car makers can become better at retaining existing customers and attracting new ones.
Giving as much importance to customer service as R&D and production means learning from industries where strong customer service is already ingrained. McDonald’s® is a perfect example of a business that benefits by providing consistently high levels of customer service.
Choose local car dealerships carefully and make a long-term commitment
Only 1% of McDonald’s® franchisee applicants succeed in the selection process but their franchise agreement lasts for 20 years. Through our work with a fast-growing car maker – for which we improved customer satisfaction, set standards for all interactions with customers and trained dealer staff in nine regions including Europe, Russia, India and China – we found that car makers should select local dealer partners just as carefully. The dealer leadership team must be committed to providing superior customer service, living the brand values, and having the right knowledge and skills to develop the business locally. Once the right partner is selected, both sides should make a long-term commitment, clearly defining the strategic roles and responsibilities of franchisor and franchisee.
Treat dealers as partners
The franchising relationship makes it almost impossible for the franchisor to make healthy returns from an unhappy franchisee, so McDonald’s® supports its franchisees as partners while holding them accountable for performance. Franchisees have their own communication network and can influence how the business is run locally. Instead of a traditional top-down approach, we have found that car makers should likewise treat dealers as partners with a role to play for each party – with the company providing strategic and operational support and the dealer delivering performance and innovation.
Define customer service processes in detail
Consistency helps maintain a strong brand while improving efficiency. This is why McDonald’s® defines processes in detail and then offers considerable support for new process roll-out, using key performance indicators to track compliance. In the same way, defining and standardising processes so all sales and after-sales customer contacts aim for high customer satisfaction helps car makers achieve the same standards.
Provide the right incentives for dealership staff
As organisations that provide modest salaries, McDonald’s® and other service companies need to develop other incentives for operational staff. These include encouraging teamwork and creating an enjoyable working environment, empowering staff to increase earnings through their own efforts, investing heavily and openly in training, and documenting skills that employees can take with them into other markets. Car makers should hire staff with experience in service industries and provide intensive and regular training for all customer-facing staff in sales and customer service. Systematic training on how to satisfy customers is as important as technical and commercial training.
Give dealers the freedom to innovate
The McDonald’s® ‘freedom within the frame’ concept means that innovation is not restricted to the centre; franchisees are also expected to innovate. We have found that car makers should also give dealers freedom to develop the local market within the framework of corporate strategy; allowing and asking local partners to develop new ways of improving customer service, supporting best practice exchanges throughout the network, and terminating contracts with consistent underperformers.
To find out more about achieving better customer service in automotive sales, please contact us now.