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Service Creates Loyalty

Is there such a thing as loyalty these days? Are the customers simply shopping for price? Does our level of service influence the chances that a customer will order another part from us? I believe it does!


Chad Counselman Viewpoint money
Chad Counselman

It takes years to build a reputation with a customer, yet it can be lost in a matter of a few interactions, if not sooner. We all know this statement is true, yet we don’t train our people to think this way.

Let me explain how two interactions with a new car dealership service department caused us to trade our car in for a car from a different manufacturer. In 2018, we bought a new Volvo XC60 for my wife to drive. We loved the car. It performed well, it had lots of cool technology. We actually decided that it was a better car than the 2017 Mercedes GLC300 that we traded in to buy it.

After zero issues for the first 10,000 miles, it was time for a free oil change. My wife attempted to schedule the oil change only to learn that there were no technicians on duty that week that could change the oil in the car. She scheduled the oil change for the following week when the ONE technician would be back that could change the oil. She arranged for them to provide her with a loaner car while the oil was being changed.

On the day of the appointment, she arrived at the dealership expecting to drop the car off and pick up a loaner. That’s not how it happened. There were no loaners available, even though she had clearly reserved one when she made the appointment. She waited 4 hours in the lobby of the dealership to get a free oil change. She was fuming.

We gave them credit for it and didn’t think too much about it. About two months later, while I was travelling, she had a flat tire and she had the car towed to the same dealership. They didn’t have a tire in stock, but gave her a loaner (she was excited for that fact) and told her that the car would be fixed the following day, once the tire arrived from out of town. She was fine with the plan and went about her normal activities with the loaner car. The tire was delayed in transit and arrived 4 days later! When it arrived, the ONE technician that could install the tire was off and the repair was delayed another day. A weekend passed. She finally got her car back after a FULL WEEK – for a simple tire replacement. After that, we decided that we didn’t want to deal with that dealership again and made a decision to trade the Volvo in towards the purchase of a BMW.

I know that was a long story, but it had to be told. The inability of the service department to service their product resulted in that brand losing a customer. Did you hear that correctly: two interactions with a company steered us away from them and the brand that they represent, even though we were completely satisfied with the car. Lack of Service forces disloyalty.

On the other hand, I recently heard an interview with Horst Schulze, the co-founder of the Ritz-Carlton Hotel, where he spoke about empowering his employees to create brand loyalty. At the Ritz-Carlton, any and every employee is trained to take FULL responsibility for any issue that may arise for the customer. Even the employee that is delivering room service is empowered to do whatever it takes to satisfy a customer – up to $2,000 per room per day. He explained that that very rarely happens – most customers are satisfied by just getting the complaint off their chest. However, he explained that a bottle of wine goes a long way to rectify issues. The Ritz-Carlton understands the value of Loyalty and they have trained and empowered their employees to deliver a service that exceeds the expectations of the customer. They truly understand that Service Creates Loyalty.

Let’s bring these ideas home – to the world of Automotive Recycling. Are you training and empowering your employees, all of them, to address issues for customers? Do your employees pass-off issues to managers? Why? Could you empower them to handle some things immediately? What would that experience do for retaining customers?

What is one customer worth to you over the course of a year? A decade? Let’s run a few numbers, using a few numbers from my operation: 5 parts per month x $240 per part = $1,200 per month in gross sales which adds up to $14,400 per year. At a 40% Cost of Goods, that customer is responsible for $8,640 per year in Gross Profit. With inflation over a decade, the loss of a single customer could cost you as much as $100,000 in Gross Profit over the course of a decade. Let me ask you a question one more time: What are you doing to create experiences for your customers that will result in loyalty? Service Creates Loyalty.