Most automotive dealers are efficiency-driven, but it does them no good. Their efficiency helps neither customers nor manufacturers. Why?

Diminishing Returns On Service Investments. Most of the time when considering any investment, people ask the same fundamental question, “What is the expected ROI (Return On Investment)?” It is quite easy to understand that always there comes a point where further investment does not generate increasing returns, but diminishing returns. People do not follow this same rationale when evaluating investments in service. Companies want to believe that better service leads to higher levels of customer satisfaction. Thus, continuous increases in investments in service enhancement should be unquestionably good, especially in the automotive industry. True, it is necessary to raise the service standards from ‘average’ to ‘good’, as good is the minimum to stay competitive nowadays. But does it really make economic sense to improve every aspect of an experience from ‘good’ to ‘very good’ or even ‘excellent’, perhaps at the expense of diminishing returns on investment? Does it make sense to eat into the already slim (or negative) profit margins for selling cars? Should dealers continue to suffer from the huge price gaps between their service centers and non-manufacturer service stores?

Current Systems Reinforce Ineffective Behavior. Although there is no substantial proof, it is a widely held belief, especially among auto manufacturers, that if they enhance customer satisfaction, customers will buy more and over a longer period from them. We show you otherwise——some attributes or sub-processes within an experience may be important in creating high levels of satisfaction to customers, but not necessarily important in delivering differentiated brand values and driving repeat sales——in the upcoming white papers on MOD™ (Moments Of Differentiation™) and MOB™ (Moments Of Buying™). Even if we assume that there is a strong correlation between satisfaction and loyalty, there are still three critical questions to address in order to enhance genuine customer satisfaction: 1) Do we measure the right things, i.e. are we designing experience-centric satisfaction surveys to reflect the genuine emotions of customers, or just a comprehensive process-centric checklist aimed to improve efficiency? 2) Do we collect accurate data, or just the distorted gaming results generated by the salesmen or dealers in order to get better scores, incentive rebates and inventory priority? 3) Do we act on the results appropriately, i.e. by enhancing the most critical attributes (for customers, dealers and the manufacturer) and not trying to improve every single aspect? Sadly, the conventional satisfaction surveys and approaches drive automotive dealers to focus on efficiency rather than effectiveness.

Measure Effectiveness of Experiences. Without changing your existing approach to measuring satisfaction, you cannot effectively allocate resources and identify X-MOT™ (Moments of Truth @ Experience™). To do so, you may consider to adopt the X-VOC™ (Voice Of Customer @ Experience™) Research Methodology to map the experience process in a natural time sequence with an experience-centric perspective. It will help you to uncover the sub-processes and attributes that affect customer emotions and customer return visits. You will be amazed at how important the five senses are——e.g. the leather smell inside the car, the sound of closing car doors, etc.——in the buying decision made in the showroom; and how clean washrooms and meals provided at service centers influence customers’ satisfaction and their propensity to return to the dealership.