The Saturn Difference Creating Customer Loyalty in Your Company by Vicki Lenz

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1 The Saturn Difference Creating Customer Loyalty in Your Company by Vicki Lenz Published by John Wiley and Sons Do you know a Saturn car owner? Chances are that if you ask a room full of a hundred people, you'll find two or three Saturn customers. And do you know what happens when they're asked to share their experiences as Saturn customers? They get a smile on their faces their eyes light up and they can't wait to tell everyone why they are LOYAL customers. In an industry where the average customer loyalty rate hovers around 40 percent, Saturn excels at close to 60 percent a tremendous accomplishment for a company that's only been rolling cars off the asembly line since What really is the Saturn difference? Why do their customers find the experience of doing business with them to be truly special? And, more importantly, how can your business follow in Saturn's footsteps? Marketing expert Vicki Lenz answers these questions and more as she explores how Saturn built its exceptional customer service reputation in her exciting new book, The Saturn Difference. A proud Saturn owner herself, Lenz interviews dozens of enthusiastic Saturn owners to show how any company can apply the Saturn formula to turn one-time customers into repeat-purchasing, loyal clients. Lenz also provides a complete breakdown of the sales process-before, during and after the sale-to demonstrate how a customer's experience should be, for any product or service, and from any size of business. Each chapter of The Saturn Difference covers a different step that companies can take to gain customer loyalty, such as how to create interest, how to help customers feel welcome, and how to solve problems. You'll learn how Saturn does it, what customers think about it, and how you can make the changes necessary to become more customer-focused. Never mind the fact that you're not the president of a major car company. Or even the vice-president of a minor car company. The simple reality is that, whatever your business, you need customers to survive. And all business people will find something useful in The Saturn Difference. Why Saturn as the Role Model? Saturn rightly refers to itself as a "different kind of car company." But Saturn leaders and team members didn't set out to reinvent customer loyalty. Nor do they lay claim to the distinction. In fact, according to Vicki Lenz, what you normally hear around Saturn is "customer enthusiasm," not customer loyalty. Nevertheless, 1 The Business Source All Rights Reserved

2 Saturn is rapidly emerging as THE role model for customer loyalty. In fact, the Saturn ownership experience is now considered by many in the automotive world to be the standard by which loyalty is measured. Five Reasons to Create Customer Loyalty Customer satisfaction programs are weapons that many companies use in fighting for a share of today's marketplace. That's a step in the right direction, says Lenz, but the truth is that customer satisfaction does not necessarily translate into customer loyalty. Research has shown that 60 to 70 percent of customers who defect to the competition felt that they were "satisfied" or "very satisfied" with their previous supplier! The difference between satisfaction and loyalty is that satisfaction is typically concerned only with the initial buying experience, the "how you get it" part, while loyalty is the product of building relationships for the long-term. Here are some of the payoffs: 1. Loyal customers will spend more with you. Profit margins will increase. 2. Loyal customers are less likely to price-shop. 3. Loyal customers serve as a fantastic marketing force, providing the best kind of advertising available: word-of-mouth. 4. Loyal customers will tell you what they like and dislike (yes, this is good: you want to know both). 5. It just plain feels good when you treat people right. The Saturn Difference "The entire Saturn difference is what I like best about Saturn. In particular, I like the way they design, build and sell their cars; empower their workers and care for their customers." Charles Eickmeyer, a Saturn enthusiast. The "difference" at Saturn is a company that emphasizes a "no hassle, no haggle" car buying experience. And a company that empowers employees-employees who enjoy their jobs and who strive to create enthusiastic customers. The difference is a unique partnership between all the people in the Saturn workforce, from assembly-line team members to engineers and retailers. The difference is an organizational structure that is represented by quality circles instead of the conventional hierarchy. The Mechanics of Customer Loyalty 2 The Business Source All Rights Reserved

