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Do the motor industry’s ‘customer satisfaction programmes’ and ‘customer relationship management programmes’ build stronger bonds with the customer and help sell more cars?

Executive Summary

Many academic theorists view customer satisfaction as being undoubtedly one of the top strategic issues in the new decade, and customer relationship management (CRM) receives even more interest in academic literature. However both of these concepts are often misunderstood, with very few pieces of literature able to define them, or give concise and coherent summaries of the benefits which they can transfer to organisations, a problem that appears increasingly important given how much money, time and resources have been devoted by numerous firms to implementing equally numerous programmes. The importance of both CRM and customer satisfaction programmes to the motor industry are as important as they are to any other industry: with the global car market exerting pressures on car prices, due to competitiveness and low interest rates, and the UK market showing only 0.6% growth from 2002 to 2003, the pressures on manufacturers and dealers to find new ways to sell more cars without further reducing prices is at an all time high. Equally, there is evidence to show that customers are increasingly valuing attempts by dealers and manufacturers to personally address their concerns, and develop relationships, rather than simply sell a car, MOT, servicing and other support.

Unfortunately, the literature proves quite thin when providing specific examples of CRM and customer satisfaction programmes in the motor industry, however several examples have been found of CRM and customer satisfaction programmes in other industries, which offer useful information and advice to any firms looking to implement, assess or improve programmes. Equally, several pieces of literature have highlighted potential neglect of customers in the motor industry, and have highlighted the need for manufacturers and dealers to find better ways of marketing themselves and interacting with customers, a need that CRM and customer service programmes could potentially fulfil. However, the majority of the literature is filled with often contradictory views on the respective concepts, including the debate on the value of technological advances, such as database management and e-mail, to CRM programmes, and whether they are replacing, hindering, or helping to support the more traditional, people based aspects of CRM.

This paper’s main contribution to the study of CRM and customer satisfaction in the motor industry takes the form of a survey of five Ford dealers in the south of England, conducted in late 2004. The survey is intended to assess the perceptions of CRM and customer satisfaction programmes held by dealership staff, in the belief that dealership staff, especially the business managers, sales executives and junior sales executives who are on the ‘front line’ of the industry will best know how the customers react to CRM and customer satisfaction programmes, and the managers and senior managers will best know how the companies, and industry as a whole, perceive, and are attempting to use, these programmes. Thus the survey includes questions on customer satisfaction and CRM, as well as demographic questions, and the five dealerships all have different scores on the Ford ‘View Point’ customer satisfaction program, hence it should be possible to determine what effect, if any, manufacturer incentives have on dealership’s CRM and customer satisfaction programmes.

SPSS was used to analyse the data, mainly to discover the mean response, and standard error of responses, of the thirty two survey questions, in order to test five hypotheses about the importance and success of CRM and customer satisfaction programmes. However additional analysis was also undertaken, in order to determine any difference in the views of dealership staff depending upon how long they had worked in the industry, their positions and their ages. Sex was also taken into account, however due to the small number of female respondents, seven, and the wide range of their answers, this unfortunately meant that the female data was not particularly useful, and often had to be ignored.

The results of the analysis tend to support the view that companies in the motor industry actively encourage and support CRM and customer satisfaction programmes, and see them as much more than database management techniques. This is further backed up by the views of many dealership staff members, who claim that CRM and customer satisfaction programmes lead to greater loyalty and trust amongst customers. However, the analysis fails to provide any significant evidence to support the claim that effective programmes can generate new business, and one of the recommendations of this piece is that further investigation should be undertaken into the ability of CRM and customer satisfaction programmes to generate good word of mouth in the motor industry. The final conclusions are that although the survey data does offer evidence to support the view that the motor industry’s CRM and customer satisfaction programmes do build stronger bonds with the customer, there has been no evidence provided to suggest that effective CRM and customer satisfaction programmes do actually lead to new business. It is found that whilst it is true that a loyal customer will most likely return to the same dealer the next time they wish to buy a new car, the most likely perceived manifestation of customer loyalty will be the customer using the dealer’s ancillary services. Finally, the evidence does not support the view that the success of CRM depends upon the levels of customer satisfaction and, as a result, even if it can be shown that CRM and customer satisfaction programmes are generating new business, it is possible that only one of the two is actually having a beneficial effect.

Introduction and Background

Customer satisfaction is undoubtedly one of the top strategic issues in the new decade. It has been a major topic of discussion in American boardrooms since the 1980s, yet the exact formula for creating an effective customer satisfaction program is still murky. Given that customer satisfaction is positively related to loyalty, which in turn leads to increased profitability, market share, and growth, the importance of developing an effective program is critical. (Naumann, Jackson Jr., and Rosenbaum, 2001)

To try and clear up this confusion, and exactly define the nature customer satisfaction programmes and how to design and implement them, researchers have explored the failures of many past programmes. According to a study conducted by Arthur D. Little and McKinsey, less than one-third of all customer satisfaction initiatives accomplished anything, and two-thirds of them ground to a halt. (Duffin 1993)

Ahire (1996) cites the major reasons for these failures as: "lack of top management commitment, unrealistic expectations about the time frame and cost of implementing them, over- or under-reliance on statistical methods, and the failure to develop and sustain a quality-oriented corporate culture."

A major problem with most customer satisfaction programs is that they begin with an attempt by the marketing research department to send customers a standard, packaged, survey, or one from another company, to probe their attitudes about customer service. Although this seems to be an easy and inexpensive method, the results are generally less than satisfactory, as questions have no true relevance to the specific firm or its customers and thus answers may not be relevant either. Each firm should take the initiative to develop its own measurement program based on its needs and the needs of its customers, as this is the only effective way to ensure that survey results will be useful to management and lead to future improvements.

An effective customer satisfaction program must be based on an understanding of customer value: from the customer’s perspective, the ratio of the expected benefits of a product or service to the expected outlays. This is due to the fact that customers can seldom determine the benefits or outlays objectively, thus their expectations and perceptions of them become critical. These expectations and perceptions can be separated into two groups: hygiene factors and satisfiers, much like in Herzberg’s hygiene and motivation theory for motivating a workforce. (Herzberg, 1971) Hygiene factors are mandatory for satisfying customers, whereas satisfiers are enhancing factors: the "extras". For example, a Toyota customer may indicate that the reliability of their vehicle is a hygiene factor, but that the fuel efficiency is a satisfier. As a result, high satisfaction levels can only be achieved when hygiene factors meet customer expectations and satisfiers are delivered at levels that exceed those expectations.

Customer Relationship Management (CRM), in contrast, is a relatively new innovation in the business world, the development of which has been driven by technological advancements, which enable businesses to create and manage databases of customer preferences and information, which thus enables them to create and manage their relationships with said customers. However, Crosby and Johnson (2001) are among many academics that have claimed that, when it comes to customer loyalty, technology can be a double-edged sword. They claim that fast moving information and communication technologies have helped drive the growing popularity of relationship marketing, an thus, in order to keep up and to help build closer customer relationships, companies are investing heavily in CRM technologies.

The goal of relationship marketing is to build customer loyalty for the firm. Therefore, any CRM strategy, including technology investments, must build a strategic competitive advantage that distinguishes a product, brand or company in a competitive environment. This thus helps the parent firm create a limited immunity from competition, as well as stronger customer loyalty and thus greater profitability. Used appropriately, technology can help the company learn from every customer interaction, and thus deepen the relationship by advancing ideas and solutions that suit the customer, encouraging them to stay loyal to the company that understands, and thus can satisfy, their needs and desires. Already, many established companies and brands are extending their contact with customers online, with the challenge, and ultimate goal, being is to create an online presence that will actually reinforce the existing relationship and make it even closer: ideally indispensable to the customer.

On the other hand, when inappropriately applied, technology can push the customer away from the firm, with the potential negative impact of technology on customer relationships being evident, and well documented, for example, in the use of voice mail and other systems to handle incoming calls. Many customers have stated that they consider personal interaction a key requirement for good service, and a voice mail system takes this away from customers, especially if they are held in a queue. Firms need to provide customers with interaction options and not force them down a technology path if it’s not preferred and doesn’t help strengthen the relationship. (Crosby and Johnson, 2001)

Indeed, as the relationship between technology and Customer Relationship Management is often misunderstood, so is the basic nature of CRM itself. West (2001) proposed that if you ask several people to define CRM, you are likely to get several very different answers. Someone might tell you that CRM is a piece of contact management or sales force automation software, whilst others might say they use CRM in the call centre to handle customer support calls. Yet another view might be that CRM is merely a tool to be used as part of an e-commerce initiative. In fact, West holds that all these answers are at least partially accurate; because CRM is a broad topic that can impact the way organizations interact with customers on many different levels.

In the purest sense, CRM is a strategy or philosophy, as opposed to merely a specific piece of technology or a marketing tool, and is designed to optimise customer profitability, revenue, and satisfaction. In order to achieve a high level of commitment to customers, many forward thinking organizations have been appointing key management staff to roles like vice president of customer service, providing a full department focused on managing the relationships with existing customers. This is mainly because firms are discovering that in order to implement CRM, they must apply policies, processes, and technologies to provide a personalized and engaging experience that is consistent across all customer interactions. Thus, to implement a total CRM philosophy, organizations should examine the interactions they have with their customers; thinking of customer interactions in terms of the life cycle of a customer relationship that moves from marketing, to sales, to service or support, to data gathering and personalized marketing and, hopefully, if the relationship is managed correctly, to another sale.

