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What Is Customer Satisfaction In The Automobile Industry?


The ways businesses do to make their customers happy vary from business to business. But what is customer satisfaction in the automobile industry? And how can car dealerships use the strategies to their advantage?

Business owners (or even non-business owners) know the value of customer satisfaction. Without it, they are better off not having any business at all. Customer satisfaction (or CSAT, for short) helps companies increase their chances of gaining more products and sales in the long run. But how different is it when you apply it to the automobile industry, especially in car dealerships, as they are the backbone of the auto industry (personally speaking)?

When it comes to the auto industry, customer satisfaction focuses more on the quality of after-sales and less on the number of products sold. It may sound easy, but it can get tricky. In this post, we will dissect the core foundations of CSAT in the automobile industry.

What Is Customer Satisfaction? And Why Is It Important?

Before we dive into the main topic, let’s have a refresher first. So what is customer satisfaction? Businesses use this gauge to measure how happy customers are when they deal with them. It covers all three main factors: the products, the services, and the overall customer experience. Your customer’s happiness is the lifeline of your business as it shows how good your products hit your customers on the emotional level.

Whether you have a small hole-in-the-wall business or belong to the Fortune 500, you will need CSAT. Why? It’s because consumers will always weigh up their options. And one way for them to do that is to compare their customer experience with you and your competitors. And with everyone on the Internet today, sharing customer experiences are a free market.

Bottom line, customer satisfaction makes or breaks your business. This is how you will know whether your car dealership is flying or about to hit a brick wall. CSAT is needed, especially in these trying times, if you want your car dealership to thrive more. 

Customer Satisfaction In The Automobile Industry

In 2020, Japanese carmaker Honda ranked as the best in customer satisfaction, topping other automobile industry (on selected light vehicle) brands. They got an impressive score of 82. So how did they do it? 

We don’t have an answer to that. But, we can give you an idea of what these carmakers might be following. Regarding customer satisfaction in the automobile industry, here are the usual ways to measure CSAT in the auto industry.

Net Promoter Score ®

Also known as NPS, the Net Promoter Score focuses on measuring customers’ general insight of the business or brand. As a result, NPS is one of the most influential metrics in determining customer satisfaction.

This metric works through surveys, wherein you ask respondents this question, “From a scale of 1 (lowest) to 10 (highest), how likely would you recommend the dealership to a friend or colleague?” You can then group the respondents into three different categories: Promoters (9-10), Passives (7-8), and Detractors (0-6). To determine the Net Promoter Score, subtract the Detractor’s percentage from the Promoter’s percentage.

You can use the NPS for your dealership by asking your sold customers the question above. Then gather all the information to get the score and determine what your customers feel about doing business with you.

Churn Rate

Sometimes people call it attrition rate or customer churn, but it’s more widely known as churn rate. It is the rate of how much customers stop doing business with you. It is used chiefly by subscription-based companies, but it can also be applied to employees leaving a company. Every business should aim to have a higher growth rate than a churn rate.

If people use churn rate for subscription-based businesses and employee retention, how can it be applied to car dealerships? 

You can use the churn rate to determine the number of customers who leave your website at a given time. We cannot stress enough the importance of a website for businesses in this age. So when you have a dealership website and want to get leads from it, you should track it real close.

When you apply a churn rate to your website, you will be able to determine how well your website is doing in retaining customers’ attention.

Loyalty Measurement

Customer loyalty, no matter what your business, is crucial. When you have a handful of loyal customers, you can always expect them to come back, make another purchase, or order the same one again and again. 

You would probably think that getting loyal customers doesn’t apply to dealerships since virtually everyone doesn’t buy a car twice a week. However, it is still one of the most effective ways to gauge customer satisfaction in the auto industry, even up to this day. Yes, people buy cars only once in a while. However, when you convert a customer into a loyal patron, they can also convert their friends and family to do business with you.

Your dealership should have a loyalty program to determine how loyal your customers are. There are a couple of different loyalty program ideas, so choose the one that fits your auto sales business. Then, when you already have it, you can divide the number of active customers in the program by the total number of customers you have.

How To Improve The Customer Satisfaction For Your Business

Competition is high in the automobile industry. That’s why you need to improve your customer satisfaction on every level. The key here is to pay your undivided attention to creating lasting relationships with your customers. Then, the rest will follow. Below are some tips on how to build strong ties with your customers.

Build Customer Profiles To Build Personalized Services

As a business in the automobile industry, you will need to get to know your customers. What do they like? How do they want to interact? In today’s world, more and more customers are expecting to get personalized and relevant services whenever they transact. And you can only do this by creating a customer profile.

To create a customer profile, first, you need to gather as much data available. Then, make sure that you check and verify each piece of data so you can use it. Start with their names, ages, sex, and so on. The more information you have, the better. Then, you can enhance your collected data by sorting them into categories, such as demographics. You can do this independently, but it may take time and effort. However, you can ask for help from a third-party source to do it for you.

Once you have sorted and determined who most of your customers are, you already have a customer profile. You can use the information to personalize your services or create branding and messaging.

Follow Up On Your Customers

One of the most common mistakes business owners make is that they always end their relationship with their customers once they finish the transaction. It shouldn’t be that way, especially in the automobile industry. To keep customers satisfied, you need to follow up with your customers. That’s where the after-sales services come in. Because no matter how many people you attract to buy a car from you, they’ll never return when you don’t follow up.

When you do follow-up, you will make your customers feel special. There’s nothing better than to have your expectations met, even if you made the purchase a few days ago. And when you give that feeling to your customers, they’re more likely to be loyal to your business.

You can do follow-ups by way of phone, email, or text. A simple “how’s our car doing?” will go a long way. Asking for a review is also an excellent opportunity for them to engage on what problems they may have with their purchase, and you would be able to correct it right away. Another way is to ask for reviews through any platform mentioned. This way, you are hitting two birds with one stone; you reach out to them while getting a good review for your social proof.

Customer Satisfaction Is Important In The Automobile Industry

Customer Satisfaction in the automobile industry is essential. But it can be a case of information overload. This post is a good start for you to improve your customer service. Another way to do that is by using a reconditioning software that can help improve your dealership’s recon process.

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