Auto survey: Improving after-sales service helps retain customers

By Marc Lamure, Serge Hoffmann, and Lori Flees  |   2009-2-4  |     NEWSPAPER EDITION

AUTO makers in China are wondering where their next buyer will come from as passenger car sales fell 8 percent in December, the fourth drop in five months.

That's not all the bad news: passenger car sales for the full year witnessed the slowest growth in nearly a decade at 7.3 percent as a weakening economy and tight credit made customers increasingly cautious about spending.

What to do then? Clearly, winning new customers will require car manufacturers to develop more reliable, exciting, and fuel-efficient vehicles. But a recent survey by Bain & Co suggests that auto makers have opportunities to improve their business performance in the short term by focusing more on the customers they already have.

Especially in these tough times for the industry, one of the most powerful techniques for converting buyers into die-hard fans is providing exceptional after-sales service.

Bain & Co recently surveyed more than 1,800 customers who had purchased all the automotive brands sold in the United States.

High among the factors that help sustain customers' loyalty to a brand is a strong after-sales service experience.

Excellent service not only reinforces relationships with customers who already feel loyal to a brand. It can also defuse ill will that causes disaffected customers to bad-mouth the brand.

Ultimately, the biggest influence on customer loyalty and affinity for the nameplate is the quality of the vehicle itself. But a bad after-sales experience can erode it just as quickly.

In the economy they face today, auto makers need to rethink fast how they win and retain every customer they have.


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Marc Lamure, Serge Hoffmann & Lori Flees

Auto makers in China are wondering where their next buyer will come from as passenger car sales fell 8 percent in December, the fourth drop in five months. That's not all the bad news: passenger car sales for the full year witnessed the slowest growth in nearly a decade at 7.3 percent as a weakening economy and tight credit made customers increasingly cautious about spending.

The new year is not expected to bring any relief for harried auto makers in the world's second largest car market as economic growth remains under pressure and consumer confidence continues to be bruised.
Clearly, winning new customers will require car manufacturers to develop more reliable, exciting, and fuel-efficient vehicles, a task that could take years. But a recent survey by Bain & Co. suggests that automakers have opportunities to improve their business performance in the short term by focusing more on the customers they already have. Especially in these tough times for the industry, one of the most powerful techniques for converting buyers into die-hard fans is providing exceptional after-sales service.

Bain & Co. recently surveyed more than 1,800 customers who had purchased all the automotive brands sold in the US to better understand their ownership and sales experience and to assess their brand loyalty. We asked owners to rate, on a scale of zero to 10, how likely they were to recommend their vehicle to a friend or colleague. By subtracting the percentage of "detractors" who gave scores between zero and 6, from the percentage of "promoters" who gave a score of 9 or 10, we can calculate a "Net Promoter Score" (NPS). NPS is already used in dozens of industries to determine how deep loyalty to a particular company runs among its customers, and how it stacks up against its competitors when it comes to customer loyalty.