In terms of the current state of the motor industry, The UK market for passenger cars grew by 0.6 % over 2003, to reach a volume of 2,579 thousand new car registrations, meaning that total new car registrations and sales rose by 17.5% over the period from 1997 to 2003, however 2002-2003 showed a marked lessening of the growth rate from previous years. Pressures on car prices, due to competitiveness and low interest rates have combined to reduce the cost of new cars, which has lead to the increase on sales, resulting in the United Kingdom being the second largest new car market in Europe, behind Germany with 3,236 thousand units in 2003. Equally, the number of households owning one or more cars has increased, over the same period, from 70% in 1997 to 73% in 2003. The proportion of households owning two or more cars has also risen over the same period, from 25% to 29.5%, with the growth in two car ownership reflecting the increase in families where both parents are in employment, as well as the increased competitiveness and availability of finance. However, in the face of the rising number of cars on the UK roads, environmental concerns are becoming an increasingly important factor for the automobile industry, with the major manufacturers involved in a constant search for environmentally friendly fuel types and more efficient cars. (Global Market Information Database, 2004)

However, not only are these efficiency drives fuelled by a desire for lesser environmental impacts, but also on the rising prices of fuel: a grave concern for the motor industry at the current time. Indeed, Truett (2005) reports that automobile manufacturers across the world are starting to advertise and promote fuel economy to consumers who are increasingly worried about sustained high fuel prices. At least four American auto makers have recently incorporated a fuel economy message into their advertisements: a stylish spokesperson in a television (TV) ad for Mercury Montego automobile model of Ford Motor Co. mentions the sedan gets 29 miles per gallon (mpg) on the highway; a recent General Motors Corp.’s "Only GM" print ad and a similar TV commercial stress that the company now has twenty vehicles that get 30 mpg or more; a Toyota Motor Corp.’s TV ad, reportedly, says that the automaker has nine models with an EPA rating of 30 mpg or more; and Honda Motor Co. Ltd. is reportedly devoting a 30-second TV commercial to the Civic’s 38 mpg highway mileage rating. (Truett, 2005) According to several analysts, including Thad Malesh, who tracks advanced ‘powertrains’ for the Automotive Technology Research Group, automobile manufacturers are absolutely playing into what they now believe is one of the key elements that people are looking at when buying a new vehicle.

The recently released Customer Focus 2005: Automotive study, conducted by Baltimore-based media and marketing services firm Vertis, shows that the top reason over one third of consumers (36%) buy a new car is simply because they want one, and thus their main criteria are affordability and running costs. But the annual survey of 2,000 adults also revealed that incentive offers are most favoured by the so called ‘Generation Y’ consumers: the group of consumers who were born between the years 1977 and 1994, the latest age group to enter the car-buying marketplace, and one that’s significantly larger than their predecessors: ‘Generation X’ This age group, now ranked as the most important demographic group by many automobile manufacturers, were twice as likely as the average adult to be enticed by a special test drive offer, or prize draw opportunity: both of which can be seen as important services provided by dealers. Price incentives and financing offers rank as the top motivators for visiting a dealership, and as for direct mail, forty eight percent of survey respondents said they would open a package if they felt something inside, whilst thirty seven percent said they would if they knew in advance that the mailer includes a gift. (Incentive, 2005)

With both these survey results, and market data, showing that the market is still growing and that customers increasingly value additional service and offers as part of their car purchasing decisions, it is obvious that the motor industry’s companies will all have to focus more and more on the customers’ needs and desires if they wish to continue to sell cars. Equally, the research and analysis of customer satisfaction programmes and customer relationship management programmes has shown that these programmes have a lot to offer to a large number of businesses in many markets, if they can be planned and implemented correctly. However, the question of whether the motor industry’s customer satisfaction programmes and CRM programmes are helping to build stronger bonds with the customer, and thus help sell more cars, still remains, and can only be answered by a deeper look at the literature surrounding the subject, and an in depth analysis of the relevant data.

Literature Review

Already mentioned above, Naumann, Jackson Jr., and Rosenbaum, (2001) provide information on the implementation of customer satisfaction programmes, including the common problems that any program is likely to encounter. Their main focus is that fact that, in order to develop an effective customer satisfaction program: the term "customer" must be well defined. In addition to the traditional consumer, there are three groups of customers that are often neglected in customer satisfaction programs: internal customers, channel members in consumer markets, and buying centre members in business-to-business markets. In some companies or divisions, intra company transfers may constitute a large portion of sales, so generating satisfaction among these internal customers is very important. (Naumann, Jackson Jr., and Rosenbaum, 2001)

As power has shifted more clearly to consumers, channel intermediaries, particularly those close to the consumer, have gained power as well. Because of the diversity of brands competing for shelf space, retailers play more of a ‘gatekeeper’ role than ever before, and ensuring that they remain satisfied is obviously important to the main producers and distributors in any industry. However, manufacturers’ customers in the motor industry have to include brokers and distribution centres, as well as the showrooms, each of whom may have different decision criteria. An interesting example of this is provided by Rechtin (2003), who reported how Kia Motors America Inc. not only unveiled its new products, but also ambitious sales, service, marketing and customer satisfaction programs at a nationwide dealer meeting. On the back of Kia dealerships being reported as have the worst finance and insurance satisfaction scores in the industry, Kia introducing several programs to help dealerships satisfy their customers better, in turn satisfying the dealers.

However, as stated in the introduction, the criteria and characteristics of a good customer satisfaction program is still the subject of much debate. Srnivasan (1996) proposes an integrated framework that explains customer behaviour and observed market dynamics, modelling the all important customer switching and retention as complex phenomena influenced by inherent behavioural factors, the current competitive scenario and time. He claims that the most important thing to consider is how to best measure customer loyalty, and its root causes, and that this knowledge will lead to the enhancement of customer satisfaction programs, citing the strong relationship between competitive satisfaction at the present time with customer loyalty at a future point in time. He concludes that, in order to implement his proposed framework, and ‘loyalty curve’ model, classical customer satisfaction programs need to be modified to collect, analyse and use, competitive information.

Naylor (1995), Diamantopoulos, Tynan, and Hughes (1987) and Ludvigsen (1996) have all written books focused specifically on customer service programs and their impact on various segments of the motor industry. Whilst Naylor focuses on customer service in the motor trade as a whole, thus providing a wide overview of the potential impacts and benefits of customer service programmes, Diamantopoulos, Tynan, and Hughes focus specifically on the luxury car market, claiming that this segment of the market will benefit most from excellent customer service programmes, as people will tend to buy more on quality than price. Ludvigsen, in contrast, focuses on total customer service throughout a car company, and how individual customer service programmes can fit into his so called ‘customer driven car company’.

Rust and Zaborik (1993) provide a mathematical framework for assessing the value of customer satisfaction, the basis of which is a framework which is designed to enable managers to determine which customer satisfaction elements have the greatest impact in different industry segments, for example luxury cars versus family saloon cars, and thus how much money should be spent to improve particular customer satisfaction elements As a result, theoretically this makes it possible to hold customer satisfaction programs accountable, in the way that other business programs are held accountable, by forcing them to demonstrate their benefits with respect to bottom line profitability, and thus answer the question of whether customer service programmes do in fact boost profitability by selling more cars. An individual level model of loyalty and retention is used, which is then built up to market share by the process of aggregation however, the application of the approach is only demonstrated in a pilot study of a city’s retail banking market, and thus it is difficult to directly project it onto the automobile market. Also this piece is now twelve years old, and thus may have difficulty analysing and modelling the customer satisfaction programmes of the modern, global automobile industry.

Although it is an even older piece, the work of Craig (1989) not only provides some information on the features and performance of an effective customer service programme, but also provides useful information on the development of customer service programmes, against the background of the emergence of the service economy from the former, primarily manufacturing driven economy. In the context of the 1980s growth of services, to the point where they generate nearly 70 percent of the United States of America’s gross national product and employed seven out of ten Americans, Craig points out that, as the U.S. evolved into a more service-oriented economy, service quality was consistently less than satisfactory. Using the criteria that customer satisfaction occurs when one’s experience of a service offering matches the expectations, Craig hypothesised that experiences which deviate from expectation are generally noticed and remembered, and that a feeling of dissonance occurs when an experience of service falls short of expectations.

However, as conversely customers are impressed when they get more than they anticipated, it was hypothesised that customers who receive "more than they bargained for" will likely buy from that company again, a theory that has since been supported by further pieces of work, such as that of Bloemer and Lemmink (1992), which is discussed below and which analysed the hypothesis in the context of the motor industry. As such, successful service companies must endeavour to offer their customers a distinguishably better service package, with the downside risks of not knowing the difference between the minimum requirements and value-added services being substantial: the net impact is equivalent to the difference between the hygiene factors and satisfiers proposed by Ahire (1996). Craig (1989) thus believe that in order to create an effective customer satisfaction program, marketers must have a good understanding of their marketplace, developed through close examination of, and communication with, their customers. They must use this knowledge in order to better understand the differences between minimum service requirements and value-added services, with Craig’s conclusion being that companies will continue to succeed in the marketplace by means of an organized effort to train, motivate, guide and manage the actions of its employees to help them capitalize on their customer contacts, and use these contacts to better enhance the firm’s level of customer satisfaction.

Page (1995), Hill, Brierley and MacDougall (1999), Goodman (2000) also all provide various different methods by which companies can monitor, measure, assess and improve their customer service programmes, although these books are all focused more on customer service as a whole, rather than specific programmes. As such, although they have useful information on the characteristics of good customer service, they are lacking in methods to actively measure the success of particular customer service programmes, and answer questions as to whether they are increasing business profitability.

