What you need to know about customer satisfaction surveys at car dealers

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What you need to know about customer satisfaction surveys at car dealers
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If you’ve bought or leased a new car in the past twenty years, you probably received a post-purchase questionnaire asking you to rate several aspects of your experience with the selling dealership. And as you drove away, you probably left the dealer personnel on their knees, begging you to give their store the highest score on each question.

Have you ever wondered why this program started, how it works and why it’s so ubiquitous? And just how important is your favorable response to a dealership?

Read more: 10 cars you’ll most regret buying

The power of the car dealer survey

When an industry’s reputation has had a foul odor since before the Dead Sea got sick, it needs more than a few sprays of Febreze. 

For several decades, car dealers’ ratings were tied with those of politicians. Comedians would quip, “99% of dealers are giving the rest a bad name.” And since the dealer experience was the face of the industry to consumers, it impacted every auto company negatively.

The carmakers finally got the message in the late 1980s and decided to address the problem the way parents deal with a child’s bad behavior — with tough love, the kind that gets dealers’ attention because it can impact their bottom lines positively (“the carrot”) or negatively (the stick”), depending on their willingness and ability to clean up their act.

So they came up with the customer-treatment rating system — CSI/SSI  (Customer Satisfaction Index/Sales Satisfaction Index) — that automakers give their dealerships. It’s the way automakers gauge how their dealers are treating their customers-in-common, day-by-day and transaction-by-transaction.

You might want to review this article, which reveals that today about 90% of the dollars spent on “dealer cash” are not vehicle-specific, but are allocated to secret, “below-the-line” programs that are tied to multi-month total sales targets and other non-sales objectives that are set dealer-by-dealer. And no one can tell you who’s got what targets, where they stand against them or even when those programs start and end. The potential bonus checks for a decent-sized dealership can range from several hundred thousand to over a million dollars.

These bonus programs can be complex, including targets for sales of both new cars and factory-certified pre-owned vehicles, investments in store upgrades, customer retention percentages, employee training programs, Internet marketing effectiveness, etc. But they are almost always tied to a separate CSI/SSI element, which can be either a carrot or a stick.

• Dealers with higher CSI/SSI scores are rewarded more handsomely than those with lower ratings (the carrot).

• And those with scores below some threshold level may receive minimal cash bonuses or none at all, regardless of their sales performance (the stick).

So dealers need the highest possible ratings on every attribute. I hear reports like this regularly from customers:

 “Everyone at the dealership was very interested in the customer satisfaction survey. The sales manager, the salesman we worked with and the guy who handed us the keys said, ‘Excellent’ is what we hope we’ve earned. If we didn’t, before you respond, please let us earn an ‘Excellent.’”

“As they handed us the keys, they reminded us to rate them at a 10 on everything because “even a 9 brings us down.”

Some bonus payments can depend solely on those CSI/SSI scores, and they can be substantial.

An old friend’s neighbor is the sales manager at a luxury car store that sells 125 to 150 new cars per month. His neighbor told him: “Sure, we care about the selling price, but we care just as much that our customers give us a 10 (on a scale of 1 to 10) on every question. We make a big deal about that before they leave. Within reason, we’ll give them anything they want — free oil changes, a roof rack, floor mats, whatever — in return for the highest scores. So we get those 10s from everyone, which gets us a check from the factory every month for over $100,000.”

Your responses can also impact the compensation and career of your salesperson. The questionnaires are coded by each vehicle’s identification number, which ties them to one key salesperson. Good scores usually get him or her bonus money. Over time, they’re also used to create a personal CSI/SSI score, which can affect their paychecks and even their future job prospects.

With the big bucks at stake, a poor rating can be very painful.

One female customer I know got a great price on a Honda Accord. But her meeting with the dealership’s finance manager was a nightmare. He tried hard to sell her several things she needed like a moose needs a hat rack. Expensive items, like a $3,000 extended warranty. She felt like steam from his high-pressure pitch was coming out from under his office door, and she refused to buy anything. But she was so turned off by the experience that she barbecued the dealership on that questionnaire.

A few days later, the very upset sales manager called her, saying “We gave you the best deal of the month! Why did you do that to us?” She told him, of course. Why was he so upset? Clearly, her negative response had cost that dealership a lot of money. You can also bet that finance manager had an unpleasant discussion with his boss.

Worth noting: The CSI questionnaire is now a standard practice for dealers’ service departments.

And because consumers have choices about where they spend their money, it’s spreading like wildfire to other product and service categories. We get requests now for good ratings from employees in drug store and supermarket chains, the U.S. Postal Service and even hospitals.

It’s not easy to change a long-term negative about any business.  But the auto industry’s three-decade focus on improving the way  its dealers treat customers has had a significant positive impact.

Lee Iacocca is the legendary auto executive who spearheaded the development of the Ford Mustang in the 1960s and revived the Chrysler Corporation as its President and CEO in the 1980s. When he retired at the end of 1992, one of the last things he said as he walked out the door was, “It’s a helluva pass we’ve come to when we have to pay our dealers to be nice to their customers.”  

Well, Lee, adopting an aggressive CSI program was one of the best decisions you ever made. Good for consumers. Good for Chrysler. Good for your industry. 

Here’s living proof: I started this little information boutique in the early 1990s. Through April of this year I’ve had 136,436 customers, and not one of them has reported having a dealer pull any kind of “scam” on them. (I’ll add, modestly, that my customers are so well prepared to take total control of the negotiating process that no dealer would dare to mess with them.) 

Read more: What to do with your money when you get your first real job

 

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James Bragg About the author:
James Bragg has been a full-time consumer advocate/activist for over 20 years as the day-to-day, hands-on founder/manager of FightingChance.com, a national information service that’s helped over 130,000 consumers buy or lease a new vehicle for the lowest price. His latest book is a revised edition of Letting the Cat out ...Read more
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