The buzz today among vendors in the automotive industry is all about making the car buying transaction faster and more convenient for the consumer. I get it. Consumers think it takes too long to buy a car, so technology companies are inventing ways to trim down that transaction time. Sure, it may make car buying an easier and more convenient experience for consumers which, the hope is, will make consumers buy more cars. But, while that might be true, what are the side effects?

Now, if you want to talk about the power of convenience, look at Amazon. Speed and convenience are after all, the keys to their success. If Amazon had its way, it would simply teleport whatever a customer wants to them instantly. They can’t (and they don’t) but they’re very good at getting things to customers quickly – sometimes within hours.

However, when it comes to automobile purchases the real prize dealerships should be trying to win isn’t a quick “sale,” but rather a customer for life. If you take the human interaction and relationship building opportunity out of the consumer car buying transaction, when will dealers have the chance to START a relationship, much less BUILD one?

I understand that making the car buying process faster, easier and more pleasant is appealing. But consider the ramifications of essentially sterilizing the car buying process. What will this mean for future business from your customers in both sales and service?

While everyone is talking about how the auto industry should look to Amazon and create that “Amazon experience,” in my opinion, it’s not so much that consumers are loyal to Amazon. Perhaps the reason there are so many Amazon-loyalists and Prime members is because Amazon customers are, in fact, loyal to convenience. If Amazon stopped being convenient, customers would leave and find a retailer that is.

Don’t misunderstand me, I certainly believe that using technology to expedite the car buying transaction is wise. Consumers want fast and furious (for the most part). What I’m saying is that it is important to keep those points of in-person human contact during the transaction, so you can bond and create a relationship with each customer.

When a customer needs laundry detergent, they buy it. They don’t necessarily care from where. In fact, they may even buy Tide from Amazon and skip the grocery store altogether. No relationship will ever be built between the consumer and “whatever random place the consumer chooses to buy Tide from when they need it.”

I’m certainly not trying to be all doom-and-gloom for technology companies in the automotive industry that are working to create a faster, better transaction. All I’m saying is that we – as an industry – need to consider how to make the customer experience better while still retaining enough opportunities to build relationships. In the end, that’s the only way we can earn and keep a customer’s loyalty.

Rewards programs are indisputably a staple in common society. Most retailers have them and consumers have come to expect them.

The problem is that most retailers view rewards programs as an expense, rather than a revenue generator. Sure, there are discounts and other things that come along with rewards programs – and those are the “expenses” some retailers focus on – but there’s one big missing.

Branding.

Have you ever seen someone with a keychain full of loyalty cards? Every one of those is attached because that individual either regularly shops at those places or plans to. Nobody attaches loyalty cards to their keychain or sticks them in their wallets for businesses they have no intention of ever visiting again.

Let’s look at it from a retail automotive perspective. How much does it cost to attach those personalized paper plates, license plate frames or metallic logos to the vehicles you sell? It’s not cheap, right? But you do it because every vehicle rolling down the road with your logo on it is advertising! Whether it’s conscious or subliminal, or whether those buyers driving down the street with your logo love you or hate you, the potential customer viewing it simply sees the logo and the fact that the car buyer CHOSE your dealership. And that’s what matters.

Rewards programs offer the same type of promotion. Those loyalty tags hanging from keychains get noticed… and even if they aren’t that apparent to others, the branding and top-of-mind stays with the owner.

Assuming your loyalty program is in fact attractive to your customers, they will continue to come back. Set up properly, they will not only come back, but come back more often. Consumers love to rack up points towards rewards that matter to them. All you need do is ensure that your rewards matter… and that your rewards program is branded. Just like those license plate frames.

Rewards programs aren’t designed to lose revenue but to increase it while building customer loyalty and retention. It’s a well-known fact that at businesses make more money from retention than acquisition, yet many dealers are willing to spend $650+ to acquire a new customer, while cringing at giving an oil change away to a loyal one.

Take care of those that take care of you. These loyal customers can bring in more business than any efforts to acquire new customers while fighting the independents. If you keep them happy enough, they won’t even consider going anyplace else. 

