Expand Your Customer Surveying Beyond The CSI

DMS exec: CSI won’t tell if customer is loyal for long haul. BY JON MCKENNA

In recent years, skeptics have raised a litany of questions with or complaints about automaker-driven customer satisfaction index (CSI) surveys. Too many OEMs, they insist, continue to overemphasize CSI scores in allocating vehicles or scoring incentive programs. The survey forms are too long. Salespeople and service advisors know how to game the system, none-too-subtly encouraging customers to complete a favorable CSI survey. Customers know how to game the system, bargaining for better deals in exchange for their promise of high ratings.

Michael Esposito, president and CEO of Albany, N.Y.-based DMS provider Auto/Mate and a former dealership GM, doesn’t want to eliminate CSI surveys. However, he does argue, publicly and avidly, that scores are being overused and misinterpreted – and that dealers, not manufacturers, must drive reforms.

Given the questions they pose and when they are given to customers (right after a car purchase or service appointment), CSI surveys effectively measure a customer’s satisfaction with a transaction, Esposito said. They don’t provide reliable insights into whether that customer will be loyal to the dealership over the long term and even recommend it to friends and colleagues, although many dealers mistakenly believe so.

Satisfaction Vs. Loyalty

“Customer satisfaction is different than customer loyalty. I can be a very loyal customer but not satisfied” with how the last visit to the dealership went, “or I can be a very satisfied customer but not particularly loyal,” he said. “There is a relationship between the two, but they are still separate.

Auto/Mate “has no horse in this race” as it does not sell software to measure customer loyalty. But the company is a devotee of the net promoter score (NPS) approach, and Esposito is beating the drum at industry conferences for dealers to utilize the instrument.

NPS was originated in the early 2000s by several prominent business authors, consulting firms and academics. It has gradually been gaining toeholds in several U.S. industries. Most NPS surveys work this way:

Ÿ They ask only one question: “How likely are you to recommend this company to a friend or colleague?” Customers respond on a scale of 0 (no way) to 10 (absolutely).

Ÿ Ratings categorize customers as “promoters” (score of 9 to 10, people who are enthusiastically loyal and will keep buying), “passives” (score of 7 to 8, people who are satisfied but not terribly enthusiastic and could be drawn to a competitor’s offer), or “detractors” (score of 6 or below, dissatisfied people who could hurt the business’ reputation by word of mouth).

Ÿ Subtract the percentage of detractors from the percentage of promoters, to get the NPS score. In other words, passives are discarded.

When To Use Loyalty Survey

While some companies ask customers to give an NPS rating right after a recent transaction, Esposito believes dealerships probably should wait for a couple of months given the “emotional” nature of car ownership. At that point, he recommends conducting them with both sales and service customers quarterly. They can be benchmarked against NPS performance for similar industries by doing some basic online research, he said, and businesses should shoot for consistent improvement in scores.

“If I was a dealer, I would start doing this tomorrow, just to get a sense of what is going on with my customers,” he added. “The cost is next-to-nothing to use SurveyMonkey or a half-dozen other survey providers. You don’t have to hire an outside consultant, you can do it all internally.”

So, how many dealers has he seen measuring customer loyalty? “I’ll be honest, I haven’t come across one yet. Dealers are so focused on selling cars that a lot of the time, they lose sight of the big picture.”

Dealerships “absolutely need to use both” CSI and NPS scores. A CSI survey should show whether a particular process tied to car sales or vehicle service needs to be fixed, “but it doesn’t tell you whether the guy is going to come back next time he’s ready to buy a car.”

Esposito does not want to see auto manufacturers start insisting that franchised dealers meet standards for loyalty scores. At that point, the system is subject to the same gaming that has undermined CIS surveys, he said.