THE 16TH ANNUAL WARD'S DEALER BUSINESS 500 ARE dealers who can run, hit and throw.
Check out their stats (our Ward's 500 coverage starts on pg. 10, the “list” on pg. 12) to see how great these major players do throughout the various profit centers of dealerships.
They don't just do well in one or two departments; they excel across the field of new- and used-car sales, finance and insurance and fixed operations.
To post such numbers, these dealers connect with customers. They also connect with their employees. Employee satisfaction spurs customer satisfaction. A common denominator of the top dealers is that their employees tend to stick around.
Dealerships on average see a general employee turnover rate of 40% a year, 70% for the sales staff. But the top dealerships — by fostering good personnel relations, encouraging teamwork and paying better-than-average pay packages — see much lower staff turnovers. Customers see the same dealership people long-term. That inspires customer loyalty.
Alas, the Ward's 500 aren't perfect. A flaw we detected at some of their stores: the people answering the phones come across as clueless.
Associate Editor Cliff Banks, in overseeing the Ward's 500 project, calls many dealerships to check, confirm and clarify data.
He's encountered receptionists here and there with terrible phone manners.
He says, “I asked to speak to the president at one dealership. The receptionist said, ‘He doesn't work here anymore’ and hung up before I could say anything else.”
In another call, Banks sought to speak to the president of two dealerships. His office is at one. Not knowing that, Banks called the other.
“The woman who answered said, ‘I never heard of him,’” says Banks. “Granted, he's based at the other dealership, but he's the president of both. She doesn't know that?”
A phone call is often a customer's first contact point. It shouldn't be the last, because someone bungled a call.
People fielding dealership calls are often entry-level employees. Fine. But it's risky business to set them loose without training, people skills and a keen understanding that their job is important.
It's all in the game with CSI
In January, I told of an Eastern dealer who had General Motors on his case because only 30% of his customers said in CSI surveys that they were “completely satisfied” with the dealership. (Sixty-nine percent said they were “very satisfied,” bringing the overall satisfaction total to 99%.)
A lot of readers have been weighing in on the subject.
An Iowa dealer tells me it's a “mathematical misuse of percentiles” the way manufacturers stack dealerships' customer satisfaction index numbers.
He explains, “In the case of most manufacturers, the bottom “X” percent of all dealers will be ruled as non-performing or unacceptable regardless of their actual scores. In the case of GM, regardless of the scores, the bottom 15% of all dealers will be classified as poor/unacceptable.”
He says to consider 100 students taking a test, with 85 of them answering all questions correctly and 15 answering all but one question correctly.
“According to percentiles, those 15 students are at the bottom of the ratings, and, in GM's case, unacceptable,” he says.
“Compare that to another class of 100 students taking the same test. Eighty-five students get 100% correct and 15 can't even get one question right.”
His point: Both the 15 students who incorrectly answered all questions and the 15 students who correctly answered all but one are in the bottom 15 percentile. “Yet their proficiency is vastly different,” says the dealer.
Meanwhile, Michael McKean, president of OCD Consulting in Quincy, MA, ticks off five things he tells dealers about manufacturers' CSI scoring:
“First, if you really want to know what your customers think about your business, ask them yourself.
“Second, realize that factory CSI surveys are intended for only one purpose: to micro-manage your business.
“Third, you will never get good CSI scores if you don't first have operational competence, meaning your execution exceeds customer expectations and value is greater than price.
“Fourth, good CSI scores require customer training. Your customers must understand that only an ‘excellent’ counts.
“Fifth, all customers must be contacted and reminded to turn in the surveys. You will raise your scores just by increasing your return rate.”
Is this a lot like a game?
“Yes,” says McKean. “And dealers better be good at it because CSI bonus money is now a big share of the bottom line.”
Finally, that Eastern dealer, who had GM on his back, reports his top box CSI scores improved from 30% to 70%. It cost him though.
He says, “We spent about $10,000 per month hiring people and installing processes to call each customer and beg for a top box score.”
Otherwise, he says the “exceptional” way his store, treats customers remains the same. The scores are way up strictly because customers are cajoled.
It convinces him all the more that “the scoring system is totally flawed.”
Steve Finlay is editor of Ward's Dealer Business. His e-mail address is: [email protected]