Service Managers - Service Sales & Customer Retention DG ...training.suzukiauto.co.za/.../Aftersales/Level1_Bronze/ServiceManager/smcr.pdfCustomer Relationship Management Service Sales

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Service ManagersService ManagersService ManagersService Managers

Service Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer Retention

Service Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer RetentionIntroduction

Due to the increased complexity of service and repairprocedures and the ever changing and increasingincreasingincreasingincreasingcustomer expectations we can no longer use the“thumb suck” method during the service experience.

In order to offer a professional service to ourcustomer in a standard manner, we need to nowrealise and accept the fact that change is inevitableand that we need to look at doing things differentlyand better.

Introduction

Service Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer RetentionService Sales & Customer RetentionIntroduction

During this e-learning module, we will discuss thematters influencing service sales and the importanceof customer retention.

Introduction

Module

One

Roadmap – Module One


We discuss the following points in this module:• Customer Relationship Management.Customer Relationship Management.Customer Relationship Management.Customer Relationship Management.• Manage Client Relationships to Retain

Customers.• Relationship Strategy.• Managing Customer Satisfaction.• Develop and Maintain a Customer Database.• Develop CRM Based Service Marketing

Strategies.

It is important if we are going to make themost of our opportunities to market service,that we gain a greater understanding ofmarketing as a discipline.

Customer Relationship ManagementCustomer Relationship ManagementCustomer Relationship ManagementCustomer Relationship ManagementService Sales &

Customer

Retention

Introduction

The objectives of module one is to:

• Understand the service marketing mix.• Understand the current business usage in South

Africa, with special focus on the internet.• Discuss the principles of services marketing.


Customer

Retention

Services Marketing Mix

Traditional Marketing Mix:One of the most basic concepts in marketing is the marketing mix, defined as the elements a dealership controls that can be used to satisfy or communicate with customers. The traditional marketing mix is composed of the four P’s.

• Product.• Price.• Place (distribution).• Promotion.

All of these variables are interrelated and depend on each other to some extent.


Customer

Retention

Expanded Mix for Services

Services in general are usually produced and consumedsimultaneously through direct interaction between staffand customers. Because services are intangiblecustomers will often be looking for any tangible cue tohelp them understand the nature of the serviceexperience.

These factors led to the conclusion that additionalvariables needed to be used to communicate tocustomers and that the standardstandardstandardstandard fourfourfourfour P’sP’sP’sP’s werewerewerewere notnotnotnotsufficientsufficientsufficientsufficient whenwhenwhenwhen itititit comescomescomescomes totototo serviceserviceserviceservice.


Customer

Retention

Expanded Mix for Services

In addition to the four P’s, the services marketing mix includes:

PeoplePeoplePeoplePeople....

All human factors that play a part in service delivery and thusinfluence the buyer’s perceptions.

PhysicalPhysicalPhysicalPhysical evidenceevidenceevidenceevidence....

The environment in which the service is delivered and where thedealership and customer interact, and any tangible components thatfacilitate performance or communication of the service.

ProcessProcessProcessProcess....

The actual procedures, mechanisms, and flow of activities by whichthe service is delivered, the service delivery and operating systems.


Customer

Retention

Gaps Model of Service Quality

The Gaps Model is a conceptual model that positions the keyconcepts, strategies and decisions in services marketing. Below is aframework of the model to give you an overall familiarity with itscomponents.

Perceived

service

Service delivery

Customer-driven

service designs

and standards

Company perceptions of

consumer expectations

External

communications

to customers

Expected

service

Customer

gap 1

Gap 3

Gap 2

Gap 4

Customer


Customer

Retention


TheTheTheThe CustomerCustomerCustomerCustomer GapGapGapGap

The central focus of the Gaps Model is the Customer Gap, thedifference between customer expectationsexpectationsexpectationsexpectations and perceptionsperceptionsperceptionsperceptions.Expectations are the reference points customers have coming in to aservice experience, perceptions reflect the service as actuallyreceived. The idea is that dealership’s will want to close the gapbetween what is expected and what is received, to satisfy theircustomers and build long-term relationships with them. To close thisall-important Customer Gap, the model suggests that four other gapsneed to be closed. These gaps are the provider gaps.


Customer

Retention


TheTheTheThe ProviderProviderProviderProvider GapGapGapGap

The Provider Gaps are the underlyingunderlyingunderlyingunderlying causescausescausescauses behind the customer gap.Closing these gaps can also be seen as the principles of impressiveCustomer Service Management.

Gap 1 – Not knowing what customers expect.Gap 2 – Not selecting the right service designs and standards.Gap 3 – Not delivering to service standards.Gap 4 – Not matching performance to promises.

In a broad sense, the gaps model says that a service marketer mustfirst close the customer gap, between customer perceptions andexpectations. To do so, the provider must close the four provider gaps,or discrepancies withinwithinwithinwithin the dealership that inhibit delivery of qualityservice.


