MANAGING customers’ expectations has to be one of the biggest issues every business faces.
I’d argue it’s more important than price, intrinsically linked with customer service and one of the hardest things to manage.
Get it wrong and not only could you lose a customer for good, but the damage to your reputation could be devastating. Get it right, and there’s a good chance you’ll win a customer for life.
Dealing with other companies is just as important as the way you deal with customers too. What goes around certainly does come around, and in an industry as small as the automotive one, bad reputations spread fast.
I’ve always run my business with a view to being fair and as helpful as I can to others when they need it. That might mean sometimes going above and beyond that which was agreed in advance, perhaps letting the odd bit of extra work here and there slide, or understanding when a business needs a bit of time to pay a bill.
It’s perhaps for this reason that when I encounter a company that doesn’t act in quite the same way, it sticks in my throat rather painfully. We were recently forced to cancel an event we had booked at a pretty well-known venue.
Circumstances beyond our control meant we couldn’t justify it any more, and having already paid a rather large deposit and given the venue plenty of time to resell the space, I didn’t expect to be hounded for the rest of the agreed fee – especially considering we already host another, similar event at the same venue.
But hound they did, refusing to accept our point of view and demanding yet more money for an event that didn’t happen.
Obviously we weren’t particularly pleased, and I’ll no doubt be looking for another venue very soon for the second event I mentioned. As a business owner, I simply cannot understand this ‘cut their nose off to spite their face’ position.
It got me thinking about the deposits car dealers take for cars. How often do you keep hold of the deposit customers pay you when their circumstances change and they can no longer go ahead?
I’d argue that, yes, keeping hold of the cash they’ve paid you is contractually sound, and they knew what they were getting themselves into, but is it good business practice?
In the long run, will that deposit you’ve banked for not doing anything really be worth more than the goodwill you’ll receive from a customer you’ve let off? Chances are they’ll tell their friends and pass on that positive message to others.
I know I certainly would have if this venue had helped us out. Now there’s not a cat in hell’s chance I’ll put a good word in for them anywhere. In fact, I’ll be doing quite the opposite – positively going out of my way to talk them down, such is the bad taste the whole episode has left in my mouth. Bitter? Me? Yeah, definitely. But that’s human nature.
It all goes back to that managing of customers’ expectations. I’m sure they all know you’ll hang on to their deposit should they pull out of the deal – and I’m sure you’re very careful to explain they’ll lose their deposit too, but what if you told them that but then didn’t follow through?
In terms of customer expectations, you’ll have far exceeded them and the positive impact that’ll have on your brand could be immeasurable.
It’s probably an issue many car dealers are facing right now, but with a twist. You may have seen the news that because of Brexit uncertainties some of the German brands are writing to customers to tell them that if their car arrives after the exit deadline has passed, and is then subject to an additional 10 per cent tariff, they’ll have to pay it.
Porsche is giving customers who ordered after January 17 the chance to either cancel their order or agree to pay more.
Other manufacturers are following suit. At the time of writing this, VW will be doing the same – as I’m sure the rest of the VW Group will – and it’s likely many others will copy them.
I called a few dealers and one who represents BMW said they’d had no direction on this and were selling cars as usual. What happens if those cars ordered then go up in price? Is not telling customers and keeping the order better than having to have that conversation if and when they’re forced to ask them to cough up 10 per cent more?
It goes back to managing expectations – in business, I always play by the mantra of ‘no surprises’.
Be open, be honest and sometimes bend the rules to make your customers’ lives easier. Surely it’s better to have the option of them coming back one day than bad-mouthing your business forever?
James Baggott is the founder of Car Dealer Magazine and chief executive officer of parent company @BaizeGroup, an automotive services provider. He now spends most of his time on Twitter @CarDealerEd and annoying the rest of us.