3 A Saturn team member summed it up pretty well when she said, "This is not rocket science. We're doing a lot of basic, simple things, but what customer loyalty all boils down to is the way you treat people." Well, maybe it isn't quite THAT simple. "Creating customer loyalty," writes Vicki Lenz, "is not a quick or easy process. It takes time and perseverance, not short-term thinking because loyalty is not just about customers. We're talking about principles in the form of core values. Loyalty to a set of values is what enables a business to thrive over time." The following set of five values truly represents the Saturn way of doing business: 1. Commitment to customer enthusiasm 2. Commitment to excel 3. Teamwork 4. Trust and respect for the individual 5. Continuous Improvement One chapter of The Saturn Difference is devoted to an examination of these five values, one at a time. Lenz presents each Saturn value and definition and then offers insightful "how it works" interpretations based on her research and observations of how Saturn does business. Creating Interest Do your customers toot their horns to others about your company's products and services? Enthusiastic, loyal customers will do that for you. And by doing so, they create interest in others. "Just as one advertisement is not enough to move a person to buy," says Lenz, "a single method used to create interest is not enough." Saturn doesn't rely on media advertisements for exposure. In fact, Saturn strongly believes that selling cars is a word-of-mouth business. So why are customers so willing to create interest on Saturn's behalf? Largely because those same customers have experienced the quality and value of the cars. Everybody talks about quality and value these days, but too few companies are actually prepared to deliver on their commitments. Or, even when they are prepared, they seem to go about it the wrong way. It's probably worth mentioning here that Saturn doesn't even have a formal "Quality Department." Instead, they have a series of quality resource teams that are responsible for the development and auditing of quality procedures, quality methods and quality systems. And, since workers have a true partnership with management, they're encouraged to shape the manufacturing process themselves. In turn, it's only natural for them to care more about the product they make. Is this how your company operates? 3 The Business Source All Rights Reserved

4 Saturn also considers to be a very important part of its ability to create customer interest. The company receives between 2,000 and 2,500 messages each month through its web site. Every single one receives a response. A staff of 10 people at Saturn handle all the , and it's a company policy to respond to all questions within 24 hours! Approximately 50 percent of s are requests for information proof, says Lenz, that interest is being created. The big question is: Does the investment in pay off? Well, a Saturn retail facility in Georgia tracked about six car sales in one month that were related to customers getting information through the company web site. Decide for yourself. Making the Buying Process Easier "Saturn didn't act like they were selling the car to me, they let ME decide if I wanted to buy one or not. NO hassles and NO haggling." Eric Penn "No hassle sales" means Saturn retailers are up-front about all the elements of a vehicle's price. "No haggle" means the retailer sticks to a set price. There's no place for dickering because this doesn't fit within the Saturn philosophy. This is an absolutely crucial element in creating the long-term relationships that lead to customer loyalty. Creating a hassle-free sales process for customers begins with a knowledgeable, trained staff. Some employers argue that it's a waste of time to provide too much training for employees because often they won't stay with the company long enough to make the training pay off. Vicki Lenz's answer to that is to quote Zig Ziglar: "The only thing worse that training employees and losing them is not training employees and keeping them." Saturn also prides itself on its consultative as opposed to confrontational sales process. For Saturn, customer consultation means applying the following four steps: 1. LISTEN to your customers. Don't assume, ask. Seek to understand their specific needs and desires. 2. Create an environment of MUTUAL TRUST. Be caring and responsive to customer requests. Be honest and timely. Do not build false expectations. 3. Do what is right for the customer. Stand behind Saturn products and services. 4. MAKE IT HAPPEN. Speed is essential! All of these things are important. Take speed for instance. We live in an "instant' world, and time is precious. Your time is valuable, and so is that of your customer. This means providing prompt and courteous greetings when customers come 4 The Business Source All Rights Reserved

5 calling, and making the buying process easy for them at every opportunity. Even when a customer request really isn't easy, people don't really want to know how much trouble you have to go through to get something done, or how your company's system works. Just do whatever you have to do to handle the request, and don't bother customers with unnecessary paperwork or delays. After the Sale Communication AFTER the sale is where Saturn really shines. And, says Lenz, this is the one area where you can really clobber your competition. Because, unfortunately, this is the point where many businesses stall, sputter and die. As Vicki Lenz interviewed Saturn customers, it became apparent to her that the "little things" were what stuck out in their minds as something special. Remembering the little things are just one way of communicating you still care about your customers after you've taken their money. For example, about two weeks after purchasing a new Saturn, one customer was surprised to find on her doorstep a Saturn "Snack Pack" containing a coffee mug and chocolate chip cookies. The dealer who made this extra effort wasn't following a special company policy or requirement. He was simply acting in accordance with the Saturn culture and values. In this case, the cost of the thank you gift came out of the dealer's own pocket. But sometimes behaving this way is simply the right thing to do. Reading some of these Saturn success stories will probably help you generate a few new customer appreciation ideas that will work for your own business. However, one word of caution is in order here. Lenz stresses the importance of sincerity in your customer appreciation efforts. "If special little things are not done as a sincere part of the way you do business," she argues, "they will appear to be gimmicky marketing ploys. And that will not make for loyal customers." Get Saturnized! Vicki Lenz knows the Saturn way of doing business and creating customer loyalty isn't perfect, but what is? Nobody is suggesting that you become another Saturn Corporation. But that shouldn't keep you from learning more about what has worked for Saturn and it's customers. Because the lessons of The Saturn Difference, well and sincerely learned, will give you many of the tools you need to keep your customers coming back again and again. And who can argue with that? 5 The Business Source All Rights Reserved