Customer service is outsourced in many businesses.
That fast food chain may be run by a franchisee, not the brand on the building. Your delivery driver might be an independent contractor. The contact center you call with billing questions might be run by an outsourcer.
This creates a challenge for businesses that want to deliver outstanding customer service, but don't directly control the people that are delivering it.
The automotive industry is set-up this way. The vast majority of new cars, trucks, and SUVs are sold through a network of franchised dealerships.
I spoke with Sprina Moon, Senior Manager, Retail Process Improvement for Hyundai Motor America to ask how her company tackles this challenge.
Moon works with Hyundai dealerships to improve the customer sales experience which ultimately leads to better customer satisfaction and loyalty. Her company is doing quite well as Hyundai has been ranked #1 in customer loyalty for seven years in a row.
Q: How important is customer-focus to the success of Hyundai's dealerships?
"Hyundai typically offers more value than our competitors. What I mean is that for the same dollars or less you get a Hyundai vehicle with more options than the competition, so we should generally win if customers are looking for a vehicle we offer. But if a customer doesn't trust their salesperson, they will go somewhere else. Most Hyundai customers spend a large amount of time researching the vehicle they are interested in buying so when they get to the dealer, they can tell if the sales person is being less than honest. The thing to think about in this day and age is that most OEM’s [original equipment manufacturers] make good quality vehicles, so what separates the good dealers from the bad ones is how well they do with the customer sales experience and added value of why a customer should buy from your dealership.
"Salespeople don't always realize the customer's buying decision is not just about price. People want to buy where they're treated with respect. Respect of their time and respect of their buying decisions.
"Dealerships don't actually make the bulk of their profit on new car sales margin. They make a large portion of their money from the new car finance and insurance department. Another very important department at the dealership is the service and parts department so you want to start creating a long-term relationship with a customer during the sales process by getting them comfortable with coming to the dealership for their maintenance service needs.
"That first lease or purchased car can lead to many others. Some people lease a new car every two or three years. Even people who purchase a car are likely to come back within about five years to buy their next one."
Q: How do you help dealerships improve customer satisfaction?
"I do a lot of training around sales, product knowledge, and soft skills. In a dealership, soft skills are things like a proper greeting and doing through needs analysis so that the consumer is buying the right vehicle for their needs. I also work with the dealerships' owners and general managers to help them better understand how customer service can impact their bottom line.
"For example, one project I've been working on is identifying buyers who live near a Hyundai dealership, but purchase a vehicle at another Hyundai dealership that's farther away. I can share this data with a dealership's general manager to help him see how a poor customer experience might be costing the dealership sales.
"Another thing I do is share best practices. One thing I share with dealerships is how to create a wow moment when a customer comes in to pick up their new vehicle. The salesperson can put the vehicle on display in the showroom or put a big over-sized bow on it to make them really feel special when the customer comes in for their new vehicle. This can create a lasting impression that makes the customer feel great about their purchase.
"Many of the best practices that I review with the dealer are common sense practical items that we experience every day. Some of the things I ask dealers to think about is their non-dealer experiences like how they get treated at their favorite restaurant or when they go shopping at a high end retailer. The customer experience they get is no different than the way that their customers expect to be treated when they buy or service their car at the dealership.
"I also learn a lot from the dealerships too. Hyundai might have a new program that seems great in theory, but it doesn't work for our dealers for some reason. I can share that feedback with our National office and help to make it better."
Q: What are some of the most important skills that a dealership's salespeople should have?
"Salespeople need to be able to ask the right questions to uncover customer needs. Asking a customer what color car they wanted can backfire if they ask for a specific color that's not available. A better approach is to ask if the customer is looking for a lighter or darker car. This might give the salesperson more options to share.
"One of the biggest and most underrated skills in understanding what your customer vehicle needs are is to not say anything and listen carefully to what your customer is looking for and then ask appropriate open ended questions.
"It's also helpful to be resourceful. The specific vehicle a customer wants might not be on the dealer's lot, but the dealership can often track it down for the customer.
"Customers visit just 1.4 dealerships on average before purchasing or leasing a vehicle, so it's important to create a positive relationship right away. That's where it helps for a salesperson to have the right attitude. You can teach someone with the right attitude how to sell cars."
Q: What's the biggest challenge you face in your role?
"I look young for my age, so sometimes these veteran sales managers and general managers see me and think, 'Why is this young lady trying to tell me how to sell cars?' Some of the really tough ones will ask, 'Have you ever sold a car before?'
"I tell them, 'No, I haven't. But I have a lot of customer information, and that information can help you get more customers to buy from your dealership.' That usually gets their attention. I also worked at our National office building training curriculum that was designed to help our dealers provide a better sales experience.
"Employee turnover is a major challenge for some dealerships, so I try to share some best practices with sales managers. A dealership's sales manager is often someone who was a really good salesperson and got promoted. They might be good at selling cars, but they have not had proper training on how to train and motivate their sales teams."
Q: What have you learned from the automotive industry that you think could help people in other industries improve customer-focus?
"I was talking about this with a dealership's General Manager the other day. He was telling me about an experience he had buying a television where he spent a little more money at one store because he felt they treated him with dignity and respect.
"We discussed how this should be the way his customers felt too.
"It's a helpful exercise. Think about the last difficult experience you had as a customer. The customers who are walking in to do business with you could be you in another environment. You would never want to treat your customers the same way you were treated in that bad experience.
"A lot of dealerships are worried about negative online reviews, but if you treat someone with dignity and respect they won't give you negative reviews. We often see someone buy a car from another dealer but still recommend that dealership to a friend and say, 'They didn't have the vehicle I was looking for, but I think you should give them a try.' People tend to write those negative reviews when they feel disrespected."