Monday, July 30, 2012

Open Letter to all Auto Manufacturers: Get Sincere About Customer Satisfaction

Dear, GM, Ford, Chrysler, Toyota, Honda et al,
Isn’t it about time you “got real” about how your dealers satisfy their customers? I know you pay lip service to this, just like your dealers do. Ask any auto manufacturer CEO what the most important thing “in the world” is and he will say “satisfying our customers”. This is the same verbal assurance every car dealer will give, especially when they’re being interviewed by the media. But in your hearts, you know that profit, market share, and volume are numbers one, two, and three in your books and sincerely satisfying your customers is lucky to be number four.

Now I know you only build the cars and it’s your dealers who sell them to the public. The dealer is your customer and the car buyers are the dealers’ customers. Therefore it must be the dealers’ fault that car buyers rank auto retailers as the least ethical profession, tied with Congressmen and lawyers. I’m going to tell you why that isn’t the case. I’m going to tell you why you bear the ultimate responsibility for why car buyers fear, distrust, and dislike your dealers.

Reason #1: You measure your dealers’ success and reward them primarily by how many cars and parts they buy from you. High volume dealers “can do no wrong” and you look the other way when they resort to unethical advertising and sales practices. I challenge you to show me one high volume dealer whose franchise contract you terminated or didn’t renew based on bad customer satisfaction. What kind of message does that send to all of the other dealers? The message is clearly that as long as I sell a lot of cars, how I do it doesn’t really matter to my manufacturer. Most of my competitors are using sleazy, bait and switch advertising to sell lots of cars; therefore I have no choice but to follow suit.

Reason #2: To save face, you measure your dealers’ customer satisfaction by email and snail mail surveys that you know can be, and are, manipulated by your dealers. With email surveys, dealers can simply “make a mistake” when they record an angry customer’s email address. Or, worse yet, they can fabricate an email address, which comes to the dealership address. When the survey arrives, they rate their dealership 100%. Some manufacturers were forced to recognize the fact that this was being done and scolded the dealers when they traced the IP addresses from hundreds of customers back to the dealership. Scolded dealers now use PC’s at diverse IPs like libraries and employees’ homes. For snail mail and email, dealers offer incentives like a free tank of gas for bringing in a blank survey which the dealer fills out and mails in. Or the car or service salesman simply intimidates the customer into giving the dealers a good score, “If you give me a bad survey, I might lose my job!”

Reason #4: Your compensation plans from the top down are designed to reward only high car and parts sales. In those few compensation plans that do reward high customer satisfaction scores, they work against you because it’s so easy for the dealers to cheat on the surveys. Your employees either look the other way or actually encourage the dealers to cheat. All they care about is their dealers getting high customer satisfactions scores and don’t care or want to know how they do it.

Reason #5: Most auto manufacturer senior executives don’t have a clue about what’s going on in the trenches of car dealerships. They don’t see the unfair, deceptive and even illegal advertising and sales practices. Their vision of what’s going on in the auto retail world is largely from their computer reports which are based on flawed data from manipulated customer surveys. Or, they get their input from big volume dealers who often have the same problem of not really knowing what’s going on in the trenches. Large volume dealers, the heroes of the manufacturers, are usually out of touch just like the senior manufacturing executives. There are two reasons that large dealers and senior manufacturing executives don’t take action to honestly improve customer satisfaction. One reason is that some truly don’t know. The second reason is that they know, but don’t “want” to know because they would lose their “deniability” if it ever comes out.

There are other reasons and I could go on and on but I think five reasons are enough to get your attention. I have two messages for you. The first is for the executive who truly doesn’t know what’s going on in the trenches of your car dealers. Visit several of your car dealerships anonymously. Don’t go to the dealerships near your headquarters around Detroit or Torrance, but out of the area to dealers who never see a senior factory guy. Pretend to buy a car and actually drive your car in for service. You will be shocked, and at last enlightened. My second message is for those senior auto executives who know damned well what’s happening in the trenches, but pretend not to in order to maintain deniability. I’ll speak your language. Sincerely satisfying your dealers’ customers will determine your future success, compensation, and bonuses in the very near future. This is the 21st century and consumers are a lot smarter and demanding then they were in the 20th. They are very sensitive to being ripped off and the only reason they have accepted it this long is that they had no choice. Most car dealers took advantage of them and all manufacturers tolerated it. More dealers will begin to do business the right way because it “works” and you will see their incredible success. If you want to succeed in your position you will make those changes in the way you reward and accept those dealers who treat their customers right and those who don’t.


  1. Interesting article but don't can't some of your points be turned right back around on the dealer? For instance, if sales people are faking email addresses and surveys can't the dealer control his own people? If good customer ratings are a priority of the dealership, wouldn't the dealer use that as a fireable offense?

    And it's IP address, not IPO address. IP = Internet Protocal; IPO = Initial Public Offering. :)

  2. Thanks for your comments and correcting my using “IPO” mistakenly for “IP”. I never have understood why Internet Protocol should mean the PC address of an email, but it does. I guess that's why I can't remember it.

    Your comment that the dealers should be at least equally to blame for bad customer satisfaction is well taken. But the manufacturers do encourage this behavior when they could and should put a stop to it. If the auto manufacturers pressured, punished, and even canceled their dealers as often for bad customer satisfaction as they did for bad sales, there would be no customer satisfaction problem. They won't do this because some of their highest volume dealers are the same ones who treat customers badly and they revere high sales volume. They claim to revere customer satisfaction too, but they knowingly allow phony customer survey numbers to justify their satisfaction with the status quo.


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