Collection CSI - Should You Measure It?

How would your collection department CSI (Customer Service Index/Indicator) measure up to everyone else’s in the BHPH industry? Most BHPH operators haven’t given it a second thought. As yet, there hasn’t been a national BHPH CSI developed, but it’s something that must be tracked and monitored to have any hope of future success.

In today’s highly competitive BHPH marketplace, low CSI will not only cost you money, but could literally cost you your entire business. Obviously, customer service and satisfaction is important in all facets of the business, but in the current competitive climate driven by a weak economy, 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, rightfully so, as a collection or risk management business, yet oftentimes the service after the sale is neglected or simply ignored. The most successful operators thrive on repeat and referral business, which is a direct result of providing good overall customer service. And those same operators usually experience a better performing portfolio, which again, is what this business is all about.

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. They have already provided service by selling and financing a vehicle for a customer when more than one other dealer said no. Their thought is that the customer has signed a contract and that’s where the obligation ends. This thought process is filtered 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 the increasingly competitive market makes them more right than ever before.

Another sizeable challenge to providing good collection customer service is setting the right tone. The first collection customer contact usually occurs when a payment is missed or if 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 about their circumstances or simply trying to get something for nothing. Both situations lead to the dealer taking an overly aggressive posture, usually by 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.

The key to setting the right tone is getting the customer to like you. If they like you, they will trust you, and if they trust you, they will respect you. Once they respect you, they will be much more likely to accept whatever you have to say—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 collections will be arduous for the length of the note, but rest assured if you set the wrong tone, you won’t have to worry about that customer, or anyone they know, once they are paid off.

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.

Deciding to renew or extend your commitment to customer service and satisfaction is a step in the right direction. The next step is to determine how to effectively track and monitor progress. There are a few ways to do this. Written surveys and call recording services/systems seem to be the most popular and effective.

Written surveys should be simple and concise. Multiple choice and/or numerical grading are the easiest to track and quantify. Open response can sometimes be just that, and oftentimes not legible and not of much value. Surveys can be done at the time of sale, as the customer pays off, or at the time any service is performed whether it be warranty, customer pay or best of all, goodwill. Additionally, talk to your employees. If the right tone was set, who better to know what the customer’s likes and dislikes are? Regardless of whom it’s from or when, all feedback can be valuable.

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, preventing a possible legal nightmare.

Customer service and satisfaction is more important than ever. Competition for the BHPH customer is already fairly stiff, and with the issues befalling the new car industry and the arrival of the new credit crunch customer, interest is growing by the minute. 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. It’s a simple fact that will derail the old-school train.

Vol. 6, Issue 3