Customer

Retention

Current Business Orientation in South Africa

The business orientation in South Africa has changedover the years. The bullet points below illustrate thechanges that have occurred.

• The market is now aggressive and competitive, with arelatively equivalent product offering.

• Consumers change from one make or brand of vehicleto another, and often only buy on price, showing nonononobrandbrandbrandbrand loyaltyloyaltyloyaltyloyalty....

• In a dynamic market it is more difficult to retaincustomers currently buying our “brand”.


Customer

Retention

Internet usage plays a vital role in the current business orientation in South

Africa


Customer

Retention

Internet Usage

Impact in the Service Department

The advantage of the internet is:

• Access to a wealth of information.• Increased productivity.• Facilitates communication.• Link with national and international organisations.• Promotion of information on best practice.• Encourages competitive edge of companies.


Customer

Retention

Principles of Customer Service in the Context of the

Motor Industry

Customer Relationship Management refers to the methodologies andtools that help businesses manage Customer Relationships in anorganisedorganisedorganisedorganised way.

• CRM processes that help identify and target their best customers,generate qualityqualityqualityquality sales leads, and plan and implement marketingcampaigns with clear goals and objectives.

• CRM processes that help form individualisedindividualisedindividualisedindividualised relationshipsrelationshipsrelationshipsrelationships withcustomers and provide the highest level of customer service tothe most profitable customers.

• CRM processes that provide employees with the informationinformationinformationinformation theyneed to know their customers’ wants and needs, and buildrelationships between the dealership and its customers.


Customer

Retention

Progression of Marketing

Marketing progression covers massmassmassmass marketing,marketing,marketing,marketing, nichenichenichenichemarketing,marketing,marketing,marketing, databasedatabasedatabasedatabase marketingmarketingmarketingmarketing andandandand CRMCRMCRMCRM. We list thesemarketing items over the next pages.

MassMassMassMass MarketingMarketingMarketingMarketing

• Mass media communication.• Mass channels to deliver dealership’s products.• One way approach, no interactivity.• Marketing plans, primarily product driven, short-

term, implemented by Marketing Department.• Customer data based on sales only.


Customer

Retention


NicheNicheNicheNiche MarketingMarketingMarketingMarketing

• Segmenting your market allows you to target consumers utilisingcriteria like value, lifestyle and perceptions.

• Consumer data from once-off promotions provides a frozendatabase.

• Back office support is lacking and IT and Marketing are notconverged yet.

DatabaseDatabaseDatabaseDatabase MarketingMarketingMarketingMarketing

• Moves towards a consumer driven approach.• Collection and use of behavioural data in your database.• Store all previous sales transactions, contact history.• Enriched database warehousing and mining capabilities develop

more efficient and effective programs.• Efforts to buy loyalty (points selection, discounts, coupons).


Customer

Retention


CustomerCustomerCustomerCustomer RelationshipRelationshipRelationshipRelationship ManagementManagementManagementManagement

• Buying and purchasing habits are in place.• Product or service benefits matched with consumer motivators

and interests.• Developing customers to be ambassadors for your brand.• Communications are personalised, regular & interactive.


Customer

Retention

Service Principles

YouYouYouYou are the Dealership to the Customer

Treat every customer the same way you expect to be treated as acustomer.Project a professional image and positive attitude.Strive to make each customer contact positivepositivepositivepositive....Know all of the services your dealership offers, so you can helpcustomers solve problems.

We outline four principles for consideration in the next two pages.


Customer

Retention

Service Principles

BeBeBeBe ReliableReliableReliableReliable

Honour your commitments.Provide what was promised, on time.

BeBeBeBe ResponsiveResponsiveResponsiveResponsive

Meet or exceed your customer’s expectations.Help your customers promptly and courteously.Follow up with your customers.Minimise disruption to the customer’s work schedule, or to thecustomer’s work site.


Customer

Retention

Service Principles

BeBeBeBe AccountableAccountableAccountableAccountable

Accept personal responsibility for your customer’ssatisfaction.Focus on solving problems.

CommunicateCommunicateCommunicateCommunicate withwithwithwith youryouryouryour CustomerCustomerCustomerCustomer

Show the customer you care.Really listen to your customers.Ask questions.Understand and respond to their specific needs.Offer your customers options for solving problems.Communicate project status/changes to customersregularly.


Customer

Retention

Summary

Customer relationship management (CRM) is a systemsystemsystemsystem formanaging a dealership's interactions with current andfuture customers.It often involves using technologytechnologytechnologytechnology to organise, automateand synchronize sales, marketing, customer service, andtechnical support.

Module

Two

Module Two


We discuss the following points in this module:

• Customer Relationship Management.• Manage Client Relationships to Retain Manage Client Relationships to Retain Manage Client Relationships to Retain Manage Client Relationships to Retain

Customers.Customers.Customers.Customers.• Relationship Strategy.• Managing Customer Satisfaction.• Develop and Maintain a Customer Database.• Develop CRM Based Service Marketing

Strategies.

