They say that with age comes a lifetime of experience, but they never point out that to take advantage of it, one must have a reasonable memory. Still, I remember the first J.D. Power Customer Satisfaction Survey, not just because I was in the business, but because they surveyed me on the Hondas I had purchased for myself — from myself.
Apparently I was a self-impressed young man, because I gave myself an exceptional score; and Power’s organization duly noted that in our dealership’s totals. Yet despite my ‘handicapping’ of our dealership’s skills with customers, I also remember that when the totals for that particular survey came out, it was reported that nationwide somewhere just below 85 percent of all new car buyers were either satisfied or very satisfied with how their new car purchase was handled.
Some 17 years later I was asked to speak to the Midas dealers convention in Vancouver, Canada, during a turbulent period in that company’s history. While it’s easy to forget now, at the time car manufacturers were moving to stainless steel mufflers in their products; the new ones weren’t going to need replacing regularly, as mufflers had for the previous 100 years. Also, this was a period in which brake pads seemed to do one of two things: Either they were soft and quiet and threw brake dust all over the alloy wheels and didn’t last very long, or else they were harder, worked better, and usually squealed. So Midas Muffler, as it was once known, was about to become simply Midas; and staying in business would mean making customers happy while dealing with all new service issues.
In my speech I said it was time to rethink customer satisfaction surveys and how to treat customers, because we were all doing it backwards and paying attention to the wrong things. I chose that discussion because I found out that Midas Corporation had, you guessed it, somewhere around an 85 percent rate of customers being either satisfied with the last job performed by Midas’ franchised dealers. That’s right, whether it was buying a new car or having brake pads replaced, it seemed that one out of six people were just not happy with whatever transaction was being surveyed.
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More than that, nothing much had changed. Over that 17-year period in the auto industry, dealers had hired corporate shrinks to analyze how a dealership’s staff interacted and delivered for customers. They’d actually used their goodwill accounts, budgeting funds to buy things they hoped would make disgruntled customers happier with their stores. And dealers made their staffs watch In Search of Excellence on PBS or read the book; and yet the percentage of customers satisfied with new car dealers or Midas — or whatever — while moving up or down a point or two, remained mired in that 85 percent area.
Doubt that? J.D. Power’s 2001 Sales Satisfaction Index came out the first week of August that year and it noted that Saturn was once again top dog with its customers when it came to purchasing a new car. (A spokesperson claimed that this was due to their non-negotiation of their prices, which Saturn customers loved; but if any other dealer refused to discount cars, customers walked out on them.) But there were two key statements in that news release from Chris Denove, then listed as a partner with Power and Associates.
First, “Overwhelmingly, and contrary to popular belief, most buyers believe that their selling dealer is honest and courteous.” Huh, imagine that? Second, “… new vehicle buyers overall are very satisfied with their selling dealers, giving them an average rating of 8.5 out of a possible 10.”
There it was again, that same 85 percent satisfaction rating I’d seen 21 years earlier on that first survey. The same thing I had spoken about two years earlier in Vancouver. So my position was rather obvious: “For nearly 20 years we have lived under these CSI surveys, sales satisfaction surveys and so on; and, in spite of spending a great deal of time trying to make some customers like us, to win them over, as it were, spending a fortune on perks for them, nothing has seemed to move that mark more than a point or so.”
Worse, once someone has given you a bad survey, and you try to win them over, that triggers another survey — which typically gets the same predictable response. My suggestion was that we break from this decades-long experience of trying to make unhappy people happy and that instead we spend our energies, time and money on the 85 percent that kind of liked us to begin with.
In reality, we’re ignoring the customers who are predisposed in our favor and instead spending our energies on those who rarely can be won over. That’s like dating in high school, in more ways than one.
Midas management returned to Chicago and looked up their previous scores, and then they called me. They had been shocked to discover that, after years on programs designed to improve their overall customer satisfaction, their actual scores had barely budged at all. But this has nothing to do with J.D. Power, which is a fine organization, or any Midas dealer, or anyone else in the car business: It’s simple human nature, and you can’t change it.
Some people just go through life unhappy and often don’t even know why. We see them in department stores, work with them in our offices, and have them as family members. The reality is, tragically, that some people are only happy when they are being negative; putting someone or something else down helps bring their own self-esteem up. (This is not to say that some extremely poor customer survey scores weren’t completely justified by how a customer was actually treated.)
I brought all this up because last week came yet another J.D. Power Sales Satisfaction Survey; but there seem to have been some changes to how it’s prepared. Luxury cars seemed to be listed as one group, mass market cars as another; and coming in at No. 1 for 2017 is Lincoln, with a score of 830 out of 1,000. Or, inserting the decimal point, an 83 percent satisfaction rate. Only now Power states that part of these scores are posted to dealerships that were shopped but rejected before making a purchase, which is why the overall scores seem to be lower than in previous decades.
Power also claims that dealers get pounded in surveys for not making a third follow-up call to a customer, which they claim can add as much as 100 points (10 percent higher with decimal point in place), but that’s out of left field.
The reality is that all of these surveys, whether done by the manufacturer or outside firms — Auto Pacifica, J.D. Power, or the American Customer Satisfaction Index — are all relying on the same things: A customer’s perception of how a transaction went down, and (as far as that survey goes) that the customer’s perception is always right, all the time. But they’re not remembering Oprah’s observation: We train people how to treat us. As humans the response we get tends to be based on how we first interact with another person. Got a big chip on your shoulder? Then people will likely treat you as if you do. On the other hand, an outgoing, friendly and sincere manner will elicit a completely different response from those you interact with.
But in either extreme, survey companies only care about the buyers’ perceptions and treat them as if they are 100 percent accurate 100 percent of the time. By that logic court cases would be so much simpler if only the plaintiff’s attorneys were allowed to speak.
It would be impossible to calculate how much has been done over the past three decades to make the car selling and servicing industries more responsive to customers and their demands. But when the smoke clears, on a national level there’s not that much difference in who’s happy and unhappy in the overall scheme of things. We’ve raised the bar substantially, but nationwide the percentages remain virtually the same.
In the 19 years that have passed since I spoke to Midas dealers in Canada, the world did in fact move over to stainless steel mufflers and quickly to brake pads that no longer left dust all over one’s alloy wheels, didn’t squeal and lasted an incredibly long time. One would think that those two issues alone would have raised the satisfaction rates for new car buyers through the roof, since they saved them a fortune in repairs and maintenance costs.
Instead, those changes did absolutely nothing to increase consumers’ happiness. Why? Because everybody forgot just how bad mufflers and brakes used to be.
© Ed Wallace 2017; Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. Email: email@example.com