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This Simple Factor May Have the Biggest Financial Impact on Your Dealership in 2017

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2017 is shaping up to be a competitive year in automotive retail.

With many analysts predicting that automotive sales will begin to cool off in 2017, enterprising dealers must take immediate steps to ensure that their stores have a leg up on the competition before the market gets more competitive.

So how exactly do dealers do this? According to Forrester, the answer is simple. The companies that make the Customer Experience (CX) their focus will come out on top.

In a recent report wherein they analyzed companies from every major category, Forrester found that CX has had a major impact on the financial success of companies over the past 6 years. And this trend is only just beginning.

With automotive shoppers becoming more empowered, investing in your dealership’s Customer Experience may be the single most important decision you make in 2017. Here are the three big reasons why your dealership should make CX the number one priority in 2017:

Good Customer Experience Drives Growth

People like doing business with companies that are trustworthy and that make them feel good. Most people know this intuitively, but just how much of a financial impact does good CX make?

To answer this question, Forrester recently released a study titled “The Revenue Impact of CX – 2016.” In analyzing the revenue growth of major companies between 2010 and 2015, Forrester found that companies that provided an exceptional Customer Experience grew their revenue 467% faster than those who didn’t.

The takeaway here is simple: good CX can lead to huge financial gains over the competition. Making the commitment to improve CX at every touchpoint might be the most important thing your dealership does in 2017.

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Good CX Means Higher Retention, Recommend, and Transaction Value

We know that good CX correlates with revenue growth, but how exactly do we go from smiling customers to more money in the bank?

Foresee, a Customer Experience measurement company, studied the impact of good CX on automotive shoppers. What they found was that when customers are highly satisfied with their experiences, they are…

  1. 89% more likely to spend more money on their purchases
  2. 90% more likely to purchase again from the same company
  3. 86% more likely to recommend the company to their friends, family, or colleagues

Key takeaway: when you take good care of your customers, they’ll spend more money, buy from you again, and will sing your praises and drive more referral sales for your dealership. As you can imagine, the effects of good CX compound over time and lead to significant growth over the course of a few years.

Bad Customer Experience Leads to Financial Decline

If good CX leads to a financial advantage, then the opposite must also be true for bad CX. In an earlier study, Forrester found that over a four year period, CX laggards saw their share values decrease by 33.5%, while the S&P 500 average grew by about 14%.

This should come as no surprise. There are so many choices for consumers today, that when they have a bad experience with one company, there’s always a competitor ready and waiting to take advantage. Perhaps even more significantly, consumers who have bad experiences have the means to share their experiences with thousands via social media and online review sites. Over time, these effects can compound, leading to damaged reputation and lost sales.

Key takeaway: dealerships with a poor customer experience stand to lose market share, and as a result will enter into financial decline if fasted with competition that outperforms them on CX.

Conclusion

Automotive shoppers are more empowered than they’ve ever been before, and this trend is showing no signs of slowing down. The dealerships that delight these shoppers with stand-out customer experiences will reap great financial rewards in the forms of higher customer loyalty, higher transaction values, and increased referral sales as a result of positive word-of-mouth. The dealerships that don’t invest in CX risk losing market share to their competition, and ultimately falling behind.

What CX improvements will your dealership make in 2017?