PA’s Alex Davison, automotive expert, has had a byline article published which explains how car companies can attract new customers by ensuring that dealerships provide consistently excellent customer service.
Alex describes how innovation in the automotive industry has traditionally meant investing in R&D and making production processes more efficient – but a shift in mind-set is required.
Today, market share will increasingly be determined by customer satisfaction. The article argues that by ensuring car dealerships provide consistently excellent customer service, automotive companies can get better at retaining existing customers and attracting new ones.
According to Alex, moving to a customer-service-centred approach means learning from industries where strong customer service is already ingrained. McDonald’s® is a perfect example of a business that has succeeded by providing consistently high levels of customer service.
Alex goes on to explain that, in order to succeed car companies must:
Make a long-term commitment with carefully chosen local dealers – the dealer leadership team must provide superior customer service, live the brand values, and have 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 franchisor cannot make healthy returns from an unhappy franchisee. Franchisees should be able to influence how the business is run locally. Instead of a traditional top-down approach, car makers should treat dealers as partners. There is a role to play for both the company in providing strategic and operational support and for the dealer in delivering performance and innovation.
Define processes in detail – consistency helps to 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. Similarly, defining and standardising processes so all sales and after-sales customer contact aims for high customer satisfaction can help car makers to achieve the same standards.
Provide the right incentives for staff – as salaries are modest, service companies need to develop other incentives for operational staff; for example a strong culture of teamwork, an enjoyable working environment, performance-based pay rises, and training and skills development. Car dealers should hire staff with experience in service industries and provide regular and intensive training for all customer-facing staff in sales and service.
Give dealers the freedom to innovate – the McDonald's® ‘freedom within the frame’ concept does not restrict innovation to the centre; franchisees are also expected to innovate. Car makers should give dealers freedom to develop the local market within the corporate strategy; allowing and asking local partners to develop new ways of improving customer service and supporting best practice exchanges.
Through following these principles, car dealers can find what they are looking for – a fair and sustainably profitable partnership between car maker and local points of sale.
Alex Davison, automotive expert at PA Consulting Group