CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
I'd like to have a heart-to-heart with dealers and high-level managers at dealerships, because I am genuinely curious about something. You are all focused on customer loyalty these days, as you should be. It takes genuine effort to earn--and keep--a customer's loyalty. You implement best practices, train your employees, try to keep your employees happy and motivated so they'll provide great customer service, and you demand honesty and accountability when a customer is unhappy.
So why then, do you not demand the same amount of effort from your vendors to earn and keep your loyalty?
It seems to me that I hear dealers grumble about various vendors, products and services on a regular basis. Perhaps the product or service isn't right for them, or they're paying too much, or they have to sign a long-term contract they don't want to sign, or the vendor doesn't provide the level of customer service they want, or worst of all, they find out their vendor isn't being honest with them!
So why do you Mr. Dealer, when you have the ability to switch vendors, remain loyal to the vendor you have been complaining about? If a car shopper isn't happy with the experience of buying a car or getting their car serviced at your dealership, they will go somewhere else next time. And, if you, Mr. Dealer, aren't happy with value you are receiving from a specific vendor, then you should move to a different vendor. Your vendors should be working to earn your loyalty with every single transaction, every day.
I know what you're thinking. I've heard the objections before, but they really don't hold water:
Objection #1: I've been with (my current vendor) for so long, I owe them my loyalty.
Really? Since when does the amount of time you've been with a company have anything to do with how much loyalty you owe them? I've had a free personal checking account with the same bank for 20 years, but I assure you if they start charging me a $10 monthly checking fee, I'll leave and open a new account somewhere else in a heartbeat. Vendors should be trying to earn and keep your loyalty every day with every single transaction. Time has nothing to do with loyalty.
Objection #2: The process of vendor selection, implementing and learning a new technology or system is hard and time-consuming.
Yes, it is. If you recall, nobody wanted to move from typewriters to computers either, but they learned and eventually realized they couldn't get along without them. Every once in a while, leaving your comfort zone is required in order to achieve better results for your company. Learning anything new requires time and effort, but if and when you do finally find a great vendor with a product or service that meets your needs, along with great customer service, you will be thrilled. The effort is worth the reward.
Objection #3: My employees don't want to change.
Employees need to be involved in the change process as soon as possible. They aren’t so much against change as they are against being changed. Talk to your employees about the change and see what their objections might be. You will also need to ask employees for commitment. Once the change has been announced, it is important that you personally ask for each employee’s commitment to successfully implement the change. Once you are involved in the change you need to be committed and remain firm. It is of utmost importance that you see the change through to completion. Stopping it halfway through the process accomplishes two negative impacts. First, it destroys your credibility. Second, it tells every employee that if they take the stance of a dinosaur, this change, and possible all other changes you want to make, will pass by.
If you care about earning your own customers' loyalty, shouldn't you care about whether your vendors are trying to earn your loyalty? What are the attributes a vendor should have in order to earn your loyalty? Here are a few of my thoughts and recommendations:
1) Honesty. Do you have to review a vendor’s bill every month only to find that there is a mistake (and always in their favor)? Or when asking your vendor to resolve an issue or help you with a problem do they constantly refer to the contract you signed with them? A company should be honest and straight forward with you. You deserve it. You are the customer.
2) Great customer service. Your customers expect it, and YOU expect it in all other facets of your life. If you're paying good money for something, you expect the vendor will rapidly respond to your questions, concerns, complaints and suggestions. Perhaps it's because so many large tech companies don't even bother to give ANY customer service (i.e. Facebook and Twitter) that some companies seem to think it's not as important as it used to be. Yet, I guarantee the companies who do provide great customer service have higher customer retention rates.
3) Showing gratitude for the business you're giving them and not trying to sell you more stuff that you don't need. You know that if you start selling your customers service repairs they don't need, they will not remain loyal customers for long. It's one thing if you could really use or benefit from a product or service. But if the vendors goal is to just gain a larger share of your wallet the I would say for you to RUN the other way!
Dealers, what are you thoughts on customer loyalty and vendor loyalty? I'd really like to hear why you are loyal to your vendors and what you think vendors should do to earn your loyalty.