In the mid-1990s, a global automobile manufacturer's research in a major market revealed that it ranked last among its peers on traditional measures of owner satisfaction and loyalty. Company leaders immediately became alarmed because this dismal rating threatened the company's plans to launch a new series of automobiles. Senior management knew this ranking must be reversed, so they worked with consultants at Gallup to develop an ambitious plan to reinvigorate their customer relationships.
The turnaround strategy hinged on one key research finding: Although customers were pleased with their vehicles overall, they were far from happy with their customer experience at the dealerships, particularly when their vehicles needed service. To the customers, it seemed as if each of the dealerships operated independently. Consistency from dealer-to-dealer was practically nonexistent. Company leaders realized that creating consistent service across its dealer network would be key to improving the organization's market position and financial performance.
To assist with the new strategic initiative, corporate leaders hired Gallup to create a customized performance management system that would help the company achieve two critical objectives:
- continuously improve each dealer's ability to meet the company's service standards
- support dealers in fulfilling the company's brand promise
The solution: Gallup recommended measurement using Gallup metrics, plus executive consulting, manager training, and manager intervention activities.
With Gallup's support, the strategic initiative proved successful:
- During the first year of the program, 71% of customers across the dealer network reported that their dealerships had met all the company's service and brand promise standards.
- Two years later, 87% of the client's customers reported perfect conformance to the company's service and brand standards.
Gallup conducted Business Impact Analysis to establish linkages between measurement results and the client's business performance.
- Gallup was able to quantify the return on investment for the client and its dealers. For example, during a 12-month period, higher performing dealers as measured by customer loyalty metrics returned an after-sales profit margin that was on average seven percentage points higher than dealers that delivered a lesser customer experience.
- Gallup was also able to quantify the powerful linkages between the Gallup intervention and return on investment. Over a two-year period, dealers that improved the customer experience increased their profit margins (29%) at more than twice the rate of dealers that did not improve customer experiences (12%).
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