In the vehicle sales arena Important Overall performance Indicators (KPI's) are King: each sales statistic achievable is monitored, from buyer visits, test drives, sales, deliveries and finance penetration and so on and now buyer satisfaction. These KPI's are benchmarked to supply an market/ dealer regular of functionality.

It is believed that each and every KPI has a correlative impact on each and every other, in that the extra folks you see, the extra you test drive, the extra you sell: it is as they sales folks say 'a numbers game.'

Now we think that we can reverse the algorithm and make KPI's do the perform. By delivering exemplary buyer service, a buyer becomes a net promoter, advertisement and an advocate for the business.

All we have to do is sit back and wait for the happy buyers or 'Net Promoters' to drive the new buyers, quickly to happy and be transformed into promoters, into our enterprises and reap what has been sowed.

A best self sustaining and scalable enterprise model or have the sales folks been sold a lemon?

What is Net Promoter Score?

In current years there has been an upsurge in the use of Client Satisfaction Surveys and the reliance upon the' Net Promoter Score (NPS)' – none extra so than in automotive makers and retailers.

NPS is a query inside a Client Satisfaction Survey, exactly where the buyer is asked to price on a numerical scale of -10 how most likely they would be to suggest the retailer to a person else.

The resultant score is applied to the following 3 categories:

  • Score of 9-10 Promoters – these who will actively suggest the retailer
  • Score of 7-eight Passive – happy buyers but ambivalent about recommending
  • Score of -six Detractors – unhappy buyers actively dissuading other people

The Theory

At face worth, NPS serves as a extra pertinent barometer of buyer service levels in that the buyer is not just absolutely happy but so elated that they will sing the praises of the retailer at each chance.

On the other hand it has turn out to be relied upon as a Important Financial Indicator of the future monetary wellness of the organisation and an help to the prediction of future sales.

In essence NPS is a 'rebranding' of a theory extended due to the fact expounded by economists in which specific Important information such as employment statistics have a 'procyclic' correlation with the wider monetary wellness of a nation. Basically place, if a nation is generating jobs then there will be an improve in private spending which will be reflected in retail sales.

3 issues:

1. The situation with NPS, at least inside the automotive retail sector is the tendency to manipulate the statistics.

Staff have been coached in how to ask, persuade or even incentivise buyers to 'tick' the 9 or 10 box in an work to mask any true or underlying 'service' troubles and preserve the employee and retailer out of the crucial view of the manufacturer.

2. Even if the retailer does give outstanding service and the delighted buyer does genuinely and voluntarily 'tick' 10, is there definitely a correlation with improved future sales?

It is fair to conclude that a 10 on NPS can't in very good conscience be compared in terms of its worth as an indicator to the creation of an more job in the market place location. There is just no predictive proof to demonstrate the connection, as opposed to the straight forward algorithm of a particular person earns income, they commit income hence retail sales improve.

3. Lastly, why is there no correlative proof or any proof for that matter? Alternatively we as the potential buyer 'how they heard about us?' and then supply them with a drop down list of solutions.

Certainly we would want to apply a extra technical method as utilised in Google + for instance or other social networks, exactly where by means of the energy of technologies the connection amongst buyers is apparent.


Get back to fundamentals.

Let's neglect for a moment the tangible advantage of NPS or not as the case perhaps and think about the original premise behind automotive sales.

It utilised to be stated that a retailer could earn extra profit from a buyer more than the 3 years soon after acquiring their vehicle than was realised from the original sale.

As a result, the concentrate ought to be not on who the buyer can suggest the retailer to, but how often they themselves return to the retailer.

The very good news is we have the capability and fairly uncomplicated technologies to measure true buyer loyalty and harness the information as a true Important Financial Indicator.

Nowhere to hide

Possibly naturally the introduction of 'loyalty cards' would electronically track buyer behaviour and reward them for it, but for causes unknown it has not but created it into dealer groups. Nonetheless, there is a extra rudimentary answer.

1. We downloaded the automobile sales information for a offered year and filtered the data to consist of the acquire date, buyer name, automobile registration quantity and net profit.

two. We cross matched that information with that of the 3 years post acquire to decide if and when the buyers returned to invest in once more.

three. We then cross matched the information with the service and components division to indicate how often the buyers patronised the enterprises.


If the retailer is brave adequate they could get in touch with these buyers that did not ever return soon after their initially stop by and ask them why, to get true insight to buyer service.

On the other hand, the final results from operating this experiment with quite a few retailers, who will of course stay nameless, has been practically nothing quick of shocking.

There is no doubting their determination and capacity to get new buyers and sell lots of automobiles, hours, components and finance but they undoubtedly make it tough perform for themselves.

But in that regard they are a a single trick sales pony and would be finest advised to concentrate a proportion of their efforts in mastering and education about buyer behaviour and retention.