The never-ending question is… what does it take to earn customer loyalty? Of course, the answer changes all the time and that is what makes loyalty so confusing and difficult.

As technology continues to develop and improve, consumers have more access to information and aggressively compare prices and services. Businesses are constantly on their feet scrambling to adjust in order to keep customers and maintain any customer loyalty they’ve built.

However, there is one outstanding exception:

Southwest Airlines.

How has Southwest Airlines created such an outspoken, vocal and happy group of consumers where other airlines have failed? An article on Thrillist.com shares how Southwest started its journey promoting budget travel, but is no longer the least expensive. They do things differently than other airlines with no assigned seats or baggage check charges. And they hire willing employees who they allow to be themselves. And you know what? They are the only airline that hasn’t gone out of business or declared bankruptcy in the last 25 years! Oh, and I forgot to mention, they have never laid off or furloughed an employee.

Southwest made sound business decisions such as purchasing a fleet of the same model airplanes to maximize their parts volume efficiency. The airline encourages employees to be themselves and do “their thing,” which engages customers, makes them happy and creates an excellent customer experience.

While the biggest complaint is always their boarding procedure – which some call a “cattle call” – it is in fact more efficient than any other airline.

All other airlines are adding charges for everything under the sun, but Southwest Airlines continues to do its thing. There’s no first-class or seating assignments, but there are also no baggage charges or, as in some other “budget” airlines, charges simply to bring a personal item on board.

You know what they do have? Peanuts. And, yup, pretzels – sometimes.

But everyone loves them.

You don’t hear other airline’s passengers claiming to be raving fans anywhere near as often as Southwest Airlines. And, despite all of the cost-cutting, budget fares and other strategic moves, Southwest airlines has transitioned itself into one of the top three airlines in the country.

So how did it do it while keeping costs down? Employee engagement, customer experience and doing your own thing.

Even Southwest Airlines admits they aren’t always the lowest fare… which is why they shy away from travel search engines. But they encourage employees to delight their customers and that translates into customer happiness and pleasure. Their customers no longer USE those search engines but simply go straight to Southwest Airlines and book their flight, knowing that they will have a great experience at a competitive rate.

We would all be well served to look at the practices and tactics Southwest Airlines has implemented over the years to understand why their customers are loyal, raving fans and how they have grown into are one of the most profitable and stable airline in the country… without always being the lowest price.

Today’s consumers are fickle beings. It’s much harder to keep their loyalty than ever before. And, while it may take years to earn loyalty from a single customer, it could take only minutes to lose it. Your dealership can do everything in its power to earn and keep a customer – from loyalty programs, to amazing customer service and luxury amenities. But, there is one basic concept that, should you adopt it, is the easiest and fastest way to nurture, earn and retain customer loyalty. And that is by setting realistic expectations for your customers, then consistently delivering on those expectations.

Think about it this way. If you were to go to a dealership which promotes a 30-minute oil change through their quick lube service, you would expect that, at the very minimum, your oil change is completed within 30-minutes. And rightfully so, because the business set the expectation for you. If the dealership fails to deliver on that promise, it’s much harder for a consumer to believe any future promises or expectations.

Another example is service upsells. Let’s say that same customer comes in for an oil change and, after the multi-point inspection is completed, the service advisor presents the recommendations to the customer. One of the first things just about every customer asks – whether they are waiting in the service department or dropped their vehicle off – is, “How long will it take to complete those recommendations?” A service advisor has two options here: they can give the customer a realistic time-frame, or they can downplay the time it will take in order to (supposedly) get the business.

My advice? Always be real with your customers. If you don’t know the answer to that question, tell them. If you do know the answer, be honest. There are multiple variables when it comes to answering these questions such as, how busy is service today, whether technicians are out sick, causing a backload and extending service times, or perhaps there are simply a lot of big repairs being completed. On a regular day, these services may only take an additional 2 hours. But on a busier day, that can be extended.

Service advisors usually have a good idea on any given day what is – or isn’t – going to affect that timeline. If they give the cookie cutter response – such as 2 hours -- anytime a customer asks, they could be setting an expectation they simply cannot fulfill. And that’s bad news when it comes to earning customer loyalty.

