Mark Reuss, who has emphasized improving customer service with his appointment to lead North American operations, estimates every percentage point of the company’s retention rate is worth about $100 million.
Reuss assuming personal role in customer-retention plan.
DETROIT –North America President Mark Reuss wants to overhaul GM customers’ sales and service experience, so he is grabbing a clipboard himself to help revamp its dealer network.
Reuss, who has emphasized improving customer service at GM with his appointment to lead North American operations after the auto maker’s 2009 bankruptcy, estimates that every percentage point of the company’s retention rate is is worth about $100 million.
That’s potentially billions of dollars in additional revenue GM could reap over its customers’ car-buying lifetime, which it could pumped into engineering and designing more products sooner and improving competiveness.
“We’re going through a pretty massive change with our field staff to get them focused on enabling customer satisfaction and retention with our dealers,” Reuss tells journalists during a recent interview here. “Our dealers are really excited.”
Customer satisfaction with Detroit Three auto maker saw declines last year, according to the annual American Customer Satisfaction Index from the University of Michigan’s Ross School of Business.
Cadillac scored among the leaders, but Buick and GMC slumped. Chevrolet gained ground in the survey but still occupies the lower half of the rankings.
Claes Fornell, the study’s author, says GM’s checkered performance could threaten its comeback.
Key initiatives by the auto maker to ratchet up customer satisfaction and retention include training field staff members and dealer personnel at classes taught by Disney Resorts and the Marriott’s Ritz-Carlton hotel chain.
GM more recently hired Ferrazzi Green Light, a consultancy founded by marketing guru Keith Ferrazzi specializing in changing corporate cultures.
Reuss says the trick will be shifting the focus of GM’s field staff away from simply pushing inventory on dealers, something it was forced to do prior to the bankruptcy because the auto maker routinely over-produced to cover its high structural costs.
Top-down communication also must end, he says, a practice epitomized in the past by a ranking executive parachuting into a dealer meeting with that year’s marching orders.
“Someone like me would have come to that meeting and shown a really cool Power
Point slide presentation and said, ‘It’s your job to go do this,’” Reuss says. ‘“A year from now, tell me whether you have done it or not.’ We had a lot of bad behavior, culturally.”
GM could make the service end of the business unnecessarily onerous as well, he says. For example, the auto maker set up a time-consuming audit process for dealership service personnel years ago to prevent overbilling for warranty work.
Only a few dealers would ever commit this offense, but GM instituted the audits across its network anyway. Reuss eliminated the audits last year in a decision he characterizes as a no-brainer.
“Those are things that enable us to serve customers better,” he says. “They are not without (their) car for as long; we get the thing fixed; we get it fixed right; and we don’t have an audit staff walking around looking at this stuff, trying to catch people.”
GM also must repair relations with dealers it threatened to close as part of its restructuring. The auto maker shed hundreds of underperforming stores, spurring controversy involving Washington lawmakers.
Reuss hopes with GM playing the role of enabler instead of detective, it will make dealers better at the sales-and-service game, allowing auto maker a chance to win back their trust and also shot at the revenue potential that comes with keeping customers in its cars and trucks.
The 48-year-old executive has stepped in personally as a GM field representative. He’s part of small group of sales-and-service personnel adopting a batch of particularly poorly performing dealers.
Reuss has responsibility for one store in metropolitan Detroit and expects to take on a couple more before the end of the year. “It’s been really fun,” he says. “My dealer here is a really good guy.”
Reuss says the relationship with the dealer, whom he declines to identify, started by asking for five items that could make him a top performer. Together, they accomplished four of them and are now attacking a way to ease the complexity of new-vehicle financing options, a problem not exclusive to Reuss’ dealer.
Financing options have become complicated since the bankruptcy because they opened up competition between banks inside the dealerships. The auto maker previously did business with one captive finance company, the former GMAC now operating as.
Making sure a customer gets the best possible deal leads to a lot of back-and-forth for the sales staff between the customer and the finance department.
“I don’t know about you, but when I buy a car and someone takes off and comes back, I feel like I’m getting ripped off,” Reuss admits. “It’s a bad feeling. It doesn’t help anyone. If we can fix these (issues), the sales experience will be quite different and the service experience will be quite different.”