Are committed dealers more profitable to an OEM?

Date of publication: March 1, 2004

Abstract:

Many automotive manufacturers conduct satisfaction surveys of their dealerships, either directly or through syndicated studies. The presumed benefit of this feedback is in helping to develop and implement process improvements directed to improve dealer satisfaction. The expectation is that increases in dealer satisfaction lead to higher levels of revenue and profit for the manufacturer as well as its dealer body. The focus of this paper is to evaluate and model this relationship as it relates to an OEM's parts and service operations. Market Probe has partnered with General Motors for several years, assisting its service and parts operations (SPO) in its dealer feedback program. This program covers 20 major issues of importance to dealership parts managers as well as detailed attributes on each issue. SPO's program also benchmarks these ratings against other key OEMs in the U.S. The database generated to date has been used to analyze the relationship between dealer satisfaction and the sales generated from GM dealerships. By tying dealer satisfaction to SPO financials, the value of its feedback program can be substantiated and motivation for the entire SPO organization to become more customer-focused can be enhanced.

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