Auto Service World
Feature   December 1, 2003   by Auto Service World

Profit by Reducing Customer Stress, Speaker Tells Aftermarket Forum

“When God is going for half-price,” says retailing speaker Donald Cooper, “price is important. But it is not everything.”

Selling successfully is about reducing the stress of the customer. First, of course, they must have the stress.

“Anybody care to guess how hard it is sell a life insurance policy to a 20-year-old male? It is impossible. But when he is 27 years of age and he has a wife and family, he is concerned about the possibility that he might check out early. Dead people have no stress. They buy nothing.”

Speaking at the 8th Annual Automotive Industries Association of Canada Automotive Forum in Toronto, which featured presentations on technology for business, the market, and customer service, he asked the rhetorical question, how many people work for companies where customers ended up getting more stress from the people serving them?

“I give you money and you give me more stress than I had before? This is goofy, and goofy is another word for stupid,” said Cooper. Cooper, who made his name as an innovative retailer, says that a business must focus on the value it provides customers as determined by the customer, not by the business.

“People have four currencies in their lives,” he says. “Money, time, feeling safe, and feeling special. It is not just money,” he adds, “and these are the things that they value.”

Cooper says that there are only three kinds of value–functional, emotional, and financial–and that feeding this value chain at all levels should be a focus of any business. This is a universal truth.

“[Functional value] is about providing products that actually work. It’s a good place to start. Be open and available when customers need you. Provide the coaching and help they need, to wisely choose and effectively use what you have to sell.

“Do your products and services have the ability to add emotional value to your customers’ lives? Never underestimate the value of emotional connections.

“Financial value has to be number three because it is a function of the other two,” says Cooper. “I pay a good competitive price for the functional and emotional value I get from you.”

He says that businesses often misidentify what customers value most. He related the case of Westin Hotels, which suffered in the wake of 9/11 along with all travel-based businesses. They had thought that high speed Internet connections would be at the forefront, but fewer than 4% of travellers wanted it. High-speed faxes were even less important. A phone in the bathroom did not even rate. “What is that phone for? In case nature calls?

“The most important thing to business travellers was a good night’s sleep.” So Westin invested $30 million in 52,000 beds and marketed it as the Heavenly Sleep campaign.

The reality is, he says, that everybody expects a deal, so many businesses are asking themselves how much they have to cut their prices to get the customers they need.

“They should be asking how much value they need to deliver to get the price they need to get.

“Everybody talks about service, but nobody really defines it. If you can’t define it, you can’t deliver it. Service is simply anything that helps some of your customers’ stress go away. Anything that does not is un-service. We will never take ownership of the customer until we take ownership of their stress.”

Import Rise Critical Issue for the Traditional Aftermarket

The rise in import market share at the car sales level will have an increasingly important impact on the traditional automotive aftermarket, says a leading researcher.

“If you want to be successful in the aftermarket, you had better get into the import market,” says Dennis DesRosiers, DesRosiers Automotive Consultants.

Speaking at the 8th Annual Automotive Forum presented by the Automotive Industries Association of Canada, DesRosiers says that the continuing decline of “The Big Three” market share is predictable.

“It is very difficult to build a case for market share gains for the big three. For the near term they have issues that do not appear easy to solve”–quality issues, resale value, and others–plus there are capacity issues, as domestic manufacturers close plants while import manufacturers build new ones.

“Now how do you manage to sell a vehicle that you don’t build? When the Big Three close plants, and imports build plants, it is a pretty good indicator of where things are going to go in the future.”

While the import share of the vehicle car park rises, the aftermarket continues to suffer from a lower market share of import service. While the traditional aftermarket can expect to get some 75% of repair dollars from domestic vehicles over their life, this figure drops to 50% in import makes, where car dealers retain a greater share of the post-showroom customer dollar.

“There are a lot of aftermarket implications,” says DesRosiers. “If you are tied to the domestic makes solely and you are not on the import side of the equation, you will be a loser.” You may be able to steal market share and grow for a time, but inevitably you will run up against the import market barrier.

“If you don’t have an import program in Quebec and B.C.,” where the highest proportion of car sales are of imports, “you have a problem.”


Young Executive Society Inaugural Conference

The People Equation Tops List of Business Success

Getting the right people in place, taking care of the people who matter most in your life, and yourself, are the keys to success in business, attendees were told at the inaugural Young Executive Society conference in Toronto.

The Young Executive Society is a division of the Automotive Industries Association of Canada.

“Balance, balance, balance. It is so easy for us to get offside,” says Richard Gaetz, president and CEO of Vitran Corporation, a half-billion dollar transportation and logistics company. He relayed a tale of trying to balance his developing personal relationship.

“Your wife and your family have to be the most important in the long term. In the short term, it can be the reverse. In that way the legacy stinks, because we are here for such a short time.

“You can succeed long-term in the extreme, but it is not a very fun legacy.”

A similar philosophy applies to the work environment.

All his senior staff must take their holidays, except him. “It is a tale of hard work and overcoming a series of obstacles,” says Gaetz. “It doesn’t matter what you do, but none of it works if you can’t create an environment for the stakeholders to succeed.”

In the same way, the culture of an organization determines the quality of its customer service.

“It is about relationships, service, and trust. And it is about having your sales force and your management all on the same page,” says Bob Angel, founder of the Gilford Group, who adds that he is unusual in that he is a marketer with a background in finance. Speaking at the Young Executive Society’s inaugural conference, he touched on the details of successful customer relationship management (CRM).

“When I am asked by customers how much I cost, I tell them that I am essentially for free because if I am not, it doesn’t make sense to hire me. CRM has a very bad reputation, and I don’t like to use the term. There are a number of reasons for that, and one of them is that you go out and buy some piece of technology. Technology is the enabler, but it is not the first thing you do.

“Culture is really the key. It is very difficult to get people to move from internally focused to understanding that the customer’s needs come first.

“The real challenge is trying to sustain that. It is very easy to revert to the old mindset, even in the course of a meeting. There is no magic answer. It is just a question of recognition and continual renewal. You need management by example to keep it sustained.”

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