Manage Client RelationshipsManage Client RelationshipsManage Client RelationshipsManage Client RelationshipsService Sales &

Customer

Retention

Manage Client Relationships to Retain Customers

UnderstandingUnderstandingUnderstandingUnderstanding CustomerCustomerCustomerCustomer LifetimeLifetimeLifetimeLifetime ValueValueValueValue

Customer Lifetime Value (CLV) is the present value of thefuture cash flows attributed to the customer relationship.Use of Customer Lifetime Value tends to place greateremphasis on customer service and long-term customersatisfaction, rather than on maximising short-term sales.

Module two focuses on Customer Lifetime Value,strategic customer retention and discusses ideas on howto manage customer expectations.


Customer

Retention

Calculating Customer Lifetime Value

Customer Lifetime Value (CLV) has intuitive appeal as a marketingconcept, because in theory it represents exactly how much eachcustomer is worth in rand terms and therefore exactly how much amarketing department should be willing to spend to acquire eachcustomer. In reality, it is difficult to make accurate calculations ofCustomer Lifetime Value due to the complexity of and uncertaintysurrounding customer relationships.

The specific calculation depends on the nature of the customerrelationship. Customer relationships are often divided into twotwotwotwocategoriescategoriescategoriescategories....


Customer

Retention


OneOneOneOne

In contractual or retentionsituations, customers who do notrenew are considered "lost forgood". Magazine subscriptionsand car insurance are examplesof customer retention situations.Most models to calculate CLVapply to the contractual orcustomer retention situation.


Customer

Retention


TwoTwoTwoTwo

The other category is referred to as customer migrationssituations. In customer migration situations, a customer whodoes not buy (in a given period or from a given catalogue) is stillconsidered a customer of the dealership because he/she mayvery well buy at some point in the future. In customer retentionsituations, the dealership knows when the relationship is over.

.

The Strategic Focus The Strategic Focus The Strategic Focus The Strategic Focus –––– Customer Customer Customer Customer

RetentionRetentionRetentionRetention

Service Sales &

Customer

Retention

Customer Retention

The increased profitability associated with customer retention effortsoccurs because of several factors that occur once a relationshiprelationshiprelationshiprelationship hasbeen established with a customercustomercustomercustomer.

• The cost of acquisition occurs only at the beginning of arelationship, so the longer the relationship, the lower the cost.

• Account maintenance costs decline as a percentage of total costs(or as a percentage of revenue).

• Long-term customers tend to be less inclined to switch, and alsotend to be lesslesslessless pricepricepriceprice sensitivesensitivesensitivesensitive. This can result in stable unit salesvolume and increases in rand-sales volume.

• Long-term customers may initiate free word of mouth promotionsand referrals.

Continue on next page…

Service Sales &

Customer

Retention

Customer Retention

• Long-term customers are more likely to purchase high marginsupplemental products.

• Increased customer retention and loyalty makes the employees'jobs easier and more satisfying. In turn, happy employees feedback into better customer satisfaction in a virtuous circle.

The Strategic Focus The Strategic Focus The Strategic Focus The Strategic Focus –––– Customer Customer Customer Customer


Building Customer RelationshipsBuilding Customer RelationshipsBuilding Customer RelationshipsBuilding Customer RelationshipsService Sales &

Customer

Retention

Relationship Marketing

The primary goal of relationship marketing is to build and maintain abase of committed customers who are profitable for the dealership.To achieve this goal, the dealership will focus on the attraction,retention and enhancement of customer relationships.

BenefitsBenefitsBenefitsBenefits forforforfor CustomersCustomersCustomersCustomers

ConfidenceConfidenceConfidenceConfidence benefitsbenefitsbenefitsbenefits....

These benefits comprise feelings of trust or confidence in theprovider along with a sense of reduced anxiety and comfort inknowing what to expect.

SocialSocialSocialSocial benefitsbenefitsbenefitsbenefits....

Over time, customers develop a sense of familiarity and even a socialrelationship with their service providers.


Customer

Retention

Relationship Marketing

SpecialSpecialSpecialSpecial TreatmentTreatmentTreatmentTreatment BenefitsBenefitsBenefitsBenefits

Special treatment includes such things as getting the benefit of thedoubt, being given a special deal or price or getting preferentialtreatment.

BenefitsBenefitsBenefitsBenefits totototo thethethethe DealershipDealershipDealershipDealership

One of the most commonly cited benefits of customer retention isincreased purchases over time. As consumers get to know adealership and are satisfied with the quality of its services relative tothat of its competitors, they tend to give more of their business tothe dealership.

•

Influencing Customer ExpectationsInfluencing Customer ExpectationsInfluencing Customer ExpectationsInfluencing Customer ExpectationsService Sales &

Customer

Retention

Customer Satisfaction

MeasureMeasureMeasureMeasure andandandand managemanagemanagemanage customercustomercustomercustomer satisfactionsatisfactionsatisfactionsatisfaction andandandand serviceserviceserviceservice qualityqualityqualityquality

These measurements are needed to track trends, to diagnoseproblems and to link to other customer focused strategies.Examples of these strategies are employee training, rewardsystems, internal process metrics, organisational structure andleadership goals.


