Volvo Cars of North America Inc. is testing a new way of gauging customer satisfaction. Under the test, the company is not tying dealer bonuses to customer satisfaction surveys.
The test applies to Volvo's 18 Texas dealerships. The Texas dealers get 14 percent off sticker prices on new vehicles, while other Volvo dealers have to earn the full discount by reaching customer satisfaction scores and meeting operating requirements.
Volvo chose Texas because a recent legal settlement requires the company to give dealers the discount. In Texas, it is illegal for manufacturers to discriminate among dealers and that includes charging variable prices for new vehicles.
Volvo is using the opportunity to test different survey methods and evaluate dealer performance without the grading system. If Volvo drops the scores for all dealers, it will depart from an approach most of the industry has taken for 30 years. Manufacturers traditionally grade their dealers based on customer surveys. Many pay bonuses are based on the scores.
"Customers have been surveyed to death," says Marti Eulberg, Volvo's executive vice president of sales operations.
She says dealers have put too much emphasis on scores and sometimes try to manipulate the survey results. For example, Eulberg says some salespeople have supplied their own cell phone numbers in place of customer numbers to intercept calls on the customer satisfaction survey.