Indeed, although it is based in a completely different area: management of ARL libraries, Soete’s (1998) book on customer service programmes actually has some very useful information on the characteristics of said programmes, which are useful for all firms in all industries. Soete identifies several characteristics associated with good customer service programs, claiming that they typically have one or more of the following attributes: A written statement of service philosophy, organized processes for actively gathering data about customer behaviour or satisfaction, the accurate and professional use of data to adjust policies, services, or operations to serve customers better, continuous measurement of service quality and consequent continuous adjustment of service delivery, rigorous employee training in effective service delivery, through both organized events or on-the-job training and/or service policies that provide latitude for staff as they serve customers (Soete, 1998, p. 3).

Over 70 pages of Soete’s report are dedicated to providing representative documentation from different 10 libraries reporting customer service programs. The documentation is arranged by philosophy/guidelines, training programs, and assessment/data-gathering. Obviously, these guidelines are focused on ‘not for profit’ organisations such as libraries, but with the not for profit sector currently booming, there are several lessons which the ‘for profit’ motor firms could learn from this report. The term customer service is used to denote programs that focus, in highly organized ways, on the people (organisations) serve… (Soete, 1998, accompanying Flyer 231). Clearly, the report examines customer service from an organizational perspective, whereas the literature on service quality and customer satisfaction approaches service from the customer’s perspective, however the documentation includes examples from both perspectives and even addresses problem patrons: a separate topic, without discussing the significant conceptual differences among these assorted topics. This is an unfortunate omission from this book, as the topics are clearly not all the same, with several important distinctions missed out which would have been useful for the motor industry. Equally, the provided list of ‘selected readings’ is highly selective, and disappointingly not relevant to many areas of the topic of customer service programmes, although this is possibly due to the lack of relevant literature on customer service programmes.

Garver and Gagnon (2002) suggest seven ‘key’ activities which companies should undertake to improve their customer satisfaction programmes, again, focusing strongly on the effective gathering, analysis and use of customer value and satisfaction data, and also on the importance of executive level support for any of these programmes. However, Garver and Gagnon’s attempt to condense their advice down into manageable form, whilst focusing on seven differing areas, often means that their advice in only of limited practical use, and has little significant relevance to the motor industry. Similarly, Industrial Engineering (1994) looks at the failure of several customer service programs, and the reasons behind this. The report highlights the results of the survey conducted by A.T. Kearney on the customer satisfaction strategy of companies, offering ten common ‘myths’ about customer satisfaction, and the ways to achieve it, and also what the author believes are the main reasons for focusing on customer satisfaction. However, yet again, although the report offers useful advice, and explanatory power, for the success and failure of customer service programmes in general, it offers little specific advice, and little that is particularly relevant to the motor industry in particular.

Of greater practical use is the work of Sharma, Niedrich and Dobbins (1999), whose article presents an empirical illustration of a framework that a firm could use if it wished to monitor customer satisfaction over a period of time. The study uses three years of data from a customer satisfaction program of a large Fortune 500 firm in order to illustrate the framework and the associated methodologies. The framework is intened to provide management with important insights into monitoring and improving customer satisfaction, as well as a framework on how to develop and implement a customer satisfaction programme. Any firm desiring to develop such a programme for systematically monitoring customer satisfaction easily can adapt the framework to its needs, and in theory, the success of failure of existing programmes can be analysed and attributed according to the framework’s characteristics. Similarly, Barsky (1996) discusses how a hotel or restaurant can improve its service by undertaking a customer service improvement program, based on using surveys to determine how customers view the operation. Although this piece touches on the processes involved in developing a customer satisfaction program, including quality standards and customer satisfaction as well as the importance of customer and employee input, and thus has some useful analytical and explanatory power, as with the work of Sharma, Niedrich and Dobbins (1999), the fact it has no basis in the motor industry limits its usability in this context.

Unfortunately, in contrast to the several books on the subject, academic journals focused on the customer service programmes and their success and relevance in the motor industry are few and far between, with most focusing on customer satisfaction programmes in general, with the automobile industry as a side issue, or used to illustrate a point. A prime example of this is the work of Stein and Bowen (2003) which deals with the customer satisfaction system developed by the leading market surveyor J.D. Powers & Associates. However, although the piece only comments fairly briefly on the use of the system by several automobile companies, and its resulting success or failure, it does contain useful information on the most important factors to be considered in designing an effective customer satisfaction program, and measuring its effect, and this information does come in useful when measuring the success of customer satisfaction programmes in the motor industry. There is also a section on how customer service programmes fit into the composition of total quality management programmes, which have been shown to be useful and relevant to the motor industry, and the role of customer satisfaction in TQM. Another useful, if brief, piece comes from Vittachi (1993), who presents an anecdote of a newspaper advertisement from the Hong Kong office of Japanese car maker Toyota: the advertisement was about Toyota having Hong Kong’s most aggressive customer satisfaction programme, and although it has limited analytical value, it does show how customer service programmes have changed and evolved over the last decade.

Other useful sources based on the motor industry include Lawrence (1996) who reported on the launching of a version of Cadillac’s ‘Standards for Excellence’ customer satisfaction program by General Motors Pontiac division, and the fact that other GM units planned to follow suit, on the back on the success of the Cadillac program in attracting new customers, and selling more cars. Another useful insight comes from the report of Automotive News (2002) on the simplification of the customer satisfaction program used by Volvo Cars North America Inc., including the reduction of the number of questions in the ‘Dealer of Excellence,’ survey for customers as, according to Jim Speck, president of Circle Automotive Group, "People have been surveyed to death. The last thing people want to do is answer 33 questions" This factor, combined with the solicitation of input from dealers, is an indication that perhaps some of the major players in the motor industry have developed their customer service programmes to too great an extent, and as a result are overwhelming customers, and dealers, with their attempts to satisfy them, which, as a result, can thus backfire.

A more specific, and thus perhaps relevant, use of a customer satisfaction programme was recently examined by Motor Age (2002). This article reported that: "Toyota Motor Sales U.S.A. announced a new customer satisfaction program for owners of 1997 through 2002 Toyota and Lexus vehicles" because "very small number of customers have experienced engine damage due to what they call oil gelling or sludge.’" According to a press release, Toyota promised to cover all repair and incidental costs, including those which had already paid by customers, which could be shown to result from "damage due to oil gelling for eight years from the original date of sale or lease, without mileage limitation. " This use of a customer satisfaction programme, to correct a detected fault, was an innovative development by Toyota, and possibly prevented what could have been a major image crisis for the company. As it was introduced after the cars had been sold, and the fault detected, it could not be said to have been directly responsible for the company selling more cars, but it could have contributed to the company’s reputation for customer service, thus encouraging new customers to choose Toyota. In the very least, it showed that effective damage limitation is at the forefront of many company’s minds, especially in the highly competitive global automobile market, and thus shows how the efficient use of targeted customer satisfaction programmes could result in a company being able to sell more cars than without said programmes.

Although specific customer satisfaction programmes have been largely untouched by academia, customer satisfaction in general has received widespread attention, most notably from Matzler et al. (2004), who used the importance-performance analysis (IPA), a widely used analytical technique that yields prescriptions for the management of customer satisfaction, to analyse a supplier in the automotive industry. In this paper, IPA, a two-dimensional grid based on customer-perceived importance of quality attributes and attribute performance,was used in an empirical study on customer satisfaction. Thbe researchers claimed that, depending on the interplay of the two dimensions, strategies for satisfaction management could potentially be derived from their research. However, as theoretical and empirical work has shown, the relationship between attribute-level performance and overall satisfaction is asymmetric: in other words, according to the IPA, what a firm actually produces can have very little predictable effect on the satisfaction level of its customer. The researchers claim that these findings call into question the applicability of IPA in the case of the automobile industry, particularily given that a regression analysis with dummy variables only served to confirm the hypothesised asymmetric relationship between attribute-level performance and overall satisfaction. However, regardless of the applicability of these results, the fact that a direct relationship between product quality and customer satisfaction could not be confirmed is evidence in support of the necessity of developing customer satisfaction programmes to better ensure satisfied customers, as the all important recommendations will not necessarily come from product quality alone. However, the study did show empirically that the managerial implications derived from an IPA are misleading. Consequently, not only does the traditional IPA needs to be revised, but the conclusions about customer satisfaction, and the importance of customer satisfaction programmes, may need to be tested further, and possibly revised as well.

Another, more statistically based, analysis was conducted by Roscino and Pollice (2004) who observed and tested the nature of the market research that ofetn underlies a customer satisfaction programme. They claimed that due to the fact that in said market research, such as for the measure of the customer satisfaction, data is often collected through questionnaires, responses are often classified into ordered categories, so "observed variables are ordinal and the rate of missing data may be very high." In their paper, they propose a method for the analysis of a categorical and incomplete data matrix, applying their methodology to data collected by a market survey of Fiat Auto, in order to show the latent dimensions underlying the customer satisfaction with car dealers. "After multiple imputation of missing values the polychoric correlation matrix, which is used to measure the manifest variables correlations, is computed and used as a proper input to factor analysis." Although two factors underlying the nature and source of customer satisfaction are thusly identifed, and their weights on the global judgement ordinal variable estimated by ordered probit regression, this paper is more designed to test the method of analysing the data than the actual result, and thus care must be taken when using any of the resulting conclusions to comment on customer satisfaction, and the success or failure of customer satisfaction programmes.

