Thursday, July 12, 2012

MyGuy Update

They say wisdom creeps. Years ago we heard this from a pretty smart service manager: “Hell, if the store don’t work any good on Monday, there‘s no reason for it to work any better on Saturday.” That covers a lot of service retention programs out there. What else can we do? For one of our OEMs, customer loyalty crashes by 50% the day the limited factory warranty expires. That is a stunning amount of money leaving their orbit. Worse, the “post-warranty” crash is not limited to one OEM. It is industry-wide. Why do so many post-warranty
customers defect? According to the customers, their business migrates to operations perceived as more trustworthy, easier to do business with, and lower priced (see the adjacent graph for the order in which customers value these characteristics). Some dealers, though, enjoy extraordinary service customer retention, even post warranty, and two dozen of these premiere retention dealers across four brands are contributing to defining how all dealers may increase service loyalty.

We are working with about 25 dealers from five different franchises to codify MyGuy processes. These are the transformative processes that will make dealer service advisors and managers into the trusted automotive service partners that we so often hear customers refer to as “my guy.” To determine the MyGuy best practices from the bottom-up the work involves internet reputation assessments, mystery shops, service customer focus groups, on-site process observations, service manager/advisor interviews, multi-franchise dealer workshops, and multi-franchise OEM workshops.

Here’s our starting point – what service customers value. We have a list of the top 26 things they value, grouped into 5 tiers … ranging from most important to, well, you know. The findings from our dealer report cards are shown to the right. The top chart reflects the online reputation of one dealer who is seen as a leader in customer service loyalty. Online reputation is a mixed bag in the top tier of customer values, but overall we find that digital customers were kind in their assessments.

The picture changed for the worse after we conducted a mystery shop. The dealer’s service department seemed to shine in areas that were not all that important (tiers 4 and 5).

Of the top three tiers of customer values (accurate time estimates, reasonable hourly labor rates, and accurate upfront cost estimates), most dealers failed to meet expectations in at least one of these categories during our mystery shops. For oil changes, they did not provide a price or time estimate. For those with posted oil change prices, these rarely matched the final bill. As the original finish time came and went, several customers did not receive updates on the additional time the service would take, so they were left waiting to see (and wondering) when they would be done.

To improve in two of the top three categories, all you have to do is tell the customer how much it will cost and how long they will need to wait. If anything changes, let them know, instead of leaving them hanging. When it comes to communicating with the customer, less isn’t always more.

And, while you’re at it, take down that labor rate sign. Your customers don’t (usually) make $100 an hour, so they don’t like to be reminded that they’re paying you that much.

Bottom line: It looks like dealers are putting their time and energy into things customers don’t seem to care all that much about. Dealers do what we tell them. And, we are not telling them the right stuff. It’s time to direct their attention to tier 1 customer values!

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