Customer

Retention


AimAimAimAim forforforfor customercustomercustomercustomer qualityqualityqualityquality andandandand satisfactionsatisfactionsatisfactionsatisfaction inininin everyeveryeveryevery serviceserviceserviceserviceencounterencounterencounterencounter

Plan for effective recovery. When a service customer have beendisappointed on the first try, doing it very right the second time isessential to maintaining customer loyalty. This implies a need forservice process and systemsystemsystemsystem analysisanalysisanalysisanalysis to determine the rootrootrootroot causescausescausescausesof failure so that a redesign can ensure higher reliability.


Customer

Retention


Facilitate adaptabilityadaptabilityadaptabilityadaptability and flexibilityflexibilityflexibilityflexibility.... Customer perceptions oforganisational adaptability and flexibility also create feelings ofsatisfaction or dissatisfaction in service encounters. This suggests aneed to know when and how the system can be adapted, and whenand how to explain to customers why a particular request cannot begranted.

Encourage spontaneity. Memorable encounters occur for customerseven when there is nononono systemsystemsystemsystem failurefailurefailurefailure and no special request.


Customer

Retention

Summary

Help employees cope with problem customers. Managers andcustomers need to acknowledge that the customer isn’t alwaysright, nor will he/she always behave in acceptable ways.Employees need appropriate copingcopingcopingcoping and problemproblemproblemproblem----solvingsolvingsolvingsolving skillsskillsskillsskills tohandle difficult customers as well as their ownownownown feelingsfeelingsfeelingsfeelings in suchsituations.

Module

Three

Module ThreeModule ThreeModule ThreeModule Three


We discuss the following points in this module:

• Customer Relationship Management.• Manage Client Relationships to Retain

Customers.• Relationship Strategy.Relationship Strategy.Relationship Strategy.Relationship Strategy.• Managing Customer Satisfaction.• Develop and Maintain a Customer Database.• Develop CRM Based Service Marketing

Strategies.

Introduction to Relationship StrategyIntroduction to Relationship StrategyIntroduction to Relationship StrategyIntroduction to Relationship StrategyService Sales &

Customer

Retention

Introduction

In module three we discuss the foundations for relationshipstrategies, the basics of brand development and the integrated gapsmodel of customer service.

Customer Lifetime Value as discussed earlier should have youconvinced that it is good business to focus on current customers, tounderstand them and to build strategies around retaining theirbusiness.

Foundations for Relationship StrategyFoundations for Relationship StrategyFoundations for Relationship StrategyFoundations for Relationship Strategy

Service Sales &

Customer

Retention

The foundations needed to begin focusing on retention strategies are:

QualityQualityQualityQuality inininin thethethethe CoreCoreCoreCore ServiceServiceServiceServiceRetention strategies will have little long-term success unless there isa solid base of service quality and customer satisfaction to build on.It must be competitive.

MarketMarketMarketMarket SegmentationSegmentationSegmentationSegmentation andandandand TargetingTargetingTargetingTargetingLearning and defining who the dealership wants to have relationshipswith.

MonitoringMonitoringMonitoringMonitoring RelationshipsRelationshipsRelationshipsRelationshipsA thorough means of monitoring and evaluating relationship qualityover time is another foundation for relationship marketing.

Relationship Strategies


Customer

Retention

Customer Retention Strategies

Because other customers are often present when a service isdelivered, service providers must recognise the need to choosecompatible segments or to ensure that incompatible segmentsare not receiving service at the same time.An example of this strategy in a workshop will be thedifferentiation of fleet customers and individual customers.The segmentation is needed because of their different needsand expectations.

Segmentation


Customer

Retention


Based in part on the evaluation criteriajust discussed, the dealership will selectthe target segment for the service. Thedealer must decide if the segment islarge enough and trending towardsgrowth.As an example, dealers in a metro areaservicing large leasing companies shouldfocus on growing the servicing of theselarge fleets as this is a consistentrevenue stream. It could be that theselarge fleets require servicing outside ofnormal working hours. Depending onfleet size this could be a consideration.

Segmentation

Customer Profitability SegmentsCustomer Profitability SegmentsCustomer Profitability SegmentsCustomer Profitability SegmentsService Sales &

Customer

Retention


Companies may want to treat all customers with superior service, butthey find it is neither practical nor profitable to meet, and certainlynot to exceed all customers’ expectations. In addition tosegmentation of customers, companies are identifying tiers ofcustomers, which differ in current and/or future profitability to thedealership.