Interestingly, whilst the above authors focused on how best to analyse inadequate data, and produce meaningful conclusions from it, Campbell (2004) concentrated on the importance of the correct application of data collection techniques, which is crucial to the development of effective customer satisfaction programmes, and the monitoring of their effectiveness. He notes that the global automotive industry faces "significant structural challenges, including declining prices, increased demand for higher quality products and the need to reduce excess on-hand inventory. All these factors are exerting tremendous pressure on manufacturers and their suppliers to continually reduce costs while also improving customer satisfaction and service." Given these challenges which are currently facing the global automotive industries, it is clear that the application of said data collection techniques is vital, not only in creating customer satisfaction, but also in enabling manufacturers to reduce costs and eliminate non value added tasks as much as possible, which are often part of customer satisfaction programmes, when customers are dissatisfied on cost grounds.

Huber and Herrmann (2001) took a more direct approach to the problem of customer satisfaction, claiming that their analysis shows that customer satisfaction can be considered the central determinant in all phases of the contact chain. According to the authors: "Multi-dimensional recording of customer loyalty reveals clear differences in the interactions, first, with brand loyalty and, second, with dealer loyalty. In contrast to the opinion widely held in practice, customers in the automotive sector definitely do not perceive the brand and the dealer as one unit. Since similar studies in different countries come to almost the same conclusions, it can be argued that the results are valid in several cultural settings. The results obtained are so fundamental that they can be translated into implications even by internationally operating companies." This shows the vast importance of effective customer service programmes for modern multinational manufacturers in the automobile industry, and also local dealers: if customers can be shown to perceive the two as seperate units when purchasing a new car, both entities must endeavour to best satisfy the end customer, for fear of losing future car sales. However, this conclusion does have some interesting implications for the relationship between dealers and manufacturers. If, for example, a dealer sells multiple types of cars, then they are not necessarily so concerned by one manufacturer failing to provide after sales service to a customer: this may not necessarily reflect badly on the dealer, as long as the customer identifies the problem as being the fault of the the manufacturer, who is a seperate entity from the dealer.

Finally, although it is quite an old piece of work, the piece by Bloemer and Lemmink (1992) was one of the first pieces to properly examine the positive influence of customer satisfaction on brand and dealer loyalty, which had often previously been taken for granted. In their 1992 study, the authors attempted to prove whether this relationship really existed, by examining and analyising the case of an automobile-dealer network. Ultimately, they discovered that three different types of customer satisfaction were identifiable: firstly there was a level of satisfaction with the car, secondly there was a level satisfaction with the sales service, which was often correlated to satisfaction with the car, but not always, and finally there was satisfaction with the after-sales service, which could equally be totally independent from the other two. It was expected that all three types of satisfaction would have an influence on brand loyalty as well as on dealer loyalty, but more specifically, it was expected that satisfaction with the car would be the major determinant of brand loyalty and that satisfaction with the service, both sales- and after-sales service, would be the major determinant of dealer loyalty, assuming that, as Huber and Herrmann (2001) later showed, consumers did not perceive the brand and dealer as one and the same. However, furthermore, a study of the literature revealed that dealer loyalty might also significantly affect brand loyalty, thus indicating that although consumers may perceive the two as seperate entities, they may see some links between them, thus partly invalidating the hypothesis explained at the end of the last paragraph.

In the empirical part of the study, customers of several different automobile-dealers, which all dealt for the same brand of automobile, were asked to fill in a mailed questionnaire, similar to that used by many customer satisfaction programmes. The three different types of customer satisfaction and the intention to buy from same brand of car again, as well as the intention to buy from the same dealer again were measured. The customers were also asked why, or why not, they would buy the same brand for their next car purchase, or from the same dealer. In general, the authors’ analyses of the results revealed that customer satisfaction with the car, as well as dealer loyalty, are major determinants of the customer’s future brand loyalty, that customer satisfaction with the sales service as well as with the after-sales service are major determinants of dealer loyalty and that dealer loyalty is an intervening variable in the relation between satisfaction and brand loyalty. As such, this shows that brand and dealer loyalty are strongly linked, regardless of Huber and Herrmann’s (2001) conclusions, and thus dealers and manufacturers should be considered as being ‘customers’ of each other, and thus each should endeavour to keep the other satisfied. Furthermore, it was found that the strength of the relationship between different types of satisfaction and loyalty indicators differs markedly between various market segments, such as whether the car was intended for private or business use, and whether it was a new or used car. This varying strength will likely have significant impacts on the effectiveness and impact of customer service programmes, and thus should be carefully analysed and considered by any firm that wishes to use a programme to increase the number of cars it sells, as different programmes may be applicable to different customers.

Customer Relationship Management (CRM) on the other hand, is often perceived as a much more recent concept, however the practice of keeping precise histories on each of a businesses’ customers, including what they order, which promotions they receive, which they respond to, how promptly they pay, how many promotions need to be sent before a purchase is made, and so on and so forth, can be dated back as far as the 1960s. A recent article by Bennett (2005) focuses on a customer relationship management commercial database system used by the Reader’s Digest Association (RDA) in 1969. The Unified File System (UFS) provided the Digest with precise histories on each of its 50 million customers, which made it possible to figure out which customers would be interested in what additional products, and whether they would pay for them, as well as deliver the right product to the right paying customer at the right time. The capacity of UFS to easily test a direct mail campaign radically changed the game for the RDA, as prior to each marketing campaign, 5,000 to 40,000 customers could be chosen as a test group with the assumption that 20,000 act like 2 million. Indeed, the only thing that the Reader’s Digest 1969 system notably lacked in terms of customer management was self service. This policy of learning through customer behavior allowed RDA to rank each customer in terms of promotional value, and has ensured that the Reader’s Digest has survived as a household name, and viable business, until the present day.

With such a long history behind the concept, one could reasonably expect it to be well defined, however this is far from the case, as was mentioned by West (2001) in the introduction. Rogers (2003) claimed that although some marketers define customer relationship management (CRM) as "a company-wide philosophy involving organisational realignment and culture change, as well as technology implementation", in practice, CRM has become inextricably associated with the installation of software packages. In Rogers’ view, CRM: a business strategy intended to gain market share and competitive advantage through improving customer loyalty, has been discredited because of over-reliance on technology. However, it is also claimed that given the results of IT industry analysts’ findings on the way CRM success or failure is measured, if it is measured at all, perhaps CRM systems as well as CRM strategy have had an unfair press, and "re-launching CRM step by step with a balanced metrics framework, including the customer experience, may be the way forward."

Schoenbachler et al (1997) contribute to the view that technology can be a mixed blessing for CRM programmes: their article provides guidance to the consumer marketing manager new to the world of database marketing. In it, the authors briefly define database marketing and its popularity, explain the advantages of database marketing, provide an overview of the process of developing a database marketing program, and identify some key future trends in database marketing. A marketing database is succinctly described as a collection of data, such as customers’ names, addresses and purchases, which provides marketers with information that enables them to make better decisions in working toward accomplishing the company’s objectives. Relatively recently, marketing databases have begun to be recognised as integral assets of most major businesses, including those in the automobile industry, largely due to the evolution of relationship marketing, and the associated CRM programmes, and the realization that in order to be competitive, companies need to build a relationship with their customers which is based on more than just price. Schoenbachler et al claim that database marketing aims at building a profitable individual relationship with each customer, and as such the relationship should make the customer feel that he or she is recognized and receives personal service and attention: something that many modern, automated, databases fail to achieve.

With such a long history behind CRM, and yet still such confusion over the nature of the concept, it is only natural that there are hundred of academic journal entries on the topic of CRM, and a significant number on the attributes of the CRM programmes themselves. A useful case study is analysed by Kristoffersen and Singh (2004), whose paper is focused on the methods used by a nonprofit organization, Plan Norway, when changing itself from being a sales oriented company to a market oriented one, as part of the process of implementing a customer relationship management program. The case of Plan Norway is examined using the five critical areas identified and agreed on by researchers and practitioners as being vital to the success of a market oriented firm: strategy, customers or market, people, process and technology. The study successfully identifies reasons for the success of the customer relationship management programs at the non-profit organization, and in doing offers insights to other organizations, both for non profits and for profits, such as car manufacturers and dealers.

Sheng (2005) also provides an interesting case example: Simple Simon Inc., an online grocer who currently believes the Twin Cities is the especially ripe for home delivery service, due to having the highest proportion of working women in the United States, and thereby targets those time starved consumers who would rather shop for groceries from their home. Based on surveys conducted by several bodies, which have consistently revealed that two-thirds of grocery shoppers dislike shopping, and 70-80% of groceries they buy every week are the same, Simple Simon has produced a tailored solution. With an innovative, sophisticated, customer relationship management program, the items customers buy every week are stored at, and the company also offers the right web site, superior service, and ‘just in time’ delivery to establish solid customer relationships, thus gaining the competitive advantage: "(By using) differentiation through niching, the company creates a new meaning of saving time and providing convenience for the working mothers by connecting them to a world of information technology." (Sheng, 2005). Although this study has no real relevance to the motor industry, it does tend to suggest that if customer relationship management programmes can work for small, local grocery enterprises, then there should be no reason why they can’t work for major, multinational motor firms.