Sure, customers are in a hurry. But, if you want their trust, the truth is that customers simply want a “real” answer. Being honest with them and telling them the truth starts the transaction and relationship off on the right foot. I believe a customer would rather be told something to the effect of, “Mr. Jones, Normally these types of services would only take a couple of hours to complete. Today, however, the shop is quite busy, and we are short-staffed. So, it may take a bit longer even up to four hours or so. We will do our best to complete them faster. I just wanted you to know up-front.”

Will you lose some service recommendations because of an extended timeline? Probably. That being said, I can guarantee you one thing. You won’t lose a customer. Or create an unhappy one. In fact, what you will accomplish is trust. By setting realistic expectations, then delivering on them, customers will appreciate you and continue to use you for service.

In addition, with each successful visit, it becomes easier to upsell service. And, in the end, a loyal customer will bring more revenue to your service department over their lifetime than a customer who has a poor experience because unrealistic expectations due to unreal expectations and failing to deliver on them.

Be real. Set realistic expectations. Communicate honestly. That’s how you earn a customer’s loyalty without spending a dime.

Occasionally, when creating a great customer experience a business will have to go above and beyond for its customers. These little WOW moments can easily take a repeat customer and make them loyal, or even take a loyal customer and make them into a brand advocate.

Author and thought-leader Peter Shankman shares an interesting story about this subject. He was about to get on a flight and hadn’t eaten much that day. As a big fan of Morton’s Steakhouse, before his flight took off he jokingly sent them a tweet, asking to be met at his destination airport with a steak. Thinking that was the end of the story he went about his travels. To his surprise and delight, upon arrival at his destination airport a Morton’s Steakhouse employee was waiting for him with not only a steak, but all the side dishes as well. Imagine how that affected his perception of Morton’s.

Of course, an experience like this is too wonderful for Shankman not to share on his social media and it sure did garner a lot of positive attention for Morton’s. But that’s not quite the point. The point is this: He will continue to love Morton’s and this story will be told many times more. In fact, here I am telling his story seven years later.

Are there examples in the auto industry? Certainly. Inspired by this story, I heard about an incident where a conference attendee sitting in a session tweeted out that he could really use a cup of coffee. Well, conference management were listening. They figured out which session the attendee was in, based on other tweets, and took him a cup of coffee – without disturbing the session. What do you think that attendee thought about the conference after that? He was certainly impressed and shared the story via social media – and told it throughout the conference to his peers.

It is important for every business to be ready, listening to customers and finding those WOW opportunities, or they will be perceived as if they don’t care. I’m not saying that you need to do extraordinary things such as delivering steaks. But that act of delivering a simple cup of coffee took minimal effort and accomplished the same effect.

Finding small things to make the customer’s day a little more special can have a huge impact on loyalty without taking a bite out of your bottom line. In the end, it’s not how expensive the gesture is, but simply showing the customer that you heard… and, more importantly, cared. And that’s what will make a difference.

People are motivated by many different things. Some by money. Some by time off. But one of the most universal ways to motivate an employee is by recognition. For the most part that recognition comes from external sources; perhaps a customer compliments the employee either in person or via an online forum – then management reacts and shares that feedback with the employee and, perhaps, with the dealership’s staff.

But what about that employee customers never directly interact with?

In the musical Chicago, the husband of the lead actress sings about how nobody ever notices that he exists:

“Cellophane, Mister Cellophane. Should have been my name, Mister Cellophane. ‘Cause you can look right through me, walk right by me and never know I’m there.”

Every dealership loves receiving perfect CSI surveys from customers. It helps financially in many ways. But, in most cases, the person receiving accolades is the salesperson. I am not saying that they shouldn’t, as the salesperson certainly has a large role in the dealership.

The point I am making here is that there are many cogs in the wheel that created that perfect survey/experience for the customer. From the service technician that did the pre-delivery inspection on the vehicle, to the finance manager that handled the paperwork, to the porter that detailed the vehicle and, in some cases, to the person that went over the vehicle at delivery with the customer – all of them contributed to that perfect survey and that specific customer’s great experience.