The 80/20 Customer Pyramid

Highly

Profitable


Customer

Retention


Virtually all dealership’s are aware at some level that theircustomers differ in profitability, in particular that a minority oftheir customers accounts for the highest proportion of sales orprofit. This is called the “80/20 rule”. TwentyTwentyTwentyTwenty percentpercentpercentpercent ofofofofcustomerscustomerscustomerscustomers produceproduceproduceproduce 80808080 percentpercentpercentpercent ofofofof salessalessalessales orororor profitprofitprofitprofit....

Pareto’s Law says: 80% of all problems can be attributed to 20% of the causes.


Customer

Retention

Customer Appreciation

An obvious but often neglected way to retain customersis showing appreciation for their business. By firstproviding the services as promised, and then thankingthe customer for the business, dealership’s can go a longway toward retaining individual customers.

A good example is a personalpersonalpersonalpersonal letterletterletterletter, addressed to theright person with correct spellingspellingspellingspelling and current titletitletitletitle.AlternativelyAlternativelyAlternativelyAlternatively aaaa personalpersonalpersonalpersonal phonephonephonephone callcallcallcall willwillwillwill havehavehavehave greatergreatergreatergreaterimpactimpactimpactimpact....


Customer

Retention

Insufficient Relationship Focus

A lack of dealership strategies to retain customers andstrengthen relationships with them, will lead tocustomers exploring alternative service providers.

Introduction to Relationship StrategyIntroduction to Relationship StrategyIntroduction to Relationship StrategyIntroduction to Relationship Strategy

Service Sales &

Customer

Retention

Inadequate Service Recovery

It is critical for a dealership to understand the importanceof service recovery, why people complaincomplaincomplaincomplain, what theyexpect when they complain and how to develop effectiveservice recoveryrecoveryrecoveryrecovery strategiesstrategiesstrategiesstrategies for dealing with inevitableservice failures.

Module

Four

Module FourModule FourModule FourModule Four


We discuss the following points in thismodule:


Customers.• Relationship Strategy.• ManagingManagingManagingManaging CustomerCustomerCustomerCustomer SatisfactionSatisfactionSatisfactionSatisfaction....• Develop and Maintain a Customer

Database.• Develop CRM Based Service Marketing

Strategies.

Managing Customer SatisfactionManaging Customer SatisfactionManaging Customer SatisfactionManaging Customer SatisfactionService Sales &

Customer

Retention

Design a Customer Satisfaction Management Program

Start with Customer Expectations

Continue on next page…..


Customer

Retention

Design a Customer Satisfaction Management Program

Customer Expectations continued…


Customer

Retention

Set Standards that will meet Customer Expectations

Standards are SSSSpecific, MMMMeasurable, AAAAchievable, RRRRealistic and TTTTime

bound performance criteria within which service providers canoperate.

Example:

The fixed right first time rate in this department is 98% as measuredon a monthly basis.


Customer

Retention

Approach to Managing Customer Satisfaction - Flow chart


Customer

Retention

Fixing Customer Satisfaction SystematicallyCustomer satisfaction needs constant monitoring. Belowfind a chart to explain top down and bottom upapproach to managing customer satisfaction. This is aneasy and simple process to follow.


Customer

Retention

Summary

“Moments of truth” in your dealership – a powerfulway to think about service delivery and a powerfulway to ensure your customers are satisfied with you

and the SuzukiSuzukiSuzukiSuzuki BrandBrandBrandBrand!

A “moment of truth is…” Any exposure your customer has toyour business where they can makea positive or negative judgement

A unique never to be repeated

opportunity to make a positive

impression on your customer

Module

Five

Module FiveModule FiveModule FiveModule Five




Customers.• Relationship Strategy.• Managing Customer Satisfaction.• DevelopDevelopDevelopDevelop andandandand MaintainMaintainMaintainMaintain aaaa CustomerCustomerCustomerCustomer

DatabaseDatabaseDatabaseDatabase....• Develop CRM Based Service Marketing

Strategies.

Develop and Maintain a Customer Develop and Maintain a Customer Develop and Maintain a Customer Develop and Maintain a Customer

DatabaseDatabaseDatabaseDatabase

Service Sales &

Customer

Retention

Customer Database

In session five we discuss the:• Importance of a customer database.• Importance of data integrity.



Service Sales &

Customer

Retention

Importance of a DatabaseAs the service manager you should be asking the followingquestions with regards your dealer management system (DMS):

• What system is used by your dealership?• What are you currently using the data for?• What else can the data in the system be used for?• Are we capturing the data we can use for marketing purposes?• Is the data up to date?• Who is responsible for the capturing of customer data?



Service Sales &

Customer

Retention

Importance of a Database

We take a look at the functionality of most current DMS. It hasamongst others the following functionality:

• The DMS system can give you up to date information on allcurrent and previous customers that serviced at yourdealership.

• The DMS can be used to segment fleet and private customers.• The DMS can be used to proactively contact customers for

services.• The DMS can be used to contact customers for service

campaigns.

You need to follow up and familiarise yourself with thefunctionality of your DMS system and make use of this veryimportant tool!



