Friday, July 23, 2010

Customer Service. Why Bother?

3 years ago, we purchased a car for my older daughter. As my family has driven Toyotas for many years, we naturally took her to a nearby Toyota dealer first.

Initially, the sales rep was acting friendly and showed us around. Then at one point he asked us if we will be purchasing that very day. As soon as we said no, mentioning that we had just started to look, his attitude suddenly changed. He appeared to lost interest, becoming indifferent–a total turnoff, especially for my daughter.

We then went across the street to the Honda dealer. There the experience was very different. We were asked a similar question as we were being shown around and we gave the same response. Yet this time the sales rep's response, tone and body language were very different.

The sales rep replied, that’s perfectly understandable and he still continued to patiently show us around. As we were leaving, all he said was that if we did decide to buy a Honda, he kindly requested we buy it from them. He further went onto say that if we had any questions at anytime as we were looking around, we ought to feel free to contact him, he'll be glad to answer our questions, and gave us his card. Much better service.

Quality of both cars being nearly equal, we decided to buy the Honda, in which the sales rep's attitude had an important role. We simply felt much more comfortable with the way we were treated by the Honda rep and the dealership overall.

Fast forward 3 years later, we had a similar experience all over again. Same two dealers, different sales reps, similar experience. Our younger daughter too went with the Honda.

In total we spent about US $5o,000 on both cars. More importantly, given the life time value of customers, Honda gained big for I am sure the girls alone will purchase many cars over their life time, and even more expensive ones, as they get established in life. AND as an aside, whenever the conversation comes up in regards to cars, they encourage their friends to buy Hondas too. What a loss to Toyota, much of it due to attitude.

Here’s the kicker. Good service doesn’t cost more and bad service doesn’t cost less. Yet the direction of the paths they set businesses on is vastly far apart. One leads to customer loyalty, growth and profitability while the towards other decline. Therefore, as I see it, building a culture of superior service is what ensures a sustainable competitive advantage.

What are your experiences and thoughts in regards to service?


Anne said...

This is my favorite of all of your blogs. I often have customers who will come to be 6 months or a year, leaving my competitor, only because I live by this daily. Even if someone were never to buy from me, I know that my reputation is known as a respectable one in our community. Sure, price matters but anyone can cut their price. Maintaining a staff that provides good customer service is priceless.
On a side note, I continue to buy my Honda's from the same salesman. ..and I drive to another state just to do so. THAT'S saying a lot for customer service!
Thanks Vinay!

Vinay Kumar said...

So beautiful Anne. Moreover, providing great customer service is not only what truly provides the sustainable competitive advantage for long-term success, it's the right thing to do.

When we give great service, the message we're sending out is we care and that's priceless.

In the end, life is all about service. I serve you, you serve me, we all serve each other. When we truly serve each other from that deep caring place in our hearts, we make the world a better place and it's what brings joy to our lives.

Thanks for sharing.