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Honda Concedes It Falls Short in Satisfying Customers
By By Norihiko Shirouzu
The Wall Street Journal
LOS ANGELES -- Honda Motor Co ., long lagging in keeping customers satisfied with their car-buying experience at its 1,300 U.S . dealers, is trying to fix the problem - again.
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Over the years the No. 2 Japanese auto maker says it has tried numerous initiatives to improve consumers' car-buying experience at its dealers. Still, throughout the 1990s Honda dealers have consistently ranked near or below industry average in J.D. Power & Associates' so-called sales-satisfaction survey that measures customers' car-buying experience. Honda's Acura outlets at the same time have hovered just slightly above average. In the 2001 survey,
Honda was ranked No. 26 and Acura No. 21 among the 37 brands J.D. Power assessed.
Simply put, "we're terrible," said, vice president of corporate planning and logistics at Honda's U.S . sales unit in Torrance, Calif ., referring to the quality of customers' experience at its dealerships. Honda has about 1, 000 Honda and 300 Acura dealers in the U.S .
To solve the problem, the company is reorganizing its sales and services operations to consolidate parts and service jobs in each of its 16 sales zones into one position. That action has freed up one manager in each zone to become what Honda calls a "process improvement manager" to work with dealers in improving the process customers go through in buying vehicles.
, a Honda spokesman in Detroit , said the Japanese auto maker launched the program in February after implementing a pilot program in 2001. As part of the program the number of sales zones has increased by one to 17 when Honda divided Honda dealers in California into two sales zones. There are 11 Honda sales zones and six Acura sales zones in the U.S . after the change, he said.
Since February,said dealer owners and manager have begun undergoing a two-day training session on sales process improvement. Honda is now asking each dealer to appoint a "facilitator" to begin tweaking the sales process.
said major issues consumers have with Honda and Acura dealers are, among other things, a lack of a salesperson's concern for a buyer's needs, a lack of a salesperson's knowledge about products, and the time-consuming, tiresome process to line up financing to purchase a vehicle.
"Some dealers are known to start jerking on the price with a customer who is already filing out forms," said, "while in many cases a salesman's sloppy dress can be an issue, too."
A big cause for bad sales experience is that the business is so good that dealers have become complacent. "It becomes easier to take the customer for granted,"said.
Another factor is high turnover of salespeople. "In some cases, you have people who were selling furniture last week selling cars this week," the Honda executive said.
One sales process change Honda has already begun implementing is a telephone survey of new car buyers. Honda used to ask new car buyers to mail in surveys, butsaid that was slow and often vulnerable to manipulation by dealers.
"A telephone survey is much quicker" and Honda can give its dealers "much more immediate feedback" from customers,said. In instances where a customer gives a dealer particularly low scores,said Honda would issue a bulletin to that dealer, urging it to follow up with that customer.
says Honda, through the new initiatives, aims to elevate Honda dealers to rank at or near the top of mainstream brands, and take Acura dealers to the middle of the pack of luxury or premier brands.
-By Norihiko Shirouzu, The Wall Street Journal; 313-226-1255
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