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Welcome to NCM's Up to Speed Blog

Do You Know Your Collection CSI?

Written By: Brent Carmichael
Posted on December 13, 2018

When it comes to improving the operations of a BHPH dealership, I like to ask owners one question. “How would your collection department CSI (Customer Service Index/Indicator) measure up to everyone in the BHPH industry?” Most BHPH operators haven’t given it a second thought because there hasn’t been a national BHPH CSI developed. However, this system of monitoring and tracking must be in place to have any hope of future success!

In today’s highly competitive BHPH marketplace, a low CSI will not only cost you money but could literally cost you your entire business. Customer service and satisfaction are important in sales, service, collections, all facets of the business. However, in the recent economic and competitive climate, how the customer is treated during the collection process will set you up for either future success or failure.

The BHPH business is widely recognized, and rightly so, as a collection or risk management business. I often see the service after the sale is neglected or simply ignored in struggling BHPH dealerships. The most successful operators thrive on repeat and referral business, which is a direct result of providing good overall customer service! Those same operators usually experience a better performing portfolio, which, again, is what this business is all about.

CSI Challenges for BHPH Dealerships:

#1: One of the biggest challenges to providing effective collection customer service comes from the top. Some operators still cling to an old school train of thought of “I have already provided service by selling and financing a vehicle for a customer when more than one other dealer said no.” Or the idea that “the customer has signed a contract and that’s where the obligation ends.” These thought processes trickle down and can affect everyone’s attitude in the organization towards their greatest asset, the customer. I’m not saying the customer is always right, but this type of attitude will hamper your efforts to improve referral traffic.

#2: Another sizeable challenge to providing good collection customer service is setting the right tone. The first collection contact usually occurs when a payment is missed, or there is a service issue. Neither of which is particularly positive from the customer’s viewpoint. Too often it is assumed that the customer is either lying in regards to their circumstances or simply trying to get something for nothing. Both scenarios lead to an overly aggressive posture, bullying, or giving ultimatums to try to exert some form of control over the customer. Very rarely does this work effectively in the long run.

How to Improve Your CSI

The key to setting the right tone is getting the customer to first like you. If they like you, they will be more likely to trust you. If they trust you, they will be likely to respect you. Once they respect you, they will be much more likely to accept whatever you have to say whether it’s good, bad, or indifferent. It all begins with listening. We were given two ears and one mouth for a reason. We should listen twice as much as we speak. The like-trust-respect dynamic is instrumental in setting the right tone. Set the wrong tone, and it will be arduous collection task for the length of the note. But rest assured, if you set the wrong tone, you will not have to worry about that customer (or anyone they know) once they are paid off. Because they will be headed elsewhere for their future car purchases.

Referral/Rewards Programs:
There are many ways to develop and foster customer service and satisfaction. Customer rewards programs have proven successful in other industries and are now picking up steam in BHPH. Most everyone has a repeat and referral program, but collection and service reward programs are becoming more prevalent. I can hear those of you on the old school train; “Reward them for doing what they are supposed to do anyway? Never!” In today’s ultra-competitive BHPH market, that may be just what it will take to thrive. Anything to separate you from the competition, provide added value to the customer, and keep them paying you. Whether it is the customer receiving credit for making their payments on time or incentives for keeping up with the regular maintenance of the vehicle, the key is just having something in place.

Effectively Track & Monitor Progress:
After deciding to renew or extend your commitment to customer service and satisfaction, the next step to effectively track and monitor progress, or lack thereof. There are a few ways to do this, but written surveys and call recording services/systems have proven to be the most popular and effective.

Written Surveys:
Written surveys should be simple and concise. Multiple choice and/or number grading are the easiest to track and quantify. An open response can sometimes be helpful, but often are not legible or contain information that lacks much value. Surveys can be done at the time of sale, as the customer pays off, or at the time any service is performed (warranty, customer pay, good will). It’s a good practice to include your employees. If the right tone was set, who better to know what the customer likes and dislikes are. Regardless of whom it’s from, all feedback can be valuable and trackable.

Call Recording:
Call recording services or systems are also valuable in tracking and monitoring how well your organization is handling your customers. One bit of advice: Remove all sharp objects and anything that can be thrown or broken prior to listening to the first set of recordings. You will be astonished at what and how things are being said to your potential and existing customers by your employees. Once you get past the initial shock, they will provide a great avenue for training and holding your remaining staff accountable. They can also provide a means of verification in a “We said, they said” scenario thus preventing a possible legal nightmare.

Going Forward:
Customer service and satisfaction are more important now than ever. Competition for the BHPH customer is very stiff and, with the aggressiveness of subprime lenders at an all-time high, it is tougher than ever to find and keep customers. The like-trust-respect dynamic will be the key to not only sales success, but more importantly, collection success. Today’s BHPH customer only wants what we all want. They want to be treated with courtesy and respect. The truly successful operators already understand this and act accordingly.

If you are interested in learning more from BHPH expert, Brent Carmichael, openings in BHPH 20 Groups are now available for 2019! We look forward to hearing from you.

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