A recent Disney Institute blog by Senior Programming Director, Bruce Jones, stresses the importance of employee recognition. He states that employees working after hours, or with limited guest experience, are just as important in the process and experience as front-line employees with direct customer interaction. They should also be rewarded and recognized.

Employee engagement is an important part of company culture. Without buy-in and a coordinated effort from all the cogs in the customer experience wheel, that salesperson could do a perfect job yet receive a bad CSI survey simply because a porter failed to clean the car properly, or a technician forgot to remove some plastic protective wrap.

Company culture and employee engagement extend to every person in the organization. While those on the front-lines may get DIRECT recognition from customers, the behind-the-scenes employees, with little to no direct customer contact, tend to be forgotten. And that can be the easiest differentiator between a perfect survey and one that is not.

Jones references a quote from a Forbes article which  inspired his blog, “employee recognition knows no calendar.” He went on to add that it “also knows no time clock.”

Employee recognition reinforces desired behavior, acknowledges employees when they do a great job and leads to consistency in desired behavior. Don’t let your employees’ gas tanks get low because you failed to fuel them with recognition.

It’s an easy oversight to make – even if not intentionally. Just as a sales manager might high-five a salesperson who closed a deal, or a finance manager that sold product in F&I, the porter who spent some extra time making the new vehicle ready for presentation to the customer should also be recognized for their hard work.

Recognize everyone in the process that led to a great customer experience and you should find a more consistent – and rewarding – result for both the dealership and the customer.

Customer loyalty is increasingly difficult to earn. Consumers simply aren’t as loyal to a specific store as they were in the past.

Years ago, perhaps you’d visit that local hardware store owned by Bill and Martha. Each time you visited they welcomed you by name and offered their assistance. In our current age of mega-stores, the customer experience is not the same. There’s no longer a Bill and Martha waiting to greet you. Nor, in most cases, do the staff know your name.

So, these days, the mega-stores and Internet retailers create and maintain customers through convenience. Just this past week, Amazon announced 2-hour delivery from Wholefoods for Prime customers. Most grocery stores already offer customers the ability to order online. The customer then simply shows up at the store where an associate loads the items into their vehicle. Amazon says… “meh… we’ll bring them to you!”

Banks now offer consumers the ability to deposit checks via a mobile app. Starbucks allows you to order your coffee in advance through their app. You can simply pick it up when you arrive, skipping to the front of the line.

The point is that retailers are conditioning consumers to expect convenience and, if the rest of the experience is good, consumers flock to use these services and continue to return.

How convenient is your dealership?

In the future, convenience will be the top priority for customer loyalty and retention. Our society has developed to a point where consumers are no longer Wowed by the convenient services offered by major retailers; they expect and demand them.

The more convenient your dealership makes all customer interactions, the more likely those customers will continue to come back. With the future of retail sales predicted to slow, and service revenue predicted to be increasingly important, now is the time to investigate how to streamline every process and touchpoint for your customers.

However, keep in mind that you can be convenient and still lose customers if the overall experience is poor. For example, what if you went online, ordered your groceries, drove to the store, had the associate load up your vehicle then drove home. So far so good, right?

Well, what if when you got home you discovered some of the items you ordered and paid for were missing. Now what? You are forced to return to the store to find a manager and get those items. At this point, you’ve made two trips to the store and probably spent more time than if you just went to the store and shopped there, rather than ordering online. Suddenly, the convenience factor disappears. You may still like the idea of buying your groceries online, but you might just be tempted to try out a different grocery store next time.

Time is money and it’s increasingly factored into the consumer’s transactional decisions. Frequently, consumers choose to spend a little more money for a more convenient experience. It’s no longer all about “lowest price,” but more about “most convenient.”

Make sure that your dealership’s processes are designed to create the most convenient customer experience consistently and your customers will stay around much longer and will not tend to be swayed by coupons or low prices elsewhere.

As countless messages fill the world, consumers increasingly turn to family, friends, peers and, even strangers, to make buying decisions. Whether those decisions are as broad as who to do business with or are centered around which item to buy to help solve their problem, word-of-mouth and online reviews have become a key part of that decision-making process. Too many bad reviews via word-of-mouth or online can instantly cause a customer to start looking for alternative businesses or products.

