Disney comes to the auto industry

An interesting article in The Toronto Star by Tony Van Alphen reporting on the efforts of some auto makers to improve the customer experience at their dealerships. I think this is a long-overdue area for car makers to distinguish themselves from their competitors and to recognize that while the quality of the car itself is important, the before and after-sales experience is arguably equally if not more important to many market segments.

The battleground in Canada’s intensely competitive auto industry has shifted from the assembly plant to Mary Nurse’s store.

At Nurse Chevrolet-Cadillac in Whitby, winning on that battleground starts with a simple “hello” and smile at the door and then careful staff attention to a customer’s specific needs. Every time.

Straight talk on prices and financing follows. Touring the service area and resolving repair concerns quickly without stress comes next. At the end, a staffer thanks the customer for the business. Every time.

And if it’s raining, that staffer would pull out a handy umbrella from a nearby corner so the customer wouldn’t get wet.

Dealerships like Nurse represent one of the few remaining areas where big league automakers can stand out and shine since almost all of them produce quality, durable cars and trucks these days.

Some of them have reached the point where they’re turning to world leaders in customer service like Disney and Ritz-Carlton. Those companies and others are helping automakers change the culture and practices in dealerships – places that have created more than one generation of cynical consumers looking for trust anywhere.

“Everything revolves around the customer now and providing the environment to make a connection with them,” Nurse said during a recent tour of her spacious, clean and bright store. “It’s paying attention to the little things and doing them right every time.”

In the last few years, the veteran dealer has rebuilt her site from the ground up into a spanking new operation with a modern storefront and expansion of repair, maintenance and sales areas. She also jacked up the size of her workforce and armed them with the tools to win customers — and keep them.

General Motors of Canada, which markets the Chevrolet and Cadillac brands, has made the customer experience and relationship its top priority since the biggest restructuring in its history two years ago.

“The customer is the CEO (chief executive officer) here now,” said GM president Kevin Williams. “The best companies in the world put the customer at the centre of everything they do. We have to put the customer right at the centre of our universe.”

Williams said GM’s benchmarking with entertainment giant Disney underlined the “devil is in the details.”

“It means doing the small things right every time and making sure front-line staff is 100 per cent focused on that standard of excellence. We’re going to learn that Disney magic.”

GM and Nurse aren’t the only industry players focusing far more on customers. Dealers across the country and rivals including Whitby Oshawa Honda just down the street have also “imaged” their storefronts, upgraded staff and spruced up service.

No wonder. The significant gap in quality and durability between vehicles from various automakers from a decade ago has dwindled to a level where shoppers have a lot of good choices and it’s difficult to make a mistake. So consumers are looking for better service, less stress and that elusive trust when buying.

“It’s absolutely true,” said Steve Kelleher, president of Hyundai Auto Canada. “The biggest differentiator going forward is how our customers are treated. At the same time, we think we can still separate ourselves from the competition with our ‘fluidic sculpture’ designs.”

“They (customers) are looking for a relationship,” said Al McCormick, vice-president of customer service at Ford Motor Co. of Canada.

Williams acknowledged that over the years, the industry and GM didn’t listen much to consumers about their needs.

“Success with customers means listening and it was something our company was not particularly good at it,” he said. “Frankly, there was some arrogance. We tended to assume that we knew what was best for the customer. That simply doesn’t cut it and the new GM has turned that model inside out.”

Chris Travell, vice-president of automotive research at Maritz Canada, said the industry is learning more from non-auto companies about customer treatment and service after decades of looking inward.

“Most manufacturers are now working on projecting an image of consistency in the look and feel of a dealership,’’ added Travell, who noted companies are using ‘voice of the customer’ data more often.

“We’re seeing the McDonaldization of the car industry with consistent processes to better meet customer expectations.”

Manufacturers are pressing dealerships to make more investments in their stores and increase staff training so sales experiences and service visits are better for customers, which will, in turn, generate move revenues and profits.

In addition to investing more in store upgrades, Ford has also sought assistance and insight from Disney, computer giant Apple and even U.S. fast food restaurant chain Chick-fil-a on how to boost customer service.

Furthermore, McCormick of Ford noted that since the Internet has empowered consumers so much in recent years, his company has refined the skills of sales staff so they find out quickly where a shopper is in the buying process. For example, some shoppers have already conducted extensive research online and are almost ready to buy a car when the step into a store while others are not sure what kind of vehicle fits their needs and budget.

McCormick added Ford staff are working to effectively communicate via e-mail and social media with potential customers. Staff are receiving extra training to properly explain complex technology.

Automakers are also sending more notices to customers to remind them of the need for maintenance and other issues which provide continuing “touch points’ to build a relationship and more business.

While Ford, GM and other automakers have studied the experiences of other companies in customer service improvements, some of them are exploiting internal sources more.

At GM, Marc Comeau, vice-president of sales, service and marketing, revealed the company looked at its own successful world manufacturing system for improving customer service.

“We said ‘let’s not walk away from this,’ ” he noted. “It’s the same principle. You have common processes (actions) and you execute them with every customer, every time.”

Comeau said the initiative with dealers is a little different than controlling processes in an assembly plant because it involves working with more than 400 entrepreneurial business people in stores across the country.

“They also reminded us that some processes were too heavy so we streamlined them,” he added. “But they really understand the value of it. They get it.”

Although GM wouldn’t disclose details of every process in selling because of competitive reasons, Comeau indicated they involve about 12 key steps ranging from standard greetings and encouraging test drives to touring the maintenance and repair areas of a store.

On the service side, staff also needs to follow a series of actions including updates to customers on the status of work orders and full explanations of repairs.

Comeau noted GM has also eliminated layers of decision-making and given more authority to front line dealer staff in handling customer problems promptly to avoid needless anxiety.

For example, Nurse said if a warranty on a customer’s expensive transmission has just expired, staff at her dealership can be more flexible on coverage restrictions and costs and provide answers almost immediately. In some cases, the company will cover the entire expense.

Near the service area, the store’s amenities contrast sharply to the old dealership that her father Bill built. Customers waited in “the dark room,” the size of a bedroom a few years ago, Nurse recalled.

The current customer lounge is the size of the main floor of a small house. It includes a café, internet services, play area for children and a living room section with a large flat screen television, newspapers and magazines. There’s even an adjacent merchandising area where shoppers can buy GM shirts, hats and car trinkets.

More repair bays and a quick service line that changes oil, cleans vehicles and conducts a 22-point check in conjunction with better staff processes have helped to eliminate a major bottleneck.

“In the past, customers waited for three or four hours for an oil change but not anymore,” said Nurse about the much more efficient line. “Now, it’s no more than 29 minutes for the complete service. We know if they’re not completely impressed, they wouldn’t come back or spread the word.”