However, adding to the uncertainty over the value of CRM programmes, Yim, Anderson and Swaminathan (2004) claim that, despite the rapidly growing CRM literature, not only do the actual dimensions of CRM remain unclear, but their effects on customer outcomes remain equivocal. In this piece of research, the authors first identified the requisite activities for effective CRM implementation, before investigating their effect on customer satisfaction, customer retention, and sales growth. Their results indicated that, as most theorists tend to agree, managers need to think beyond the technological components of CRM, however this piece identifies only four key CRM dimensions, which management need to focus on in order to significantly enhance customer loyalty and sales growth, rather than the five identified by Kristoffersen and Singh (2004). In the final analysis and discussion, Yim, Anderson and Swaminathan (2004) also examine the expanding role of sales people in successful CRM implementation and outcomes, claiming that an effective, well trained and committed sales force is of comparable importance to the actions of senior management. In a similar vein, Campbell (2003) claims that, whilst increasingly demanding customers have prompted many firms to implement customer relationship management (CRM) programs, little is known about the internal processes that assist organisation wide learning about individual customers and the firm’s relationships with them. Campbell’s research proposes a conceptual framework about the internal processes involved in creating customer knowledge competence, which thus allows firms in any industry to strategically manage their CRM programs. The framework is discussed based on five case studies of Canadian financial services firms that have implemented customer relationship programs, however this discussion furthers the author’s claim that the model could be applicable to most firms, including those in the motor industry.

These views are backed up by those in several books, including those by Bligh and Turk (2004), who follow the route taken by Yim, Anderson and Swaminathan (2004) in focusing strongly on the people aspect of CRM, claiming that it is a method for connecting better with customers, rather than simply applying technology to databases. This is conveyed best through their key message: customer wins don’t arrive by mere loyalty – they thrive on persistent communication and thorough customer insight.

However, despite the many articles which criticise the role of technology in customer relationship management programmes, there are several pieces, most notably that of Rohm and Sultan (2004), which actively praise technological developments as a vital part of CRM. Rohm and Sultan’s article provides information on the evolution of electronic business strategies, including the benefits of online marketing, stating that the Internet unquestionably represents a significant change in the competitive landscape by offering traditional firms new and innovative ways to increase efficiencies, strengthen communication efforts, forge better customer relationships and build stronger brands. Managers at such firms, well established prior to the dot-com boom of the late 1990s, now fully recognize the Internet as a mechanism for reducing costs and increasing value chain efficiency, forging customer relationships and strengthening brands, as opposed to simply generating revenue online. The example of the automobile manufacturer Saturn is used, as this firm exhibits a collaborative approach to electronic business, as illustrated by its successful, electronic, dealer focused customer relations management initiative which the authors analyse in some detail. They also claim that, despite what other authors may claim, firms are becoming more sophisticated in the use of the Internet in marketing communications, although this may simply be a function of the evolution of information technology in general. They conclude by summarising that, unlike television or print, the Internet uniquely can respond to the individual visiting the page, whether through sign-ins or cookies, and if managed properly, this can be an invaluable part of a customer relationship management program. This view, although initially appearing very different from those of Rogers (2003) and Schoenbachler et al (1997) can actually be seen to be very similar. Both viewpoints hold that technology can be a huge blessing for CRM programmes, provided the technology is not used as a substitute for the human factor, the respective authors just approach this argument from different sides. Obviously this not only has strong implications for any firm in the motor industry when planning and implementing a CRM program, but it also offers further explanatory power for the success and failure of said programmes, especially given that the motor industry is such customer facing business: test drives, sales, servicing and so on must all be conducted face to face with the customer for the best results, and thus most sales.

This view was recently further reinforced by the work of Roberts, Liu and Hazard (2005), who focused on the role of technology in successful customer relationship management (CRM) implementation, a subject which appears to be a perennial subject of concern to marketers. Their paper reviewed CRM studies, especially those with empirical data about the role of technology, showing that the studies consistently indicated that although technology is a necessary component of CRM programmes, on its own it is not sufficient to ensure the ultimate success of a CRM system. The paper then presents a model of CRM implementation that positions technology as an enabler of CRM success, but identifies other marketing and organisational issues as key drivers. It includes a case history of successful CRM implementation that features a staged approach to both technology integration and organisational readiness, thus providing further evidence in support of the argument for developing CRM from both the technological and the human side.

However, despite several recent journals arguing in favour of CRM, there are still many authors rallying against it, such as Newell (2003), who argues against the views of many telecommunications and computer companies, who emphasize the enormous benefits of CRM, provided you spend enough money with them. Newell’s opposing view is that customers are as likely to want to manage their relationships with companies, or to refuse a relationship altogether, a view that is becoming more widely accepted all the time. Equally, because Newell takes this view as his starting point, and goes on to show how both sides, the customer and the firm, can do better, with the soundness of his experience and research showing at all points, thus making this book an excellent piece to help analyse the success and failure of any CRM ventures. Likewise, Ellsworth (2002) provides useful advice for any company attempting to manage customer relationships uising the Internet, using the decline of WorldCom to show that managers who concentrate primarily on maximizing short-term shareholder value may put their companies at risk. Indeed, it is claimed that a single-minded focus on stock price not only induces executives to endorse faulty strategies and false accounting methods, but it also demoralizes employees who yearn to serve a higher purpose than profitability. As such, Ellsworth claims that it is better to focus on serving customers, and let the discipline of competitive markets lead executives to do what’s best. Yet this book unfortunately offers no in depth case studies to demonstrate the power of customer centric thinking in action, instead, it draws mainly from companies’ mission statements and CEOs’ rhetoric. Although this approach shows that many successful companies are embracing CRM programmes in an attempt to boost their long term profitability and viability, it fails to show exactly how they are achieving this and, more importantly, the difference between successful programs and those which fail to produce the desired results.

Peppers and Roger (2004) argue that building customer value through managed relationships is impossible without first understanding relationships, and that the core of a relationship is mutuality. The authors maintain that a relationship must be mutual, interactive and iterative in nature, and thus it must provide ongoing benefit to each party, and as a result will change the behavior of each toward the other. If a relationship can fulfil these criteria, the authors argue that it will, therefore, be both unique and valuable to both parties, and thus will lead to mutual trust. Buttle (2004) is another author who attempts to help companies improve their CRM programmes, by exploring all related aspects of CRM: strategic marketing, operations, human resource, and IT management, thus examining everything from customer privacy issues, to trends in customer-supplier relationships, to the common misunderstandings of CRM. In contrast with many other authors, Buttle provides a proportionate look at both the technical and the human interaction aspects of CRM, incorporating relevant, compelling case studies within every chapter for an in-depth understanding of the topics. Freeland’s (ed) (2002) offering is composed of 32 essays by 43 Accenture consultants, and as such is quite light on theory, but heavy on practical information, even if there is little flow from essay to essay. The Freeland’s, Buttle’s and Peppers and Roger’s books are very useful for analyzing CRM programmes on a very generalized level, although in my view, a more detailed in dept work would be required to properly analyse specific programmes and their components.

Kincaid (2003) has also produced a book, which she claims is helpful to anyone in any company that is planning to invest in a [CRM] program. To that end, the book initially strives to bring the two key players in the CRM process together on the same page: the business managers in customer-facing functions (marketing, sales, service, and support) and the IT managers who support these functions. Thus she tries to close the ‘communications gap’ that is claimed to often exist between these groups, and eliminate the unfortunate consequences. Kincaid organizes the book around what she terms the CRM Program Life Cycle of four main actions: develop strategy; build infrastructure; know your customers; and deliver customer offer. This deceptively simple list entails quite a bit of work, however the book includes a ‘roadmap’ that is comprehensive and clear. The book also offers an in-depth look at how to develop the requirements and plans for each of these components, making this piece much more useful than many of the other CRM guides, however it is still merely a collection of other peoples’ ideas, however well organised and thought out.

Fortunately, Bell, Auh and Smalley (2005) recently produced an excellent piece examining the different levels of customer relationship management, and their likely effects on customer behaviour. The piece is based on the fact that as customer-organization relationships deepen, consumers increase their expertise in the firm’s product line and industry, and thus develop increased switching costs, for example, the longer you buy Toyota cars, the more used to them you become, the better you know their servicing locations and the harder it becomes to get used to a different car. This study investigated the effects of customer investment expertise and perceived switching costs on the relationships between technical and functional service quality and customer loyalty, with technical service quality hypothesised as being a more important determinant of customer loyalty than functional service quality as expertise increases. For the purpose of the study, both technical and functional service quality are hypothesised to have a reduced relationship with customer loyalty as perceived switching costs increase, and thus three way interactions between the main effects of service quality, customer expertise, and perceived switching costs are analysed in depth, yielding additional insight into the change in relative importance of technical and functional service quality in customers’ decision to be loyal. The authors found that six out of the eight tested hypotheses received support from the data, and they thus discussed the implications of these results on customer relationship management over the relationship life cycle.

Another piece, which takes a similar approach, and has a greater degree of focus on, and thus relevance to, the motor industry, is that of Slotegraaf and Inman (2004), whose research on customer equity has reemphasized the value of understanding the factors that influence satisfaction and quality. Although previous research had shown that many factors influence perceptions of satisfaction and quality, according to the authors, it has always failed to consider the potential for asymmetric effects that shift over time and are based on the attributes used to form such perceptions. Using automobile ownership experiences during the manufacturer warranty period, the authors successfully showed that, as consumers approach the end of their product’s warranty period, satisfaction with attributes that can be remedied, so called "resolvable attributes", declines at a greater rate, yet its effect on satisfaction with product quality intensifies. In contrast, satisfaction with attributes that cannot be remedied: the "irresolvable attributes", declines at a lesser rate, and its effect on satisfaction with product quality weakens over time. The authors thus use these findings to discuss several implications for further research, and practical uses in the motor industry’s customer relationship management programmes. This piece may also help explain any under performance by CRM programmes in the motor industry, as they may be focusing on the wrong attributes at the wrong time in the relationship life cycle.

