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Jared Hamilton
From: Jared Hamilton
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Jared Hamilton

Jared Hamilton Founder - CEO

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Is it time for the industry to dump CSI?

I personally believe CSI is a waste of time.

We all know of dealers who bend the CSI rules in various ways... heck, i bet we could even debate right here what cheating on CSI actually is.  Everyone seems to have a different belief on what is acceptable in encouraging, requesting, or flat out incentivizing customers to give positive scores.  All it takes is one dealership to work the system and the data set is ruined.  Until scores are collected in a more uniform and verified manner, the information will remain tainted.

Unfortunately, dealers must “encourage” customers to submit positive surveys because there is simply too much pressure from OEMs who use CSI for ranking and rewarding stores that dealers cannot afford to let natural results come in.  Face it, CSI is not about measuring customer satisfaction, its about keeping in good political graces with your manufacturer.

Sure OEMs have written rules, outlined consequences and published memos about what is and isn’t acceptable in encouraging customers to return the surveys, but little if anything is done to police or verify the submissions.  Who wants to be the zone manager that enforces the rules only to see their zone numbers tank?  As long as there is false market pressure on “good CSI” and creating real customer loyalty is not the primary reward dealers will shortcut the system resulting in bad data and CSI will continue to be a waste of everyone's time.

The irony of CSI is that if the scores were actually indicative of success I guarantee that dealers would naturally monitor and improve them without encouragement.  The fact that OEMs need to incentivize dealers means there is not enough correlation between good CSI and a dealership’s success.  Either the system doesn’t work and there isn’t a correlation between good CSI and customer loyalty, or OEM involvement has screwed the whole thing up by placing false incentive in the wrong place.  Either way, the system needs to be corrected because its a big resource drain for the industry and those resources could be productively invested elsewhere.

CSI needs to have a greater impact on the market.
Im not convinced that today’s CSI scores, even if they were collected accurately, have enough impact on the market to merit a dealerships full attention.  Rather than start solving the CSI problem with correcting where we put incentives, what if we first put more weight in the market behind the scores by making them public?

If CSI data were accurate, and it could be if the survey collection process changed, OEMs could publish CSI in real time like an online reviews. Yesterday’s CSI is designed to just measure what customers are thinking, but today’s systems in the social web do that so much better and include the added bonus of swaying customers decisions.  Today’s CSI scores should be an aggregate of a variety of verified online review sources.

If we want CSI to matter more, let the market see it.  The correlation between good scores and customer loyalty will strengthen and provide natural incentive for customer satisfaction to increase.  Furthermore, tracking customer sentiment on the web, through a variety of social applications could be a much better indicator of CSI than the narrow view a survey provides.  Our current CSI survey system is so out dated its like trying to use morris code to communicate with an iphone user.  CSI systems need to get with the times. The transparency and effectiveness of the social web is powerful.  Our industry needs to embrace it, after all it has already rendered our current CSI system obsolete.

Move the incentive to the right place.
Once we have tapped into the power of the social web, aggregated a reputation score from a variety of verified sources, and shared internal scores with the market so the scores actually meant something, we would need to completely remove the old incentive structure and focus where our attention should be.

I believe OEMs should remove all incentives and payouts that dealerships earn through good CSI and pay it to dealers who create customer loyalty.  Rather than compare dealerships based on CSI survey results, they should compare dealerships on their ability to retain customers over the years. If the theory is that good customer satisfaction creates customer loyalty, and OEMs want to help dealers create and correlate the loyalty why don’t they put extra dealer cash or another incentive for repeat customers of a dealership? I think this could be more effective because it would force the dealers to EARN loyalty through customer relations.  Unlike a CSI score, you cant really cheat creating repeat business and if you could, bravo, what is the worst that happens? You sell more cars?  We have confused the end with the means and need to refocus on what we really want to accomplish. CSI means nothing if it doesn’t create loyalty.

Making CSI a contest between dealers, and adding big rewards to those dealers who score the best in CSI creates a false goal that is achieved through gaming the system.  If the refocused on selling repeat business, it would solve a lot of problems and remind us why we really track CSI to begin with.

How would you make CSI better?
When it comes to CSI we are like a dog chasing its tail thinking we are actually hunting something worth while.  Like I said earlier, I believe our current CSI system is a waste of time. The best thing manufacturers could do with their CSI surveys is throw them out and start over focusing on the social web then incentivize dealers to create loyalty, not game survey results.  

Im surprised that as an industry we are not more vocal about the lame CSI system that is in place.  Do you feel it benefit's you or is it just a political game that wastes your time?  How would you make CSI better or do you not mind the political tail chasing?




Jared Hamilton
Sorry joe. The other day when I was reading your mind I got so excited about stealing your idea for a blog post that I stopped reading your mind to start writing before I got to the part where you would have told me to let you write the post. Next time I read your mind ill be sure to keep your thoughts to myself. :-) ON another note... hows the new baby doing at home? Have you trained him to respond to leads yet? Keep up with the killer job at the Chrysler meetings, Ive heard good things from a couple dealers.
Joe Webb
It's my fault. I should have written it the moment I thought of it. I should have known you'd beat me to the punch again. The baby is great. Thanks for asking. And yes, the Chrysler meetings are going well. A lot of fun and interesting to see each dealership around the nation having the same problems. Shaun Raines and I are road tripping between each venue and are live streaming are off-the-wall conversations and arguments in the car. It isn't worthy of DSTV, but it is entertaining nonetheless hearing two guys chat about life, movies, music, industry, relationships, kids, food, etc.
Tony Rhoades
Jared you nailed it. The incentive must be moved to the right place. Measuring CSI is a lot like measuring response time. It is an important part of the process but not really worthy of monetary incentives. Incentivize a system which can be worked, it will be. Since CSI is measured to "provide a leading indicator of consumer purchase intentions and loyalty" it makes perfect sense to focus incentives on the desired result. I agree, If the factories actually focused their efforts and incentives on the percentage of repeat business experienced by dealers we would then be focused on a tangible measure that is not easily biased. As a result, everyone would win. That is everyone except dealers which don't care if they never see the customer again. Keep measuring CSI for the leading indicator it is, but focus on how many customer's actually remain loyal to the dealer and pay incentives to actually sell cars.
Jared Hamilton
Thank tony. Another simple way of rewarding loyalty would simply be to put dealer cash on repeat business. What if each deal from a verified repeat customer, who purchased from your dealership within the past three years, got an extra $500 dealer cash? Would that work. Here is another thought? Should we pay salespeople a bonus, or have part of their pay tied to creating repeat business? I think it would be one of the best bonuses a dealership could pay out. What do you think?
Daniel Boismier
I wanted to mention that last Friday I met with our Subaru rep and they were both aware and concerned with our online reviews and Google places. I know the Ford and GM Internet training arm also undertstands this, but this was the first time for me that a factory rep was mentioning it.

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