Negative reviews can cause you to lose business. This is why there has been a big push for the past decade or so in the reputation management area. Dealerships are increasingly sensitive to reviews and are monitoring and responding to them as needed. The prevailing theory is that customers with bad experiences are more likely to leave negative reviews AND unhappy customers will tell more people about that poor experience than happy customers will about a good one…. But is that really true?

An article on Entrepreneur reports that companies who deliver a positive customer experience enjoy revenue growth up to eight percent higher than market average. It also shared that, while customers with a negative customer experience will tell multiple people about that experience, they tend to do so once then move on to the next company.

Meanwhile, customers with positive experiences tend to keep coming back and, through a consistent positive customer experience, tend to tell more people over the course of time with each and every experience. The research revealed that over the course of a happy customer’s lifetime, they turn into brand advocates and create more than 14 times the value of those customers with negative experiences.

So, what does this mean when it comes to reputation management and handling reviews in general?

For the most part, dealerships tend to focus on and react to NEGATIVE reviews. Nobody really wants an unhappy customer – especially one that has taken to the Internet to share that negative experience with the world.

What typically happens is that management jumps right on that negative review and reaches out to these customers in an effort to resolve their issue. This accomplishes three things: 1. If you can solve the customer’s problems there’s a possibility that they give you another chance and perhaps even remove or edit the review; 2. By simply responding to the review publicly, other consumers considering your business will see you care about your customers and may not give those negative reviews as much weight in their decision-making process; and 3. This increases the chances that a customer continues to do business with you.

But what do many dealerships do with excellent reviews?

For the most part, nothing!

Perhaps if a particular employee is mentioned, he or she will get a “good job” from management. Everyone will be happy and thankful for the positive review. But what about the customer? While you are certainly listening to them because you see the positive review -- here’s the kicker: they don’t know that you are!

Customers with positive experiences can ultimately increase revenue and spread positive messages and word-of-mouth recommendations. Therefore, it’s just as important to acknowledge positive reviews as it is to respond to the negative ones.

Recognizing a positive review shows happy customers that you are listening to them and appreciate their business. Personalized “thank you” responses will go a long way with that customer. Acknowledging them reinforces the type of behavior you want to continue… namely seeing that these customers continue to share positive messages to their networks, which ultimately creates brand advocates.

In the end, responding appropriately to all consumer feedback, good or bad, is important. But for different reasons. It ultimately all ends up as a part of each individual customers TOTAL customer experience with you.  You probably can’t fix all of the unhappy customer’s problems. However, in the end, you can say you tried and others will see that you did.

For those happy customers, a simple thank you adds just one more piece to that experience. Either way, your dealerships will win more often than lose.

80In a very interesting dynamic shift, consumers are increasingly changing how they want to interact with businesses for customer support.

Just five years ago, think about how irritating it was to navigate through phone trees, just to finally reach a support agent, explain the problem, then be transferred to another agent, repeat your story and hope they are the right person to resolve the problem.

We have put up with this for years – but times they are a changing. There is a new sheriff in town that, surprisingly, is much more empowered. Let me tell you a true story.

Last week, a friend of mine discovered a fraudulent purchase on his credit card. Within three minutes he was notified of the activity via an email from his credit card issuer stating that a “card not present” transaction had been made. He also received an order confirmation and so immediately called the company, explaining that he did not place the order. The company proceeded to claim they couldn’t cancel the order and said he would need to contact his credit card company. Frustrated, he asked to speak to a supervisor who then proceeded to tell him the same thing. Normally, this major brand enjoys extreme brand loyalty and is all smiles and very helpful when it comes to customer service. But not this time.

He then called his credit card company who told him they would monitor the charge but couldn’t dispute it until it posted to his account. He was irritated that the company where the order was placed couldn’t cancel the order, since it had been made such a short time ago and had not yet been sent through.

What did he do? He took to Twitter to voice his displeasure. And guess what? The company responded and asked him to direct message them his issue. At first, he got the same response as that from the reps and supervisor he had previously spoken to.

