Robert Waltz's job is to eliminate “the assassins.”
He's not a counter-terrorist government operative. He's Toyota Motor Sales U.S.A.'s vice president-customer satisfaction, a new department created to try to fix Toyota dealerships' overall poor satisfaction scores.
Waltz describes assassins as vexed customers who, because of perceived ill treatment, leave a dealership without buying, then “badmouth you to everyone they know.”
In the Internet world, that can be far-reaching.
There are various reasons for high levels of customer dissatisfaction. And assassins abound.
“For people who walk out under those circumstances, 44% are assassins,” Waltz says. “We're trying to convince our dealers what an impact it is having.”
The power of the Internet is that such disgruntled people aren't just complaining to friends and relatives. They are posting their gripes to an online audience.
Toyota's 1,250 dealers in the U.S. enjoy healthy sales (2.2 million units last year) and profits. The same cannot be said for their collective customer satisfaction ratings, which are among the worst in the industry.
It is Waltz' job to try to fix that. He's attempting to by showing dealers newly collected hard evidence of the long-term damage that can be done by customer unhappiness.
“We're finally getting feedback from people who are walking out,” he says of Toyota's shopper surveys, specifically ones called “Rejecter Studies.”
“We're sharing our data with dealers, and this is the first time we got their attention,” Waltz says at an E.N.G. automotive customer relationship management conference in Manhattan Beach, CA.
He adds: “Toyota dealers have it pretty good right now. The challenge is to convince them of the need for greater customer satisfaction.”
Why does the corporate office particularly care if a miffed customer leaves one Toyota dealership and end up buying a vehicle from another Toyota dealer?
Because, Waltz says, “there are only so many Toyota dealerships in an area, and only so many dealerships to walk out of.”
There's also this: although most of those disgruntled customers end buying from another Toyota dealer, 45% defect to another brand.
And this: “Customers will forgive a bad dealership experience if a product is superior,” Waltz says. “But vehicle quality as a whole is improving.” He foresees a day when Toyota shares its reliability reputation with many other auto makers.
When that happens, the “dealership experience” becomes critical.
A key part of customer satisfaction scoring is a dealership's speed at getting a buyer in and out. Toyota dealers tend to err there.
Five hours spent buying a car at a dealership “is a scary number,” Waltz says, yet one in four Toyota customers say that's how long it took.
It's bad business to staff the showroom with 20 sales people on a busy Saturday, but only have two finance and insurance people on duty “when all the paperwork funnels to F&I,” he says.
Low closing rates and low customer satisfaction scores go hand in hand, according to a Toyota survey of unhappy vehicle shoppers.
“There's a direct correlation,” Waltz says.
Dealerships with the highest customer satisfaction indexes closed deals about 80% of the time, while those with the lowest satisfaction indexes closed less than 30% of their deals, according to the Toyota study.
The biggest reason for non-buyers leaving a dealership in a huff is what they perceive as “pricing games,” Waltz says.
He cites one dealership in the New York City area that scored badly there, but ironically did relatively well on first-visit closings.
The reason? Its staff browbeat shoppers into buying, fearing that customers who leave won't return, which indeed often was the case. Poor customer satisfaction scores reflected that, Waltz says.
In contrast to fearing the work of assassins, Acton Toyota Scion in Acton, MA, works at turning customers into dealership advocates.
As a result of its customer satisfaction efforts, the dealership ranks high on www.dealerrater.com, a website on which customers rate and describe their dealership experiences.
Acton touts its top rating by mentioning it in advertisements and on the dealership's own website, which has a dealerrater.com link.
“It is no longer people describing their dealership treatment just to friends and relatives,” says Matt Lamoureux, Acton's director of Internet business development. “They go on line and tell thousands of people.
“We use that credibility developed from third-party sources to our advantage,” he says. “Deliver on promises and business will grow.”
Acton goes out of its way to avoid pricing games.
“It's not about arm wrestling with a customer over $300,” says Lamoureux, “I'll give up that $300 to build a long-term relationship. Winning customers is good, keeping them is better.”
Sometimes, more than a few hundred bucks is at stake.
Lamoureux recalls an Acton salesperson grossly misquoting a price to a customer, telling him a Tacoma pickup truck was available for $1,500 below invoice.
What did the dealership do upon learning of the misstated price?
“The customer got a great deal on a Tacoma,” Lamoureux says. “And we got the best kind of advertising for $1,500.”
Bad Car-Buying Experiences Hurt the Entire Industry
Poor public perception of auto dealerships hurts the entire industry, says James Lentz, executive vice president of Toyota Motor Sales U.S.A. Inc.
“The truth is, most people get to know the industry by visiting one of 21,500 dealerships, and it's not always a positive experience,” Lentz says at the Management Briefing Seminars in Traverse City, MI.
The fear is such negativity could influence the way in which government leaders and regulators regard the industry as a whole and act accordingly during a time of increased national interest in mandatory fuel-economy measures and the like.
Lentz cites a Gallup consumer poll in which car sales people finished dead last in perceived honesty and integrity.
“It is a huge problem, and we're all being judged by it,” he says. “One (surveyed) person said he'd rather be at a funeral than at a dealership buying a car.”
Lentz hastens to add he is not blaming all dealers, most of which “do a great job” selling and servicing cars. But he says the average customer wants to spend two hours buying a car, where instead it often takes seven to eight hours to complete the deal.
That stands to be a serious issue with 20-something Generation-Y members, he says. Marketers identify them as impatient consumers.
“We have to improve, streamline and put the fun back in car buying,” Lentz says. “Dealers look to our leadership. Clearly, we're not doing enough.”
The issue is one that affects Toyota, in particular. The popularity of its vehicles creates a seller's market. Because demand is high, some dealers have not felt the need to update their facilities or modernizing their sales processes.
Consequently, Toyota dealers routinely rank at the bottom of customer-satisfaction surveys.
Ironically, many domestic-brand dealers, hungry for sales and thus catering to customers, score much higher.
Besieged by buyers, many Toyota dealers have outgrown their facilities. Collectively, Toyota dealers are putting $3.5 billion into improvements and expansions, Lentz says.
He praises stores that find creative ways to speed up the car-buying process.
For example, to cope with daily “crunch” periods that can overwhelm finance and insurance personnel, some Toyota dealerships cross-train showroom staffers to step in and help with F&I sales when necessary.
Lentz says auto makers can aid customer satisfaction at dealerships by better allocating vehicles. Dealers often are blamed for the unavailability of popular models.
“Every manufacturer needs an allocation system that is fair and equitable,” Lentz says. “Sometimes too much heat is put on dealers.”
— By Steve Finlay