This afternoon we released the findings of our 2012 Customer Experience Payback Study. With all the buzz around the importance of elevating the customer experience, one can’t help but think….is it worth it?
The study answers that question.
We went back and interviewed customers of five year old vehicles to see what they did when they came back in the market. Did they remain loyal to the brand? To the dealer? Did they defect? We then asked them, based on their overall experience with the dealership they bought their car from, their level of satisfaction. This is what we found:
We wanted to know what the result would be in incremental sales of moving satisfaction up one level, or one box if you will. This means that customers who were Very Satisfied are now Completely Satisfied, and so on. If we did this, we found the following:
We found it would result in 46 incremental sales. At an average gross of $1,401 (according to NADA) this results in a gross profit on the sales side of $64,669. By the same analysis, the boost in service GP is $41,646.
Bottom line – the increase in annual gross profit by elevating the customer experience up one level is $106,315 per year.
So yes, there is a benefit to delivering a better customer experience.
One thing which I didn’t address in the video (since I know it’s already a little long) is the downside of not delivering a good customer experience. That will remain the subject of a future posting. To tease you a little bit, the downside is much more dramatic than the upside.
Thanks for hitting the site and let me know what you think.