If a customer has a problem with his dealership, Vince Palladino of Palladino Honda wants to know about it — fast.
It's not good enough to learn of a disgruntled car buyer or service department customer weeks later, when a satisfaction survey finally is returned by mail to his Sudbury, ON, dealership.
“If you're finding out two weeks later, the land has already been scorched, the damage has been done,” Palladino says.
That's why he has switched to a new customer feedback system that relies on emails to speed up the response time in what he says is a less intrusive, more open form of communication.
Auto makers and dealers still predominantly use mailed survey forms and telephone calls to conduct satisfaction surveys.
That will ultimately change as the benefits of email become more apparent, Palladino predicts. “I think regular mail will be dead as a means of surveying customers. Email will be first and the telephone second.”
He uses an email survey system devised by Vital Insight Group. Its president, Jason Tryfon, says that, of 50,000 people surveyed, 86% ranked email as their preferred form of communication with a business.
“Customers want timely communication in a manner that suits their busy lifestyles,” he says.
He cites a case study of a luxury auto brand with low customer satisfaction scores and poor response rates to their surveys that were mailed out at random.
“The response rates to traditional surveys was horrible and didn't provide any insightful feedback,” Tryfon says at an ENG 2008 Automotive Customer Relationship Management conference in Costa Mesa, CA.
“The existing surveys required six weeks to receive and process and distribute the results to the OEM — too late to take corrective action if there was a problem with the dealership,” he says.
By switching to email surveys, the brand tripled response rates; 45% of respondents provided comments along with their ratings; customer retention increased 18% in 120 days; and the average time to receive, process and distribute feedback went from 42 days to 2.8 days, Tryfon says.
Although phone surveys are faster than mail, consumers tend to be less candid during them, he says. “People don't want to give truly honest feedback when talking to another person.”
Although sometime the frank feedback may make dealers “curl up in the fetal position under their desks,” it nonetheless can lead to fixing problems and making “profitable changes to your dealership,” Tryfon says.
“If you don't have a chance to do something to cure a complaint, say with a repair job, then the opportunity is lost,” he says.
Palladino agrees customers are more forthcoming when responding by email.
“They are typing on an inanimate object, collecting their thoughts, editing their thoughts and doing that at a time when it is convenient.”
Information from such circumstances is more detailed than if a survey representative telephones a customer who is “heading out the door on the way to a kid's soccer game,” Palladino says.
Some customers will always want the one-on-one of a phone survey, Tryfon says, “But the costs dramatically decrease when you go from phone to email.”
But currently, there is an Achilles heel to using emails for customer surveys. It is this: Most dealerships do a poor job of consistently obtaining customers' email addresses in the first place.
“A lot of dealership people throughout the country don't collect their customers' email addresses,” Tryfon says. “They say they are too busy with other things. That's not true. All they need to do is ask. And we need to give them the tools and training to get those addresses.”
Getting enough customer email addresses was one of the preliminary things that had to be done before the luxury auto brand in the case study converted to using the Internet for satisfaction surveys.
It took months to get enough of those e-addresses, much of the effort done through promotions, Tryfon says.
Dealer Mike Baker of the Bob Baker Auto Group in San Diego, CA, says customers are more willing to give up their email addresses “if you explain why you are asking for them.”
Baker also cites retail data indicating that the more expensive a product, the more willing a customer is to provide an email address. “People are most receptive to mortgage companies and stores, such as dealerships, selling big-ticket items,” he says.
Palladino says much of the emailed feedback from his customers is positive. When it isn't, the dealership must do something about it.
“You can have contact with a customer 30 times and if you haven't made them happy, it's pointless,” he says. “You have to be able to return those emails or phone calls.”
Two years into the email-based satisfaction program, “we're still experiencing growing pains, but it has been worth it,” he says.
Before, customer dissatisfaction feedback was not well received by the dealership staff. “We found managers would try to shield their team, to try to sugarcoat things,” Palladino says. “Now, there is no sugarcoating.”
Some dealership staffers may dislike the detailed and candid feedback, he says. “You'll have kick back. So make sure your staff is on board. How you present it to the staff is important. It should be presented as a way of solving problems.”
Satisfaction issues are discussed at regular staff sessions that are no different than Monday morning sales meetings, he says.
Often, customer complaints are easily resolved, he says. “I've found that in my business what's most important are the elementary things, like using seat covers when working on a car so you don't dirty the interior.”
The new system has made Palladino's life as a dealer easier.
“The more information I share, the fewer issues there are and fewer times I have to step in,” he says. “Once you empower your staff with information and a little guidance, there's a collaborative approach to solving problems.
“I solve fewer problems myself than ever before. I used to solve them all, opposed to getting the information in front of the managers.”