Moments of Truth Experience: X-MOT

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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.

4 COMMENTS

  1. Sampson

    You have done us all a favour by suggesting that we should not sinply invest in service, or any other aspect of customer business for the sake of it. Or because management thinks it is a ‘good idea’. Or because competitors are doing it. We should do so because it makes economic sense over the medium to longer-term to do so.

    There is far too much wooly thinking about ‘delighting customers’ and such. Having said that, if my own experience is anything to go by, I suspect that most automotive retailers need to spend more just to reach an adequate level of service. They have a long way to go before they reach the point of diminishing returns.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. MOD… MOB… X-MOT… X-VOC…

    Is there a more systematic approach to deliver positive experience to the customer? Or is there ever a need at all to identify an approach? Experience is in the eye of the beholder. It happens in the customer’s mind. Every customer is unique. No two are alike. Is it realistic trying to develop a system to satisfy all different customer types? Is this what the customers really want?

    Daryl Choy
    Make Little Things Count
    wisdomboom.blogspot.com

  3. Sampson–

    One auto dealer our company recently consulted with did something unique that doubled their sales in 11 months, simply because they changed one process to be more customer-centric.

    Realizing that car-hunting is a time-consuming activity, this client invested in Web-based lead management and CRM systems to begin tracking and identifying clients’ needs while on the phone. Then, the information was passed on in real time to the dealer’s reps, so they had instant visibility when the client would arrive for an appointment.

    Buyers appreciated the extra work that went into tailoring the experience to them, and their sales shot through the roof, because they alleviated a common customer pain of having to waste time going through a sales “pitch” to find vehicles that matched their needs.

    One very minor change in process to focus on the customer, facilitated by the technology, made all the difference.

    -Steve
    InsideSales.com

    See the MIT research study that demonstrates the value of Web leads decreases 1000 percent in the first 24 hours.

  4. Steve

    Thanks for your sharing, this is a good demonstration of Moments Of Truth in Practice.

    Let me share with you a story from one attendee of the CEM Certificate Program.

    By focusing on the X-MOT™ (Moments Of Truth @ Experience™), rather than trying to improve every attributes at the same time, Mr. Mazhar Soorty, CRM Manager of Balubaid Automotive (the authorized dealer of General Motors located in Saudi Arabia, being in automotive industry since 1952), has successfully taken Balubaid to be number one in the region in terms of CSI (Customer Satisfaction Index) for sales, service and the composite scores, in just two years. Seven X-MOT™ are derived which have the highest correlations with the overall satisfaction at showroom and service center respectively. They are identified in the areas of Salesman’s Performance, Test Drive and Delivery Performance (for sales) and Customer Receiving & Write-up Quality, Repair Quality and Delivery Condition (for service).

    To maximize the return on service investments, you ought to apply the 80/20 Rule and focus your limited resources on the few moments that are most important to your customers. Don’t try to improve every attribute.

    Sampson Lee
    The Effective Experience

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