Is it worth $200 a month to glean behind-the-scenes insights into how a dealership's sales and service employees interact with customers?
At two Davidson Auto Group stores in upstate New York, the answer is yes, based on the benefits reaped from a long-standing secret-shopper program.
"Secret shoppers give us customer insights on an entirely different level," said Jerry Heath, general manager of Davidson Chevrolet-Buick-Cadillac-GMC and Davidson Nissan, both of Watertown, N.Y. "We all think we know what customers want, but that's not always the case."
There are times when store personnel think they handled a customer situation correctly, Heath said, until feedback from the secret-shopper program shows the customer had a very different view of the scenario. The group's Watertown General Motors store, as well as Davidson Chevrolet-Buick-Cadillac-GMC of Rome, N.Y., have used secret shoppers since before Heath joined the company 12 years ago. General Motors used to require dealership participation as part of its reputation-management efforts, Heath said, but participation is now voluntary.
The two Davidson stores, which each sell an average of 75 new and 60 used vehicles per month, stuck with the program. Store managers found it boosted profitability by helping create a better customer experience, which after all is "what drives [consumers] to the dealership," Heath said. He didn't share numbers on how much the program helps the bottom line, calling it difficult to quantify.
But if the stores aren't properly taking care of customers, "we're not going to see them again," Heath said.
"They can find the same product at other stores and get similar pricing ... and loyalty to dealerships is at an all-time low," he said. "So the only way to drive loyalty and repeat business is to take care of that customer and make sure their experience is above what they've experienced in the past at other dealerships."
BestMark Inc. administers the program, sending some of its more than 500,000 trained secret shoppers (all independent contractors) to clients' stores to test customer service.
For dealerships, BestMark suggests four sales and four service visits a month, given the high turnover in the industry. The results help dealership managers understand the best practices that drive customer retention and aids in planning, employee training and increasing operational efficiency, said Dana Stetzer, director of operations at BestMark.
BestMark also recommends secret-shopping phone and Internet salespeople. "It's important to touch people at dealerships in all the different ways a customer typically would interact with them," Stetzer said.
To keep secret shoppers from being recognized as "plants," they're not allowed to go back to the same client for at least three months. Some dealerships — especially those in remote areas with smaller customer bases — prefer a six-month wait. Dealerships sometimes ask BestMark to secret-shop competitors, Stetzer said.
Shoppers are instructed beforehand what to look for, based on input from the client about possible customer service deficiencies. At a dealership sales department, for example, they might be instructed to watch for how long it takes before they're greeted and whether salespeople are upselling properly. Shoppers compile a report that is edited by BestMark experts and submitted to the client, Stetzer says.
For Davidson, the program is aimed at ferreting out customer-service deficiencies. Those provide teachable moments where managers can coach employees and remind them of basic protocols and processes, Heath said. It's not about finding "gotcha" moments — the dealership shares the positives, too.
"We can preach about good attitudes and processes and procedures, but when they hear they did a good job and handled a situation correctly, you get complete buy-in," Heath said, noting that employees know the company uses secret shoppers. "And once you have their buy-in, you've created a positive culture."
Heath said the program's emphasis on catching employees doing things correctly, as well as spotting deficiencies, helps minimize turnover. Among the 25 salespeople at the two GM dealerships, turnover is minimal, with an average tenure of about 10 years.
Davidson pays BestMark $2,367 per dealership per year to have the two GM stores secret-shopped. That covers 54 secret-shopper visits per year per dealership — 27 for sales and 27 for service. The contacts are divided equally among in-store, Internet and phone touchpoints.
It's been a worthwhile investment, Heath said.
"It's not terribly expensive," he said. "Some dealers may not do it because they look at it as yet another expense, but that's short-sighted. I'll gladly pay a couple hundred dollars a month for such valuable feedback."