So, now even more frustrated, he returned to Twitter and again voiced his unhappiness. Within 15 minutes he got a message back from the company’s Twitter account saying that, after their team had reviewed the matter, the order had been cancelled and charges reversed. Of course, he was happy and his faith in the company restored. BUT this brought up an interesting observation.

Both the initial support rep and the supervisor claimed there was absolutely nothing they could do to help him – that he would have to go through his credit card company. But the social media team WERE able to help him. Since the social media team were able to handle the problem and get the customer’s concern taken care of, does that mean they are more empowered to handle problems than the support rep or the supervisor?

There are several similar stories you can read on the Internet. The next time there’s a problem with the same company, do you think my friend will be more likely to CALL or to TWEET?

For customer retention and loyalty, consistency in service is crucial. When it’s not, consumers will use the communication channel that solves their problem over the one that does not.

With the introduction of social media teams empowered to provide solutions, consumers are quickly navigating away from phones and towards digital interactions. These digital teams seem to not only have more empathy, but are also more motivated to help and empowered to make decisions; is this all due to the power of social media? No company wants their brand’s name and image dragged through the mud in social forums on social media. And that motivation is a powerful one indeed.

Some customers may not even think to turn to social media for help and so find themselves unhappy after a poor customer experience with no resolution in sight. Those are the customers you need to worry about. If the company’s social media team had not in fact saved the day for my friend, that company may have damaged his brand loyalty.

Ensure that every issue is handled on a case-by-case basis, and that each support touchpoint in your dealership is empowered to solve problems. You will find your customers are happier, no matter how they choose to interact with you, and will have a much easier time retaining loyal customers.

As a dealership there are many ways you can identify if you’re losing customers. Through data, you can see that John Smith used to come into the dealership regularly for service but then disappeared without a peep. Why did John Smith stop coming in? Do you know? You could certainly reach out to John and see if you can get any insight, and he may even respond and tell you why. Perhaps he simply moved out of the area. But what if he defected to competitor or took his business to an independent service center? Wouldn’t you want to know?

An interesting article on allbusiness.com discusses how businesses can’t implement or maintain customer retention or loyalty unless they understand the reasons why their customers are leaving. In an “eating tomato soup with chopsticks” analogy, the author explains that without knowing the “why,” when it comes to customer defection, “you may be getting a little taste, but you’re not really catching any of the good stuff.” According to the article, the three reasons customers leave are as follows: they had a bad experience, their loyalty isn’t being rewarded, or they found a better deal elsewhere.

When it comes to these three reasons for customer defection, dealerships are certainly challenged – probably more so than other retail and service industries. Many consumers already enter the transaction with skepticism and low expectations.

Well, what about rewarding loyalty? If customers are defecting because they don’t feel appreciated, that would certainly be an area any dealership should consider changing. There are many ways to show a customer they are appreciated -- not just through loyalty programs. Taking the time to get to know a customer, greeting them by name, smiling and thanking them for their business -- these are all ways staff can show appreciation and make a customer feel welcome. A loyalty program on top of these basic interactions can keep a customer engaged and loyally returning.

If you find that you’re losing business because customers are getting better deals elsewhere, you have two choices: offer better deals or build more value into your services. As there will always be competitors willing to meet or beat prices on vehicles, many dealerships have chosen to add value through extra services including free car washes for life and other perks. Will this tactic work and help overcome losing customers over price? Only if the customer experience that goes along with any value-adds is also great.

A customer isn’t going to care about free car washes if they have a horrible experience and decide to never return. The same applies in the service drive. I’m pretty sure that most dealerships aren’t going to want to try and match pricing with independent service centers and you shouldn’t have to. Dealership service has many advantages over independents. The problem is that many dealerships don’t make customers aware of those advantages. So, when a customer sees a $19.99 oil change coupon, they make the decision to leave your business based on price alone, without factoring in why dealership service is superior.

If you can address these three challenges in your dealership which cause customers to defect and understand exactly why it is happening, you’ll be well on your way to creating a customer retention strategy that is both effective and reliable. As the old saying goes, if you don’t know it’s broken, you cannot fix it.