As Congress and the White House debate the fate of car dealers across the country (recent Detroit Free Press article) it has me thinking why this is one of the first issues dealt with by the auto makers. True, more dealers means the credit available to carry inventory is spread a little thin. Until now this has not been an issue and, really, once the credit markets return to normal this will be a non-factor.
Ultimately the reason may come down to customer service. Although the criteria used to select dealers for cancellation have not been transparent there is much speculation that customer satisfaction index (CSI) scores was a component. That makes sense to me. If market share is below expectations and a direct cause is poor customer service, fix the problem. It could be addressed more assertively with the dealers being given notice that they need to correct their scores to avoid penalties but certainly the manufacturers have every reason to maintain a positive customer image.
It is time to stop the academic debate over whether customer service gains have a direct link to return on investment. Unless a company has a tremendous product advantage service, matters. Customers will not continue paying to be treated poorly. And proactive customer service drives revenue that may otherwise go uncaptured by anyone. Business leaders must make customer loyalty through satisfaction initiatives a priority.
In some cases, the life of the business depends upon it.