Service Sales &

Customer

Retention

Data Integrity

Data integrity is a term used in computer science andtelecommunications that can mean:

• Ensuring data is "whole" or complete.• The condition in which data are identically maintained during any

operation (such as transfer, storage or retrieval).• The preservation of data for their intended use.• The expectation of data quality.

Put simply, data integrity is the assurance that data is consistent andcorrect. Data integrity in a relational database is concerned withaccuracy, correctness, and validity of the data in a database.



Service Sales &

Customer

Retention

Conclusion

Much can be said about updating and maintaining a customerdatabase. This is currently the most underestimated tool when itcomes to using the data effectively for:

• Marketing purposes.• Sales leads.• Service leads.• Parts sales.

Getting to grips and using your DMS to its fullest potential willensure you retain and grow your customer database.

Module

Six

Module SixModule SixModule SixModule Six




Customers.• Relationship Strategy.• Managing Customer Satisfaction.• Develop and Maintain a Customer

Database.• DevelopDevelopDevelopDevelop CRMCRMCRMCRM BasedBasedBasedBased ServiceServiceServiceService MarketingMarketingMarketingMarketing

StrategiesStrategiesStrategiesStrategies....

CRM Based Service Marketing StrategiesCRM Based Service Marketing StrategiesCRM Based Service Marketing StrategiesCRM Based Service Marketing Strategies

Service Sales &

Customer

Retention

Developing Strategies

The objectives of the marketing strategy session is to:

• Analyse the internal and external businessenvironment.

• Develop a SWOT analysis.• Understand the service marketing mix.• Formulate a service product, price, place, people,

process and physical scape strategy that will attracta targeted market and support a marketingobjective.

• Apply suggested steps in the implementation of acustomer relationship management strategy.

CRM Based Service Marketing CRM Based Service Marketing CRM Based Service Marketing CRM Based Service Marketing

StrategiesStrategiesStrategiesStrategies

Service Sales &

Customer

Retention

The External and Internal Business Environments

External Uncontrollable Elements to consider whencompiling a marketing strategy.

PoliticalPoliticalPoliticalPolitical andandandand LegislativeLegislativeLegislativeLegislative• The National Credit Act has impacted on vehicle sales.• The Consumer Protection Act has just come into law.• Environmental pressures are growing on motor retailers.EconomicsEconomicsEconomicsEconomics• Interest rates of 9.0% or less and set to reduce.• Fuel price fluctuations.• Inflation of >6%.• Rand/Dollar +-R10.00 or more on the cards.• Unemployment of 34% and set to grow.



Service Sales &

Customer

Retention

The External and Internal Business EnvironmentsExternal Uncontrollable Elements to consider when compiling amarketing strategy.

TechnologyTechnologyTechnologyTechnology• Increased electronics in motor vehicles.• Internet, SMS and e-mail.• Better quality parts.• Database: One-to-one Customer Relationship-Management.MarketsMarketsMarketsMarkets• Private operators (Cash paying).• Private operators (Allowance buyers).• Small entrepreneurs.• Fleet owners paying on account.• Fleet owners on full maintenance leases.• Transport operators (Where Transport is their core business).• Fleet owners with their own workshops.



Service Sales &

Customer

Retention

The External and Internal Business Environments

External Uncontrollable Elements to consider.

CompetitorsCompetitorsCompetitorsCompetitors• Own-franchise service centers.• Fleet owners own workshops.• Non-franchise service centers.• Engineering shops.• Specialist repair centers.• Auto-electricians.• Backyard mechanics.Physical CharacteristicsPhysical CharacteristicsPhysical CharacteristicsPhysical Characteristics• Deteriorating road conditions.• Congested road conditions.Social TrendsSocial TrendsSocial TrendsSocial Trends• Ergonomics – the need for personal service.• The need for uncompromising convenience.

CRM Based Service Marketing StrategiesCRM Based Service Marketing StrategiesCRM Based Service Marketing StrategiesCRM Based Service Marketing StrategiesService Sales &

Customer

Retention

Service Market SegmentsInternal Controllable Elements to consider when compiling a marketing plan

Consider the common Consider the common Consider the common Consider the common service market segments:service market segments:service market segments:service market segments:

ManpowerManpowerManpowerManpower• The number – enough to do the work.• Skills.• Knowledge.• Attitude.• Motivation.Machinery and equipmentMachinery and equipmentMachinery and equipmentMachinery and equipment• Age.• Suitability.• Condition.Methods/ProcessesMethods/ProcessesMethods/ProcessesMethods/Processes• Up-to-date.• Effective/efficient.• User friendly.


Customer

Retention

Service Market SegmentsInternal Controllable Elements to consider whencompiling a marketing plan

MoneyMoneyMoneyMoney• Targets/Achievement.• Profitability.• Cost Recovery.• Budgets.• Capital.• Liquidity.• ROSI.MaterialsMaterialsMaterialsMaterials• Days parts stock.• Obsolescence.• Quality of the parts stock.


