Straight Talk on Customer Feedback - Management
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SECTION: Management

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Straight Talk on Customer Feedback


Article Date: 06-01-2007
Copyright (C) 2007 Associated Equipment Distributors. All Rights Reserved.

Overcome the obstacles and feedback will be more valuable than ever.

Conventional wisdom holds that one unhappy customer tells 10 to 15 others, while one happy customer tells five. Now that customers have the potential to share their bad experiences via the Internet, damage can quickly spread to an even wider audience. But while some customers vocalize their unhappiness, others will be angry and not tell you.
“If you’re not hearing complaints, you should worry,” says Ron Bjorklund, president of Vermeer North Atlantic, based in Lumberton, N.J.

For many customers, a survey is a more comfortable way to tell you about a problem. Most dealers agree having a system to identify unhappy customers will pay for itself quickly in a business where parts and service performance wins the next sale.

But industry consultants estimate only about 20 percent of construction equipment dealers have a process for obtaining customer feedback and measuring customer satisfaction. So why are so few dealers consistently capturing customer feedback?

A Time-Consuming Process
One answer might be that many dealers find it difficult to capture customer feedback and measure customer satisfaction in-house. Completing survey work can be a time-consuming and labor-intensive process. Often, dealers can’t afford to devote the resources it requires.
“We were doing it a lot of different ways,” says Vermeer’s Bjorklund. “It was a job that nobody wanted to do. Should we send a letter? Make a phone call? Our approach wasn’t right.”

The result: inconsistent feedback.

Wilson Equipment Co., a Case dealer based in Lexington, Ky., spent so much time on their customer feedback process there was little time to analyze the results.

“There’s a lot of manual work involved in downloading all the repair orders and keying the information into surveys,” says Jay Rodes, president of Wilson Equipment. “You need to prepare the letters and send them out; it took people away from responding to the surveys.”

Al Morgan, president of Morgan Business Associates, a consulting and training firm, says dealers have so much on their plates that getting customer feedback is just one more thing they don’t have time for.

Still another reason dealers don’t collect the data could be the fear of finding out what their customers
actually think.

“Some people don’t really want to know,” says Mary Szabo, program manager for Naperville-based Strategic Feedback, a research firm specializing in customer satisfaction research for dealerships.

Outsourcing Customer Feedback
For these and other reasons, outsourcing the customer feedback task has become an economically viable option and dealers are beginning to see the full value of measuring customer satisfaction.

Strategic Feedback, for example, currently tracks customer satisfaction for more than 800 construction equipment and agricultural dealer locations. The company’s automated process extracts data from the dealer’s management system, eliminating all the manual work associated with customer satisfaction surveys. Surveys are sent weekly, and when a questionnaire is returned, it’s immediately forwarded to the dealer electronically.

David Leavitt, CFO of The Victor L. Phillips Co., the Case dealer based in Kansas City, Mo., says he had some initial concerns about the confidentiality of the process.

“Our agreement states that ‘Strategic Feedback will keep all data and client information private’,” says Leavitt, “and we can further encrypt it during transmission to them.”

For Wilson Equipment, it made sense to outsource the survey process.

“The real value is what you do after you get the surveys,” says Wilson Equipment’s Rodes. “We’re not a survey company. We sell and fix construction equipment. I know our folks were spending a lot of time trying to handle the customer feedback, and now they have more time to spend on our core processes.”

Morgan says many dealers would be wise to outsource the survey process.

“Why track something that someone else can come in and do for you,” he says. “With the hard work out of the way, the focus can turn to using the data to improve operations.”

The Voice Of The Consumer
First and foremost, surveys provide customers with an opportunity to voice a complaint or make a suggestion. That’s good for a dealer.

“The feedback we receive gives us an opportunity to respond to an issue that might otherwise not get resolved and turn a bad situation into a good one,” says Marty Amon, controller of Fillmore Equipment, based in Holland, Mich.

“It’s just another way that a customer can contact you,” says Wilson Equipment’s Rodes. “It’s another touch with your customer. And you’re not waiting to discover a problem until 60 or 90 days later when the customer hasn’t paid
their bill.”
While dealers often express the fear of being inundated with complaints, history has revealed that it is probably unfounded. When customer satisfaction is monitored on a continuous basis, dealers typically receive a steady flow of feedback, with just a few issues to be resolved each week.
Leigh Condon, chairman and founder of Strategic Feedback, recommends dealers respond to both positive and negative comments.
“Let the customer know you appreciate the time they took to complete the survey, so they know someone is paying attention,” he says. “It’s important they know the feedback is not going into a black hole someplace. Let your customers know what changes you are making as a result of their feedback.”

