In November of 2012, General Motors implemented a customer loyalty measurement program across its dealer network. The new program will allow the automaker to measure how many customers return to a specific dealership for their next purchase, and how many jump ship to a rival store.
Spearheaded by General Motors Vice President of customer experience and global quality Alicia Boler-Davis, the program provides a clear overview of the competitive dealer landscape and gives GM the ability to compare customer loyalty rates of a particular store to its peers. The program is part of a dealership scorecard offering by R.L. Polk & Co. — a Detroit-based research firm that tracks registrations of new vehicles.
The new initiative allows The General to gleam interesting findings by increasing the level of detail in the information it can access. “Now we’re working with dealers to identify what are the key drivers of retention to identify what are the key drivers of retention as well as defection”, said Davis.
For instance, the scorecards might result in more mystery shopping of the specific dealers that rank below market averages or the more frequent deployment of GM’s field personnel to identify and solve problems in person.
Polk has offered its program to automakers since 2006, but the firm’s director of loyalty management practice Brad Smith says that demand has increased significantly over the last two years, with most automakers today using some version of the service.
The GM Authority Take
To us, the interesting part here is GM’s approach to the loyalty equation. Just a year ago, The General was specifically focused on the loyalty of its brands; now, it’s focusing on a dealer’s ability to retain customers — which in and of itself is the most direct measure of customer retention, since it monitors the metric on the retail level.
As such, it would seem that GM will be able to gleam with great accuracy and confidence interesting patterns of intra-dealer competition — such as the rivalry of stores in a metropolitan area with (perhaps too) many points of sale, or even how far customers are willing to travel to either avoid a specific store, or to score a better deal. Of course, all that leads to other information about store-level management, possible customer service issues, and other items that matter to General Motors as an automaker.
Let’s see how this benefits The General and its dealer network in the long term.