Customer

Retention

Service Market SegmentsInternal Controllable Elements to consider when compiling a marketing plan

Milieu (Setting, Facilities and Milieu (Setting, Facilities and Milieu (Setting, Facilities and Milieu (Setting, Facilities and Location)Location)Location)Location)

• Location

• Access

• Parking

• Signage

• Reception/waiting area

• Drivers facilities/restrooms

• Servicing area

• Wash bay

• Housekeeping

• Dispatch

• ManagementManagementManagementManagement

• Vision/Direction

• Communication

• Governance

• Fairness

• Motivation


Customer

Retention

The SWOT AnalysisYou need to take into account all internal controllables andexternal uncontrollables and create your own SWOT analysis. Belowand exampleexampleexampleexample of a SWOT analysis.A SWOT analysis without ideas for actionsactionsactionsactions is meaninglessmeaninglessmeaninglessmeaningless. You needto put an action plan together to minimiseminimiseminimiseminimise riskriskriskrisk and buildbuildbuildbuild onononon youryouryouryourstrengthsstrengthsstrengthsstrengths.

Based Service Marketing StrategiesBased Service Marketing StrategiesBased Service Marketing StrategiesBased Service Marketing StrategiesService Sales &

Customer

Retention

Service Marketing Mix

The Service Marketing Mix Is made up of the followingelements:


Customer

Retention

Formulating the Service Marketing StrategyProductProductProductProduct DecisionsDecisionsDecisionsDecisions andandandand SurroundingSurroundingSurroundingSurrounding DifferentiatorsDifferentiatorsDifferentiatorsDifferentiators

The product on offer (Service/Repair) is a real source of differentiation.The product itself can be divided into three layers:

• TheTheTheThe corecorecorecore productproductproductproduct: The essential product that will be offered – this isthe base “commodity” that the customer can get from any serviceoutlet. Example: A service, a brake pad replacement, a clutchreplacement, reliable transport.

• TheTheTheThe expectedexpectedexpectedexpected productproductproductproduct: What the customer expects as a minimumwhen buying the core product. Example: Fixed right first time, trainedtechnicians, genuine parts, vehicle ready on time, and a warranty.

• TheTheTheThe addedaddedaddedadded valuevaluevaluevalue productproductproductproduct: The added benefits that go beyond thecustomer’s expectations and create customer delight and loyalty – thedifferentiators.


Customer

Retention

The Three Layers of the Product – in Service

The three layers discussed on the previous page depicted in a graph:


Customer

Retention

Place, People, Process and Physical Scape Considerations

Parts Supply – Critical to Service Delivery

Your parts stocking policy, emergency parts ordering, pre-procurement and pre-picking are all elements that are critical indelivering a service to customers.


Customer

Retention

Promotions and Communications in Service Marketing

A major cause of poorly perceived service is the differencebetween what a dealership promises about a service and what itactually delivers. Customer expectations are shaped by bothuncontrollable and dealership-controlled factors. Word-of-mouthcommunication,,,, customercustomercustomercustomer experiencesexperiencesexperiencesexperiences with other serviceproviders and customer needs are key factors that influenceinfluenceinfluenceinfluencecustomercustomercustomercustomer expectationsexpectationsexpectationsexpectations, but are rarely controllable by thedealership.

However, controllable factors such as dealership advertising,personal selling and the promises made by personnel alsoinfluence the expectations that customers hold for a service.


Customer

Retention

Coordination in Marketing CommunicationIn the past, customers received information about goods andservices from a limited number of sources, often mass marketingsources such as television and newspapers. However, today’sconsumers of both goods and service receive communicationsfrom a far richer variety of sources. These add to the complexityas well as the amount of information received by the consumer.

If the messages conflict, confused dealership images andpromises can result, leading to a difference between whatcustomerscustomerscustomerscustomers expectexpectexpectexpect basbasbasbased onononon thethethethe messagesmessagesmessagesmessages and way theytheytheythey receivereceivereceivereceivein service delivery.ItItItIt isisisis thereforethereforethereforetherefore importantimportantimportantimportant thatthatthatthat thethethethe dealershipdealershipdealershipdealership coordinatescoordinatescoordinatescoordinatesmarketingmarketingmarketingmarketing effortseffortseffortsefforts betweenbetweenbetweenbetween allallallall departments!departments!departments!departments!


Customer

Retention

Types of Marketing Communication

ExternalExternalExternalExternal communicationcommunicationcommunicationcommunicationThis extends from the dealership to the customer and includes suchtraditional communication channels as advertising, sales promotionand public relations.

InteractiveInteractiveInteractiveInteractive communicationcommunicationcommunicationcommunicationThis communication involves the messages that employees give tocustomers through such channels as personal selling, customerservice interactions, service encounter interactions and servicescapes.

InternalInternalInternalInternal marketingmarketingmarketingmarketing communicationcommunicationcommunicationcommunicationThis communication needs to be accurate in order to ensure thatmessages are consistent both among employees and with thosesent through external communications.