As previously discussed, Yim, Anderson and Swaminathan (2004) touched on the important role of sales people in successful CRM implementation, and Corner and Rogers (2005) recently expanded on this view, claiming that the need for the people who use CRM systems to "buy-in" to the concept is now widely recognised as a critical success factor. The authors claim that, apart from bland advice on consulting all stakeholders, and selling the concepts and ideas to the potential users, there is a remarkable shortage of competent information on people issues specific to CRM, in contrast to the wide range of pieces on the technological issues. Little has been done to study how people behave within the complex social context of CRM implementation and operation, thus, stimulated by current research, this paper: "is intended to act as a ‘shout’ to those who pay more attention to the mechanistic aspects of CRM systems implementation than to the people who will use them." The authors confess that the wording is didactic, in part, and it does not conform to the usual requirements for formally argued papers, thus the paper can actually be seen as more of a guide to creating and assessing a successful CRM program, and the paper is, therefore, an opinion piece, and the authors hold no pretensions beyond that status. However, despite this fact, the practical advice and analysis contained within the paper is invaluable in the context of analysing the success of CRM programmes within the motor industry, not least due to the dearth of academic work on the human aspect of CRM.

Indeed, one of the few other pieces written on CRM which focuses on the people factors of the concept is that of Agarwal, Harding and Schumacher (2004), which was actually written as part of the McKinsey and Co. Quarterly consulting journal. However, yet again, being written in more of a practical than an academic style makes this piece possibly even more useful than an academic one,especially as it takes the fairly novel view that companies should treat a CRM program as a product or service, and its users as internal customers. In order to achieve this, the authors state that it will be necessary to make the program valuable by "pricing appropriately, advertising, and providing after-sales support." The authors state that companies have lavished attention on business and technology issues because both were glaring early impediments to CRM’s effectiveness, however they claim that these challenges stemmed from the wide variety of people: front line sales and service providers, business analysts, IT professionals and a broad array of managers, who must collaborate to ensure that a CRM program is effectively defined, delivered, and deployed.

Methodology, Questionnaire and SPSS

The main hypotheses to be tested are:

1. Most ford dealers consider customer satisfaction as a manufacturer issue and only do any customer satisfaction programmes on new car sales through the manufacturers programmes. They strive to achieve high scores because bonus monies are dependant on the outcome of the ‘View point’ programme scores. Dealerships see it as important for the money that is available and only secondly for the long term relationship a very satisfied customer can give them.

2. CRM is a concept that dealerships are familiar with but are very backward in their approach.

3. The relationship between loyalty and CRM has never been proved. In fact a lot of companies have invested heavily into CRM and are skeptical about their returns

4. The relationship between very happy, happy and satisfied customers does not have a proven link between it and new business. However dissatisfied customers will not buy again from the same source.

5. CRM is only a useful tool when there are high levels of satisfaction in the dealership experiences.

The point of the exercise is to get the sales teams’ points of view on the key issues that are more and more becoming an important part of their jobs. In order to achieve this, a survey was conducted of five Ford dealerships, aiming to cover a wide range of employees, from junior sales executives right up to senior management. However, it is expected that senior management will often be unavailable, and thus the majority of respondents are predicted to be either sales executives or junior sales executives, between the ages of eighteen and twenty six, with several of the business managers, and some senior managers responding as well. As such, it is expected that the survey will have a high proportion of younger respondents, possibly higher than is the norm for the industry, which could skew or bias the results. Although it would be hard to identify any specific bias in the results, as no real age based preference for customer service programmes of CRM programmes has been shown, Williams, Saunders and Staughton (1999) explored the increasing emphasis on customers and service quality in the new public sector, claiming that there is an increasing tendency for staff to be biased towards hard, easily quantifiable data, together with a focus on external customers in the measurement of service quality. As such, it might be expected that younger staff would show an inherent bias against CRM and customer service programmes, as these types of programmes depend more on soft customer preference data, although equally the increasingly prevalent ability of firms to use technology to analyse and quantify this data might mean that the reverse tendency is observed.

The survey was carried out in December 2004, with all sales management, dealer principle, business managers (the person in the finance and insurance role, responsible for selling finance, warranty and other insurance products) and sales executives to a total of twelve members of staff per dealership being surveyed. In contrast with the predictions above, it was actually observed that senior management, principle managers and business managers responded in every dealership, although this is partly by design: although the respondents were the staff available on the day which the dealership was subject to survey, care was taken to ensure that all managers were available on that day, and all managers were willing to answer the short questionnaire. Each dealership was surveyed in one day, ensuring that there would be no inherent bias caused by a repeat visit, where staff might have been able to discuss the survey questions in the interim period between visits. In order to attempt to avoid any location bias, the five dealer’s surveyed were quite widely geographically spaced, with dealers being located in Essex, London, Suffolk, Warwickshire and Hertfordshire. However, although this gives a fairly widespread representation of the south of England, it is possible that extending the survey to the north, such as Manchester and Leeds, and poorer urban centres, such as Liverpool and Sheffield, would have given better representation. This is because the nature of the ‘north-south divide’ often leaves people in the south of England with more available money to spend on items such as cars, and thus they might be expected to respond better to CRM and customer satisfaction programmes, given that they would be less likely to buy on price, and more likely to buy on service, compared to people who might be on tighter budgets.

The five surveyed dealers were also observed to run different CRM and customer service systems, which also could potentially be observed to have different levels of success in building relationships and satisfactions, and thus convincing customers to become repeat, or loyal customers. Indeed, as well as attempting to test the five hypotheses above, a separate sub goal of the analysis will be to try to discover which, if any, programmes, or combinations of programmes produce the best results, and are viewed in most favourable light by staff. These are the systems run by the 5 dealerships that are to be surveyed.

Dealer A

1) A data base mailing system which can send details to selected customers.

2) Finance renewal systems

3) Prospects generated through manufacturer advertising

Dealer B

1) Sophisticated sales process, data capture and customer follow up system

2) Mailing data base, with selected customers.

3) Finance renewal system

4) Prospects generated through manufacturer advertising

Dealer C

1) A data base mailing system which can send details to selected customers.

2) Finance renewal systems

3) Prospects generated through manufacturer advertising

Dealer D

1) Sophisticated sales process, data capture and customer follow up system

2) Mailing data base, with selected customers.

3) Finance renewal system

4) Prospects generated through manufacturer advertising

Dealer E

1) A data base mailing system which can send details to selected customers.

2) Finance renewal systems

3) Prospects generated through manufacturer advertising

The survey contains thirty two questions which are to be answered on a scale of one to five. Fourteen questions are targeted at determining the respondent’s attitude to customer satisfaction programmes, and also their experience of and success experienced administering these programmes. The next twelve questions are focused on customer relationship management, trying to determine how the respondent perceives CRM, and the customer response to CRM, which is generally accepted as being the most direct way of measuring the success of CRM. Finally, the last six questions are used to discover details about the respondent, such as age, years of experience and role within the dealership, in order to pick out any inherent bias between, say, senior management and the front line sales force.

The survey questions on customer satisfaction programmes are divided into several different sections, in order to better ascertain the most important, salient and successful aspects of these programmes. The questions partly refer to aspects of the customer satisfaction programmes which can be directly influenced by the front line sales staff, such as having a structured sales process and providing a full explanation of all financial products, partly to aspects of customer satisfaction which, although potentially very important, cannot be influenced by the front line sales staff, such as vehicle availability for timely delivery, vehicle reliability during ownership and the price of the vehicle, and partly to the sales staff’s opinion of customer satisfaction programmes, and their impact on factors such as generating repeat sales and employee job satisfaction. Similarly, the customer relationship management sections deals partly with the hygiene factors: what the customer needs or expects, such as dealers maintaining ‘a regular and professional relationship with them after they have concluded their purchase and taken delivery of their vehicle’ and regular contact throughout the sales process, partly on the satisfiers, which customers value even if they don’t expect them, such as ‘regular telphone calls updating them on current marketing initiatives’ and ‘the opportunity to give feedback on their dealer experience through structured questionnaires’ and finally on the potential benefits of good customer relationship management, such as the development of long term relationships with dealers, and the building of trust.

The SPSS analysis has produced around sixty pages of analysis, large portions of which are irrelevant to the hypotheses to be tested, however there are several salient points to be aware of. Firstly, t-test statistics on the customer satisfaction questions has revealed that most staff members surveyed appear to believe that price is much less important a factor in customer satisfaction than other potential factors, as the two questions on price have received significantly lower agreement than the other questions relating to the causes of customer satisfaction. Even more significant is the fact that the standard error of the means for male respondents to these two questions are both less than 0.2, indicating that there is largely uniform agreement that most respondents either slightly disagreed with these statements, or neither agreed nor disagreed. The female respondents showed less of a tendency to disagree with these two statements, however the standard error of the means for these two questions was also quite high, indicating possibly one or two respondents had skewed the data: a definite possibility given the small sample size. The results did show that meeting or exceeding customer expectations was viewed as one of the most important determinants of customer satisfaction, with a male score of 1.09 and standard error of just 0.41, although vehicle reliability, with male score 1.19, standard error 0.54, was also highly important.

Regarding the customer relationship management questions: there was a slight observable agreement with the statements that customers valued regular mail shots, telephone calls and newspaper advertisements, however without a larger population sample, it would be difficult to call these significant results. By far the most significant results of this part of the survey are that customers like to feel valued, which has male agreement of 1.26, with standard error just 0.061, and that customers expect regular contact throughout the sales process, which has male agreement of 1.45, and female agreement of 1.29, thus supporting the view of many authors that CRM should primarily be about people interacting, rather than using technological advances such as database management to simply send out direct mail and telephone calls.

