Are customers important
enough to be listened to?
Economic power is
shifting because of the recent crisis, says Peter Cooke. As a
result, the ground rules and comfort zones when it comes to car
finance lending must change too. What may have worked in the past,
may not work so well in the future.
Go deeper with GlobalData
Technology is wonderful – the savings it can bring
are huge.
“Press 1 if you want to buy a
car – press 2 if you want to borrow the money to buy
it.”
Work through the whole
lexicon. “Press 9 and we’ll tell you why you are an unsuitable
risk.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataOh yes, don’t forget. “It’s
our policy to answer all calls by the third ring – your custom is
important to us.”
To customers it’s a total
turnoff, implying they are not important enough for us to speak to
them – a machine can do that. But we all seem to get unsolicited
calls offering to help us with our financial needs. Private motor
finance is a commodity and lots of organisations sell
it.
Most claim that the selling
experience is important in helping to make their particular
commodity unique. But is insulting the customer an integral part of
that process?
What does the
customer really want?
Is it time the industry and
its players stood back and asked: “What does the customer really
want?”
And perhaps even listen to
the customer without technology or smart research agencies
intervening, and perhaps introduce a little reality into the
equation.
The mythical retired car
buyer may not wish to go online and follow a menu, or press a
series of buttons to be told eventually: “It’s not our policy to
lend to the likes of you.”
Markets are
changing and lending policies need to keep up. Little more than a
year ago, a local authority worker would have been a good bet as a
potential borrower – but now?
As the economy becomes more
austere, every piece of new business may have to be worked for –
and that may mean spending more time listening than ticking
historic credit rating boxes.
The mythical ‘little old
lady’ may be refused credit because she is a little old lady of a
certain age. End of story. But ask a few more questions and she may
tick every other box.
She may have cash in the
bank, retain a good balance, receive a substantial pension, own her
own house, have no credit card debts – but she wants to borrow to
buy a car. Her motivation is her own concern, but it’s your wasted
business opportunity, even if mechanistically she may be refused
credit.
So, come out of the ‘credit
policy silo’ and look at the changing real world. The bulk of
capital and disposable income is now in the hands of the
over-55s.
Group of
‘unacceptable risks’
Baby-boomers are starting to
retire – a hedonistic, often well-off bunch – but many a
mechanistic rating profile simply rules them out. And, in another
decade’s time, this group of ‘unacceptable risks’ could be even
more powerful economically.
If you don’t believe me, try
working through some of these anti-customer systems and check the
result yourself. Remember, it’s all too easy to hold oneself up as
the reference model – the benchmark of virtue. Have you ever bought
a used car and had to negotiate the finance before you received the
keys? Or have you, within memory, always had a company car
provided?
We talk about politicians
being out of touch, but it can happen at a much more humble level –
motor finance.
The message is simple. The
economy is going through a massive change, probably a bigger one
than most of us have encountered during our working lives. Economic
power is shifting. As a result, the ground rules and the comfort
zones must change too. What may have worked in the past, may not
work so well in the future.
Remember mortgages? Now
relabelled by many as toxic debt. Similarly, ‘student loans’ have
metamorphosed into ‘student debt’ – but few have read the small
print.
The nursing profession is
another example of how the original task has almost been forgotten.
Surely the role of nurses is to look after patients, to help get
them return to health and back into the community.
Look how that has changed –
hi-tech tubes and pumps, green screens, forms to fill in, boxes to
tick, progress to report against measured priorities. The patient
is almost an inconvenience.
It comes back to the same
thing, whether it is a patient or a would-be borrower of motor
finance. Listen to the clients, the patients. Remember, it is
fulfilling their needs that pays your salary. Think about what they
want, not what you want to sell them.
It is a simple but important
message – the client really is important enough to be listened to –
they may have other choices apart from you.
Which button do I push to be
told I don’t fit the right profile for a loan for my next
car?
Peter Cooke is
professor of Automotive Management at the University of
Buckingham