Motivate And Reward Employees

Positive comments from customers are a great motivator for employees.
“We like to put our positive feedback in the employee newsletter and post it in the lunch room to let all employees know people do take the time to appreciate good customer service,” says Fillmore Equipment’s Amon.

While some dealers are using positive results in their employee reviews, many caution dealers not to use negative feedback results in a punitive manner.
“If we get a great survey, we ask that the branch manager take the employee out to lunch or give them a gift certificate,” says Stacey Hanson, marketing manager for Briggs Construction Equipment, a Case dealer headquartered in Tampa, Fl, with 27 locations.
In the future, Briggs plans to implement a formal rewards program for employees, based on each branch’s ability to maintain a specific level of customer satisfaction.

Track Progress
The ability to track progress in customer satisfaction was a key consideration for Briggs in outsourcing customer feedback. The dealer wanted to measure the effectiveness of a new company-wide training program. Survey results not only helped the training company identify areas of concern, it also allowed them to quickly assess whether their investment in training was paying off.
Briggs has seen a big improvement across the board in customer satisfaction scores.
The Victor L. Phillips Co. compares customer satisfaction levels among its seven locations and four departments.
“It forces you as a manager to ask the question, ‘Why are we at this level?’” says Leavitt.
“You look for patterns,” says Vermeer’s Bjorklund, “One of the patterns we’ve seen are customers looking for different hours. You take all of these little nuggets and it helps you formulate a plan.”
Consolidation and the growth of multiple-store operations have made it more difficult to know what’s going on at each location. Consistent customer feedback is an excellent solution.
“A vice president of product support can look at financial results for 10 or 15 stores,” says Strategic Feedback’s Condon, “but where are the non-financial metrics to drive improvement in each of the stores? If you don’t have feedback coming in from the customers, you just can’t do it.”
“People have more choices,” says Wilson Equipment’s Rodes. “You constantly have to be selling the value of your dealership.”
Customer attrition should not be ignored and Morgan estimates dealers lose about 10 percent of their customers each year; 65 percent of those who leave, leave for a reason related to customer satisfaction.
“It costs so much to lose a customer,” he says. “It usually takes five years to replace that customer in sales.”

Benchmark It
Also driving interest in customer satisfaction research is the ability to benchmark results against other dealers nationwide. Outsourcing customer feedback is really the only way to know how you compare with other dealers.
“Just looking at your own information doesn’t tell you the whole picture,” says Strategic Feedback’s Condon. “Even if you scored 85 percent on all the key questions, national scores might be 93 percent. You might not know you’re delivering inferior service.”
Fillmore Equipment has created an employee incentive program based on the results of their customer satisfaction scores compared to the John Deere dealer network nationwide. If they beat the overall average, all employees are rewarded.
“The people who are handling the telephone or the parts counter are the ones that have the most effect on how a customer feels about doing business with us,” says Amon. “That is why we involve everybody in the program.”
An analysis of the cumulative results for dealers using Strategic Feedback’s SatisfYd customer satisfaction application provides insight. Service department surveys generate more than twice the number of customer satisfaction issues as parts department surveys. Of more than 38,000 parts surveys returned, 6 percent indicated a level of customer dissatisfaction compared to 13 percent of the 35,000 service department surveys returned.
The Power Is Yours
"This is a relationship industry,” says Victor L. Phillips’ Leavitt, “and if you’re not staying on top of your relationships – if you are not continually satisfying your customers long term – you just won’t have them.”
However, obtaining feedback is just the first step in the process of improving customer satisfaction. Research alone won’t resolve your customer issues or build stronger relations with your customers. The power to improve is in your hands. You must be committed to using feedback to serve your customers better. There usually isn’t just one thing that will result in customer satisfaction gains. Search the comments for little nuggets of valuable information. Real improvements come from solving problems and training your employees.
“Add up what it costs if you lose one of your major accounts,” says Bob Kleman, GM of Salt Lake City-based Deere and Bobcat dealer Scott Machinery, “and it’s easy to cost justify.”

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