Further independent samples tests, including Levene’s Test for Equality of Variances, showed that many of the results were not actually conclusively significant, with the notable exceptions of customers valuing regular telephone calls, at 92.6% significance, regular contact with customers, through an effective CRM process being essential to retaining customers and increasing sales performance, at 98.1% significance, and satisfied customers being more likely to develop long term relationships with dealerships, at 96.5% significance. These last two results have similarly positive scores to customers valuing regular telephone calls, although slightly lower from the female respondents, and thus these significance results further back up the view that people to people contact and customer satisfaction are key to good CRM.

The Anova descriptive data provides less clear cut results, although it does help reveal some of the age related biases, for example on the question of whether price is most important, which received a result of 3.45, younger respondents appeared considerably more likely to agree with this statement, with 18-21 year olds providing a mean response of 2.60, whereas respondents aged 40 and over averaged 4.09, despite at least one of the older respondents strongly agreeing with the statement. However, yet again, the small size of the respective age samples makes it difficult to draw significant conclusions from this data. One useful piece of information that can be garnered from the Anova data is that all respondents over the age of 33, all respondents who had been in the industry more than six years and all managers and senior managers strongly agreed that meeting or exceeding customer expectations was important in creating customer satisfaction, indicating that not only is that currently the case, but also that it has been the case in the motor industry for a significant period of time, and is thus now very important.

Results and Analysis

The data will now be applied to the main hypotheses to see whether it supports or opposes them:

1 Most ford dealers consider customer satisfaction as a manufacturer issue and only do any customer satisfaction programmes on new car sales through the manufacturers programmes. They strive to achieve high scores because bonus monies are dependant on the outcome of the ‘View point’ programme scores. Dealerships see it as important for the money that is available and only secondly for the long term relationship a very satisfied customer can give them.

This hypothesis will be supported if the manufacturer based questions, such as price and reliability, have a higher level of agreement than the dealer and sales agent based questions such as explanation of financial products. The second part of the hypothesis should be tested using questions ten, eleven and twelve to determine whether respondents agreed more with customer satisfaction contributing to job satisfaction or repeat sales, and also question twenty five to determine if long term relationships are seen as an important part of customer satisfaction.

In terms of the manufacturer based questions, defined as questions five, six and eight, and using only the male results as the female sample is too small, scores are 3.49, 1.32 and 1.19 respectively, with standard errors of 0.18, 0.065 and 0.054. In contrast, the sales agent based questions, one, three, seven and nine, have scores of 1.79, 1.83, 1.51 and 2.00, with standard errors of 0.122, 0.113, 0.079 and 0.123 respectively. This indicates that whilst price is not seen as a deciding factor, the two main manufacturer concerns: reliability and delivery time, are seen as more important than the sales agent concerns, although not significantly so, as there is general agreement on all concerns except price. Additionally, the question of whether showroom experience or price is more important received a score of 2.87, indicating further that manufacturer and sales agent concerns are viewed as being approximately equally important for customer satisfaction.

Regarding the question of whether customer satisfaction is viewed as more of a short term financial benefit than a long term customer benefit, questions ten, eleven and twelve received male scores of 1.26, 1.68 and 1.81 respectively. This indicates that whilst sales staff do see repeat sales as the key benefit of customer satisfaction, long term, more intangible benefits such as job satisfaction are also seen as important. However, the agreement that job satisfaction is important for increasing overall sales does again tend to indicate that customer satisfaction is primarily seen as a method of increasing monetary gain.

2 CRM is a concept that dealerships are familiar with but are very backward in their approach.

For this question, it is hard to use the survey to give a concrete answer, with possibly the best route being to use questions fifteen through to twenty to see whether dealership staff tend to agree with the older views of customer relationship management as being primarily concerned with managing databases in order to advertise and market themselves better, or whether they are actually more concerned with building relationships and encouraging people to people contact.

With the male scores from questions sixteen, seventeen and eighteen being 2.49, 2.28 and 2.38 respectively, it is clear that there is some agreement with what the literature claims is a somewhat outdated view: that regular mail shots, telephone calls and newspaper advertisements are important. Equally, the Anova data shows that there appears to be generally more agreement with these three statements from staff that have worked in the industry for more than six years, are aged over 27 and hold manager or senior manager positions. However, these results are not definitely significant, and there seem to be very little correlation between age, role and experience and the belief in the power of newspaper advertisements, although this could be hypothesised to be due to personal experience of the relative success or failure of these advertisements.

Despite the tendency of staff to agree with these older CRM methods, questions fifteen, nineteen and twenty have male scores of 1.36, 1.45 and 1.87 respectively, and all have standard errors of less than 0.1, indicating that staff are increasingly moving in favour of the more modern CRM techniques, such as professional relationship building and structured questionnaires.

3 The relationship between loyalty and CRM has never been proved. In fact a lot of companies have invested heavily into CRM and are sceptical about their returns.

In order to demonstrate whether dealers agree with this statement, the results from questions twenty two, twenty three, twenty four and twenty five should be analysed to determine firstly whether effective CRM can develop the trust necessary to develop loyalty between the customer and the dealer, and secondly whether companies believe that CRM does provide good returns, and whether companies perceive these returns as being due to CRM.

The male results from these questions are 1.66, 1.77, 1.43 and 1.55 respectively, all with standard errors of around 0.1 or lower. This tends to indicate that dealers do believe that, if a trust relationship can be developed, and regular personal contact can be made, then it should lead to customers listening more to their sales representative and staying loyal to the same dealership. Indeed, it is interesting to note that the strongest agreement observed out of these four questions is with the statement: Regular contact with customers, through an effective customer relationship management process is essential to retaining customers and increasing sales performance, (Question 24) closely followed by A satisfied customer is more likely to develop a long-term relationship with the dealership, (Question 25) thus indicating that dealers do believe that there is a relationship between CRM and loyalty, and that CRM programmes can show tangible benefits. Furthermore, the greatest agreement with these statements came from mangers and senior managers, who can be seen as holding the views of the companies, thus almost completely opposing the hypothesis that companies are sceptical about the returns from CRM programmes.

4 The relationship between very happy, happy and satisfied customers does not have a proven link between it and new business. However dissatisfied customers will not buy again from the same source.

This hypothesis is much more difficult to prove, as the survey questions do not necessarily allow the distinction between happy customers providing new business, and dissatisfied customers failing to return. However, given that companies tend to believe that effective CRM can generate loyal customers, questions ten, eleven, twelve, twenty five and twenty six should enable us to produce some analysis concerning this hypothesis.

Indeed, the male results for questions ten, eleven and twelve are 1.26, 1.68 and 1.81 respectively, and for twenty five and twenty six they are both 1.55. As such, it is possible to interpret these results as implying that high levels of customer satisfaction increase both the tendency for a customer to buy again, and also the level of job satisfaction for the sales person. However, there is lower agreement with the statement that the high levels of job satisfaction, caused by the customer satisfaction, leads to an overall increase in sales, thus it could be concluded that although very satisfied customers will tend to buy again, their experiences may not necessarily encourage others to buy from this dealer, as the overall level of sales isn’t believed to increase all that much. Equally, the high levels of agreement with questions twenty five and twenty six tends to suggest that, as more satisfied customers will develop long term relationships and satisfaction is key to customer relationships, that failing to satisfy customers may lead to them being lost.

5 CRM is only a useful tool when there are high levels of satisfaction in the dealership experiences.

This is another hypothesis that is difficult to answer conclusively, mainly due to the small size of the sample and the limited statistical analysis available, however it can best be analysed by correlating the dealerships current CSP ratings (Question 31) and the measures of success of CRM, which can be gathered from the answers to questions twenty four and twenty five:

Although there are some positive correlations between dealership customer satisfaction programme ratings and the perceived success of the CRM programmes, these correlations are minor, and the R squared values indicate that they are not significant. Thus there is very little evidence to support the hypothesis that CRM is only useful when customer satisfaction levels are high, however here customer satisfaction levels are only assessed using dealership CSP scores, which are a fairly inaccurate method of determining the actual levels of customer satisfaction.

There are several noticeable shortcomings associated with the necessity of using survey data, most notably that the survey data can be described as ‘second hand’ data i.e. it only shows the views of staff within the dealerships, and thus could include inherent biases. Bias has been defined as any force, tendency, or procedural error in the collection, analysis, or interpretation of data which provides distortion (Tortolani, 1965), thus the presence of bias in a market research study will tend to create inaccurate and unreliable results. Company executives who think they understand their markets are often misled by an apparently regular pattern of sales and by consistent results from consumer surveys. Typically, consumer research has been a matter of major benchmark surveys that review the position of a brand at one point in time, and most manufacturers have been content to do such large scale surveys once every two or three years and to supplement them with special studies from time to time. These surveys can present misleading information about consumer behaviour and preferences, even if sampling procedures are perfect, and thus are not necessarily of much use for firms looking to assess the effectiveness of their customer satisfaction programmes and CRM programmes.

Another potential problem in this survey is that of so called hark back questions Westefeld (1953) which are defined as certain types of questions that may result in the possibility of misinterpretation arising in the answers, as they ask respondents to report how their opinions have changed over a period of time. This kind of question is sometimes asked where bench mark data are not available, but where it is desired to get some indication of changes in thinking over a period of time, and thus may show bias dependent on how peoples’ impressions, circumstances and points of view have changed over time. Also, the question may be asked in successive studies as a check on trend questions, or to cover different facets of the problem under study. The answers to a hark-back question have been found to be more likely to present a more favourable picture of the present situation than would the answers to actual rating questions in two or more trend surveys. Thus a hark-back question, by itself, is likely to give misleading results if one is interested in measuring changes in attitudes over a period of time, a principle which has applications in many phases of marketing research, such as assessing the success of CRM and customer satisfaction programmes. Within this survey, questions two, nine, twelve, fifteen, twenty four and twenty five can be seen as potential ‘hark back’ questions as they are all based on the effects of regular training, contact and so on, on customer satisfaction and relationships over time. Indeed, with male scores of 1.72, 2.00, 1.81, 1.36, 1.43 and 1.55 respectively, and, with the exception of question nine, more favourable scores than other, similar questions around them, there is potential evidence for a hark back bias, although yet again the survey sample is too small to gain really significant evidence for or against such a bias.


