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An interesting study conducted by MaritzCX and published on CustomerThink relays how dealers should care about – and invest in – the creation of a better customer experience in their stores.
While customer experience can be vague, and in the past has mostly been measured through surveys and CSI scores, MaritzCX conducted a comprehensive study to show dealers the only factor that affects the bottom line – and that is revenue. The study’s results illustrate that when a dealer climbs one level in customer satisfaction (i.e.: from “satisfied” to “very satisfied”), sales volume increases on average by 329 vehicles per year, adding $64,000 in additional sales profits. In addition, the same customer experience improvement in service increases revenue by $41,646 per year. According to the study, “combining additional sales profits and service profits reveals a potential incremental gross profit of $106,315 per year for the average dealership.” By contrast, when the customer experience moves down a level, the study found a decrease in gross profit of $191,624.
Customer experience is currently a hot topic with dealers and vendors. However, many dealers are hesitant to spend lavish amounts of money on showroom improvements, or luxuries without a concrete answer to the most important question most dealers ask – “What’s my ROI?”
The MaritzCX study was able to capture the monetary benefits for dealers investing in an improved customer experience. It certainly falls in line with what loyalty experts have been preaching for years. Customers that have a consistently great customer experience tend to spend more money with the dealership and also refer their family and friends. This referral activity provides dealerships with increased exposure and opportunities that they may not have had otherwise. This represents additional revenue producing possibilities in both sales and service.
Brand loyalty is increasingly difficult to achieve -- and brand advocates are even harder to capture. Dealerships that continue to operate as is, without identifying customer pain points in their experiences – whether those be service or sales – risk losing business to either competitors, or independent service repair facilities. Ensure that conditions are optimal to provide that great experience on a consistent basis to each and every customer. This will help maximize the potential of the customer being loyal and of capturing their future business, directly or through referrals.
In the end, part of every customer’s buying process involves making the decision who they want to purchase a vehicle from. Treat your customers right, provide a great experience and take the time to really show them you appreciate their business. This then acts as a catalyst for all of your other brand enhancing activities – high CSI scores, increased online reviews and word of mouth advertising. Neglect customer experience at your own peril. Today’s consumers are far less willing to put up with a poor experience and will very quickly take their business elsewhere. Improve your customers’ experience in your store and ensure that they are well taken care of. Foster brand loyalty and create brand advocates. Your bottom line will grow because of it.