Customer

Retention

Communications and the Services Marketing Triangle

The three types of marketing depicted in an illustration.


Customer

Retention

Manage Customer Expectations

Offer choices.Create tiered-value service offerings.Negotiate unrealistic expectations.Improve Customer Education:• Prepare customers for the service process.• Confirm performance to standards and expectations.• Clarify expectations.


Customer

Retention

Manage Internal Marketing Communication

CreateCreateCreateCreate EffectiveEffectiveEffectiveEffective VerticalVerticalVerticalVertical CommunicationsCommunicationsCommunicationsCommunicationsCompanies must give customer contact employees the information,tools and skills to perform successful communication withcustomers. These skills come through training and other humanresource efforts.

CreateCreateCreateCreate EffectiveEffectiveEffectiveEffective HorizontalHorizontalHorizontalHorizontal CommunicationsCommunicationsCommunicationsCommunicationsHorizontal communication is communication across functionalboundaries in a dealership. The difficulty in this task lies in thedifferent goals, philosophies, outlook and view of the customer thatthese departments have.AnAnAnAn equallyequallyequallyequally importantimportantimportantimportant strategy,strategy,strategy,strategy, isisisis totototo openopenopenopen communicationcommunicationcommunicationcommunication channelschannelschannelschannelsbetweenbetweenbetweenbetween salessalessalessales andandandand operationsoperationsoperationsoperations....


Customer

Retention

Manage Internal Marketing Communication

CreateCreateCreateCreate CrossCrossCrossCross----functionalfunctionalfunctionalfunctional TeamsTeamsTeamsTeams

Involve employees in cross-functional teams to align their jobs withend customer requirements. For example, if a team was workingon improving customer communication, sales as well as parts andservice employees should be included in the team.


Customer

Retention

Suggested Steps in Applying CRM

In developing a customer relationship management plan, youneed to consider several issues and take certain steps.

1. Identify the customer base. Both individually and on an80/20 basis.

2. Develop shared values and vision for relationship marketing.3. Develop a strategy for building relationships with customers.4. Develop a structure for building relationships.5. Develop business processes and systems for customer

interaction and relationship building.6. Develop staffing and skills for relationship marketing.7. Develop a management style for relationship marketing.8. Provide access for customers and maintaining contact with

them.9. Reclaim lost customers.


Customer

Retention

Suggested Steps in Applying CRM

Identify Customer BaseIdentify Customer BaseIdentify Customer BaseIdentify Customer Base

Managing your database you need to consider the actions required in terms of:

DMS - this refers specifically to your database in terms of:• Being up to date and accurate.• Information contained.• Person responsible for maintenance.• People who have access.• Identifying the 80/20 customers.• Workshop age analysis by vehicle model.• Maintaining database.


Customer

Retention

Maintain Contact with Customers

Maintain contact with customers by means of:• Vertical communication.• Horizontal communication.


Customer

Retention

Summary

“Marketing“Marketing“Marketing“Marketing isisisis thethethethe managementmanagementmanagementmanagement processprocessprocessprocess responsibleresponsibleresponsibleresponsible forforforforidentifying,identifying,identifying,identifying, anticipatinganticipatinganticipatinganticipating andandandand satisfyingsatisfyingsatisfyingsatisfying customercustomercustomercustomerrequirementsrequirementsrequirementsrequirements profitablyprofitablyprofitablyprofitably....””””Chartered Institute of Marketing – UK

“Marketing“Marketing“Marketing“Marketing isisisis thethethethe processprocessprocessprocess ofofofof planningplanningplanningplanning andandandand executingexecutingexecutingexecutingthethethethe conception,conception,conception,conception, pricing,pricing,pricing,pricing, promotionpromotionpromotionpromotion andandandand distributiondistributiondistributiondistribution ofofofofideas,ideas,ideas,ideas, goodsgoodsgoodsgoods andandandand servicesservicesservicesservices totototo createcreatecreatecreate exchangesexchangesexchangesexchanges thatthatthatthatsatisfysatisfysatisfysatisfy individualindividualindividualindividual andandandand organisationalorganisationalorganisationalorganisational goalsgoalsgoalsgoals....””””American Marketing Association

In ConclusionIn ConclusionIn ConclusionIn Conclusion In

Conclusion

Customer relationship management (CRM) enables dealershipsto tackle operational challenges, including sales decline, highclient attrition, and misalignment between corporate revenuetargets and service revenue policies. The top five tools to usein your CRM implementation plan is:• Client management by using your DMS.• Profitability tracking per client segment.• Compliance to dealer CRM strategy.• Communication.• Customer service improvement.

Thank you for your participation in Managing Service Sales & Customer Managing Service Sales & Customer Managing Service Sales & Customer Managing Service Sales & Customer


End

Documents

Service Managers - Service Sales & Customer Retention DG ...training.suzukiauto.co.za/.../Aftersales/Level1_Bronze/ServiceManager/smcr.pdfCustomer Relationship Management Service Sales