Of the five hypotheses, there is evidence to partly support the second part of the first hypothesis: dealership staff strive to achieve high customer satisfaction scores because of the money that is available, however the answers do not specify whether this is due to the bonus monies, which are dependant on the outcome of the ‘View point’ programme scores, or simply due to an actual increase in sales. Equally, the evidence doesn’t conclusively support the view that dealerships see customer satisfaction programmes, and their success, as important primarily for monetary gains, and only secondly for the long term relationship a very satisfied customer can give them, as both these criteria receive high scores. Also, there is no evidence to support the view that most ford dealers consider customer satisfaction as a manufacturer issue and only do any customer satisfaction programmes on new car sales through the manufacturers programmes, as many dealers reported that their training and customer satisfaction initiatives were very successful, thus indicating that they are actively encouraging them.

The evidence also gives reasons to discount the second hypothesis, as despite the general agreement with the usefulness of older CRM and other marketing methods: regular mail outs, telephone campaigns and newspaper advertisements, particularly amongst more senior members of companies, there is a larger majority of evidence to support the view that firms are increasingly leaning towards the newer CRM methods. However, it is interesting to note that this tendency towards newer methods is only seen in the response to surveys, and more useful information could probably be garnered from data on the preferred types of CRM that were actually used by the firms, for example whether they preferred to use regular mail outs, or personal contact with customers, in order to attract more business.

With regards to the third hypothesis, the literature definitely supports the view that the relationship between loyalty and CRM has never been proved, and this paper makes no claims to conclusively prove or disprove such a sweeping statement, however it does provide some evidence, in the form of the positive response to questions twenty three and twenty four, to support the view that good quality customer relationship management can lead to trust and loyalty from customers. In fact, if the views of the managers and senior managers can be taken as being the view of the companies, although there is no evidence from the survey to show whether or not a large number of companies have invested heavily into CRM, the results support the view that said companies are far and are sceptical about their returns. However, the fact that managers and senior managers showed a greater degree of belief in the value of CRM than sales executives and junior sales executives could indicate that this part hypothesis is at least true on one level: perhaps the managers and senior managers invest heavily in CRM believing that it will boost sales and performance, whereas the parts of the company that are at the ‘sharp end’ of the business: the sales executives and junior sales executives, are more sceptical about current CRM programmes ability to produce results.

As for hypothesis four, the evidence, from the respondents’ beliefs that satisfaction is important in creating loyalty and repeat customers, tend to support the view that dissatisfied customers will not buy again from the same source. However, it is difficult to draw a strong conclusion on the nature of the relationship between very happy, happy and satisfied customers and new business. With this in mind, it is fair to say that the data agrees with the view that there is not a proven link between happy customers and new business, a fact that has definite impacts on the value of CRM and customer service programmes to the motor industry.

Hypothesis five can neither be proved nor disproved, due to the crudity of the survey data, and the fact that very little evidence on the levels of customer satisfaction for the five dealerships exist. The data on the dealership’s CSP scores does not provide any direct measurement of customer satisfaction, and the data on the success of CRM is all dependent upon the respondents’ views of the success of CRM, which might well be expected to be positively correlated with the CSP scores, as the CSP scores are one of Ford’s key measurements of dealer success. Thus, as this could well explain away and positive correlation, there is definitely an argument that the data gives evidence to disprove this hypothesis, although as the scale is so crude, and most respondents either agreed or strongly agreed that CRM was a good thing, no such conclusion should be drawn.

Thus, on the question of whether or not the motor industry’s customer satisfaction programmes and customer relationship management programmes build stronger bonds with the customer, and thus help sell more cars, the results are inconclusive. On the one hand, the survey data does offer evidence to support the view that the motor industry’s CRM and customer satisfaction programmes do build stronger bonds with the customer, and that these stronger bonds can lead to repeat business, or at the very least, can help prevent the loss of existing customers. On the other hand, there has been no evidence provided to suggest that effective CRM and customer satisfaction programmes do actually lead to new business, thus the question of whether or not these programmes help sell more cars is slightly more difficult to answer. Whilst it is true that a loyal customer will most likely return to the same dealer the next time they wish to buy a new car, the most likely manifestation of customer loyalty will be the customer using the dealer’s ancillary services, such as servicing, MOT provision etc. The fact that the survey indicated that the most decisive factor in customer satisfaction was the reliability of the car throughout its life possibly indicates that it will be the car itself, rather than the dealership, that generates the required level of loyalty to ensure further car sales.

Finally, the fact that hypothesis five did not receive any support from the survey data poses yet another question: if the success of CRM does not depend upon the levels of customer satisfaction, then this tends to suggest that CRM and customer satisfaction program success are independent of each other. As a result, even if it can be shown that CRM and customer satisfaction programmes are generating new business, it is possible that only one of the two is actually having a beneficial effect, and the other one could just be a waste of resources.


In order for the motor industry to decide whether or not CRM and customer satisfaction programmes are actually generating new car sales, as opposed to merely increasing the demand for dealership servicing, or simply helping keep customers happier, it will be necessary to conduct wider ranging surveys of customers over time, in an attempt to correlate perceived customer satisfaction with the tendency to buy future cars from the same manufacturer, and/or dealer. It will also be necessary for marketing executives, both those at the manufacturers and at the dealerships, to endeavour to maintain a management information system: a dynamic and current data bank of all customer preferences, behaviours and trends, as a basis for understanding the consumer market for a company product. Whilst it is true that recall techniques are better now than they used to be, and they are often useful in survey work, it should not be felt that they, or any other techniques, can be used as a valid or effective substitute for continuous surveying.

In this vein, Ford is already in a strong position, as it already has buyer surveys in place and being continuously administered by dealerships, however it is only by rigorous analysis of the data that these surveys produce that solid conclusions can be reached. For example, Ranaweera and Prabhu (2003) conducted a study, which examined the combined effects of customer satisfaction and trust on customer retention and positive word of mouth. Once data had been gathered from a large scale survey of fixed line telephone users in the UK, it was only through rigorous categorisation and analysis that it was confirmed that both satisfaction and trust have strong positive associations with customer retention and word of mouth: a corresponding result from Ford’s customer surveys would be of vital importance to the motor industry. Contrary to some assertions in the literature, however, the authors found that the linear effect of satisfaction on retention is much stronger than that of trust, but as a driver of word of mouth, however, trust is only marginally weaker than satisfaction in the telephone industry. Another important result was produced from further quantitative analysis, supported by qualitative evidence from the survey, and suggested that even a satisfying service recovery process might still be inadequate to prevent loss of trust. These results not only illustrated the need for telephone firms to develop strategies that focus on building both satisfaction and trust, but also that ‘satisfactory’ service recovery may not be a panacea for all service failures. As can be seen from these results and conclusions, a survey of this scope and scale, backed up by the right analysis, has provided invaluable data for the fixed line telephone industry in the UK, however no corresponding survey or analysis has yet been conducted by the motor industry, and thus there is still confusion and questions over the value of CRM and customer service programmes for the industry.

In terms of the recommendations produced by the survey, the fact that the third and fourth hypotheses are supported by the available evidence tends to indicate that currently CRM and customer satisfaction programmes do not produce significant numbers of new customers, and thus are of limited value to manufacturers and dealerships: the evidence tends to suggest that the most important factor is producing a desirable and reliable car. However, the fact that the evidence supports the view that most dealers do not see customer satisfaction purely as a manufacturer issue, and the tendency for companies to believe that dissatisfied customers will neither buy again, nor return for servicing, indicates that CRM and customer satisfaction programmes still have a large role to play, and should not be neglected.

Promisingly, the evidence tends to support the view that CRM is not only a concept that dealerships are familiar with, but also that many dealerships are developing a more modern, people oriented view towards CRM, and are also realising that customer satisfaction, and customer satisfaction programmes, can have benefits other than merely providing extra money through the ‘View Point’ and other, similar programmes. This, combined with the fact that managers and senior managers appear to be positive about the returns from CRM and customer satisfaction programmes, tends to indicate that these concepts and programmes will become yet more important in the motor industry in the future, and thus there could be yet more benefits for companies which endeavour to develop these programmes now. Indeed, given that cars are usually items with a low turnover rate, with many cars lasting five years or more, given that the literature puts forward the view that many of the most promising CRM and customer satisfaction developments are relatively new, it is possible that the effects of these new programmes on the tendency of customers to make repeat purchases has not yet been realised. It is an interesting potential ‘catch-22’ that in order to produce the greatest levels of customer satisfaction, manufacturers must provide increasingly more reliable cars, which will last even longer, resulting in an even longer turnover period between sales to the same customers, and thus reducing the total number of cars sold. With this, and the other factors raised, to consider the main recommendation of this piece is that motor industry firms continue to develop their CRM and customer satisfaction programmes, whilst endeavouring to determine whether these programmes increase the number of good referrals and new customers, and if not, then how they can use these programmes to gain the all important new business that is vital in the modern, competitive, global motor industry.


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