4 Keys to Increasing Customer LoyaltyPosted 5/1/2008
By Jason Bertellotti
As the collision repair market becomes increasingly competitive, it is more important than ever for collision repair facilities to use every resource available to attract and retain customers. One powerful tool that shops can leverage is the voice of their own customers. By listening and responding appropriately to customer concerns and compliments, shops can increase customer referrals and repeat business.
It is universally accepted that satisfying customers is essential to long-term success. But is satisfaction alone enough?
Research shows that the power of satisfaction lies within its relationship to customer loyalty. As a rule, “satisfaction” is related to an individual transaction (i.e., collision repair). High satisfaction leads to “loyalty,” which encompasses the customer’s overall experience and relationship with the company.
Loyalty is the real engine for sustained business growth. That being said, satisfaction is both the spark that ignites the engine and the fuel that drives loyalty. Loyal customers feel emotionally connected to the company and act as positive word-of-mouth marketers, wholeheartedly promoting products and services to friends, family members and co-workers.
The score is calculated by subtracting the negative responses (detractors) from the positive ones (promoters). NPS has been widely embraced by corporations as a way to accurately evaluate the link between positive customer feedback and a company’s sales growth.
Effective voice of the customer
Customer satisfaction surveys often cover a variety of topics and in many cases ask too many questions. In general, questions should be limited to those that reveal particularly useful information that shops can take action on to enhance customer loyalty (as reflected by the NPS).
To get the most value from VOC data, it is crucial to fully understand what motivates customers to become promoters. When shops understand the core elements of the collision repair that impact satisfaction the most and take actions to improve their performance in those areas, they can significantly improve their customers’ experience – and loyalty.
Drivers of Satisfaction
Regression analysis showed that keeping customers informed has the greatest impact on loyalty (NPS), followed by on-time delivery, service and quality (see Figure 1). When combined, these transactional satisfaction metrics explain 72 percent of a customer’s willingness to refer a shop to others.
Customers who felt they were kept informed throughout the repair had Net Promoter Scores dramatically higher than those who were not kept informed (79.6 percent vs. -14.8 percent). Likewise, customers whose vehicles were delivered on time had NPS much higher than those whose vehicles were late (82.2 percent vs. 14.1 percent).
The data also confirms that customers expect excellent customer service and quality when they have their vehicles repaired. Although “shop service” and “shop quality” may not have the strongest influence on loyalty (as reflected in NPS), they are still crucial components of overall satisfaction with the repair.
Practical Applications to Improve Loyalty
Collision repair shops face an additional challenge: Unlike repeat-business environments, collision repair does not generally occur frequently within a customer’s lifetime. Repair shops may have only one chance to make customers feel they have received exceptional customer service to the extent that they would not only return in the event of another accident, but also be willing to promote that shop to others.
When customers were asked what the shop could have done to improve service, the most frequent responses alluded to improving communication. Other common responses cited a need for more timely repairs, improved courtesy, kept promises, cleaner vehicles, returning phone calls and issues with rental cars.
Perhaps one of the biggest gaps between customer expectation and reality relates to the quality of the repair. Assuming the repair is completed correctly and meets all safety standards, the key to influencing the customer’s perception about the quality of the repair is for shops to understand how their customers view quality. Most customers lack collision repair expertise, so they can only evaluate quality based on aesthetics. Shops can help customers appreciate the workmanship by explaining the repair process in terms customers can understand and pointing out features that indicate technical quality.
Customer survey comments reflect the customer’s perspective of quality. For instance, when asked what could have been improved about quality, the most frequent comments related to cosmetic elements like paint work, body work, part fit or damage to the vehicle caused by the shop. A thorough final inspection before delivery to the customer is a best practice shops can implement to ensure the job meets customer expectations.
Another opportunity to seal the deal on customer satisfaction comes at the end of the repair, when the clean, repaired vehicle is delivered to the customer. Shops can use this final contact with the customer to reiterate details that indicate the quality of the repair and establish that everything was completed as the customer expected.
When scheduling delivery dates, it is often better for shops to be reasonably conservative in order to delight customers, than to be overly optimistic and risk disappointing them. If late deliveries are a recurring problem, the shop can analyze its processes to identify the common causes of the delays and take corrective action.
Impact of ‘Kept Informed’
It is important for shops to know how and when to communicate with customers. Technologies like cell phones, voice and text messages, e-mail and Web cams make it easier than ever to stay in touch with customers throughout the day and evening. But most often, it’s not better technology that shops need to improve communication, but rather better processes, skills, and/or discipline. Establishing and following a documented procedure for customer communication is critical to consistently meeting communication expectations and ultimately satisfying customers.
Communication is the common thread that weaves through the four primary drivers of customer satisfaction. “Kept Informed” not only rises to the top as the single most powerful factor, but communication is also the key to establishing realistic customer expectations with regard to all four of the drivers.
Even with all the innovations in software, materials and equipment, creating loyal customers still comes down to performing the fundamentals well on a consistent basis. When expectations about being kept informed, delivery time, service and quality are met, customers most often perceive the overall repair experience positively. That positive perception translates into high satisfaction scores and also results in an increased number of promoters who can boost both profits and growth.
Jason Bertellotti is vice president of Repair Solutions at Mitchell International, overseeing all products and services directed specifically to vehicle collision repair facilities. Integrated solutions include AutocheX, Mitchell’s Voice of the Customer performance management group; the UltraMate appraisal suite of products; ABS and ABS Enterprise collision shop management systems; and the National Auto Glass Specifications (NAGS) glass replacement business.
Bertellotti joined Mitchell in 2002 as senior product manager with AutocheX, a position in which he drove the development and implementation of a new reporting engine, firmly establishing his focus on workflow and information solutions. He holds an MBA from the Marshall School of Business at the University of Southern California and a bachelor’s degree from the University of California, Los Angeles. He may be reached at Jason.Bertellotti@mitchell.com.
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