A recent study, conducted by Winsby, compares growth metrics for equipment dealers that are conducting customer satisfaction surveys each month with those that are not. The results are based on analysis of data for over 150 equipment dealers. The data include nine years of invoices and customer satisfaction survey results, representing over 500,000 customers and more than 15 million transactions.
Surveys boost your bottom line
The differences in the two groups show that it is definitely advantageous to your bottom line to make sure you are receiving consistent feedback through customer satisfaction surveys. Here is how the two groups compare:
Business metrics are significantly better for dealers that conduct customer satisfaction surveys than for dealers that do not. The retention of customers is 20% higher, the growth in the number of customers is 49% higher, and revenue growth is 123% higher for dealers receiving regular feedback through customer satisfaction surveys, compared to those that do not conduct surveys with their customers.
Correct problems quickly
Why would customer satisfaction surveys create such a huge advantage for an equipment dealer? When surveys are conducted across all geographic areas and all types of purchases – parts, service, rentals and equipment – they allow you to immediately spot any weaknesses in your organization. When you are aware of problems, you can correct them quickly, before they impact more and more customers.
Most customers won’t go to the trouble of complaining about a problem to someone in your organization. They will just take their business to another dealer. But if you call and ask them what they think of your dealership, over 95% of the people contacted will take the survey. They will provide frank responses and, when asked, will elaborate on the reasons behind those responses.
When you are aware of a problem, you can contact the customer to fix the situation, and you can correct it within your organization so it doesn’t affect more customers. If no one mentions the problem, however, it could persist, affecting your business dramatically over an extended period.
Address comments to increase retention
Comments that are provided during customer satisfaction surveys are sometimes more revealing than the actual numerical rating. When customers give a negative comment with a survey, over 30% of them leave within the next 12 months, regardless of the rating they give.
When asked how likely they are to recommend the dealer, on a scale of 0 to 10, with 0 indicating “not at all likely” and 10 “extremely likely,” 75% of a dealer’s customers, on average, rate their experience as a 9 or a 10, a positive rating. Only 20% give a rating of 7 or 8, a neutral rating, and 5% say 0 to 6, a negative rating.
According to the comments they provide, over 30% of the average dealer’s customers are unhappy with their most recent experience, regardless of their rating. A rating of 10 includes 100% positive comments and results in 95% customer retention. Regardless of their rating, an average of 32% of the customers that give negative comments about their experience become lost customers over the next 12 months. Parts issues, staff knowledge and customer service represent 77% of all negative comments. While price represents 9% of these comments, they almost always include a reference to parts, service and/or mismanaged communication.
In contrast, an average of 20% of the customers that give positive comments about their experience with a rating below 10 become lost customers in the next 12 months.
Reaching out to customers to address their comments, positive or negative, makes a big difference in whether they stay or switch to another dealer. Even if their issue isn’t solved immediately, they know you’re aware of it and working on a resolution.
Higher growth with surveys
Dealers with feedback provided by customer satisfaction surveys experience significantly better growth than those that don’t receive this feedback.
Phone surveys provide better information
The average take rate for phone surveys is 97%. If a customer can be reached by phone, they will almost always take a survey, as long as it really does last just a minute or two. The difficulty is reaching someone by phone, so it’s important to have cell phone numbers in your customer records, especially for equipment dealers’ customers. Many of the decision makers are not sitting at desks in an office.
Receiving consistent feedback from email surveys, on the other hand, is not sustainable. The number of respondents tends to decrease dramatically with each month that passes.
Another advantage of phone surveys is the amount of detail that can be obtained if there is some sort of concern. A caller is talking with the customer and will ask questions until the explanation for the customer’s concerns is clear.
Customer satisfaction surveys are an important component of an equipment dealer’s growth. If you aren’t using this method of obtaining customer feedback, it’s time to start!
Debbie Frakes is managing director at Winsby Inc., a market research company that has been conducting customer satisfaction surveys for companies for over 15 years.