Customer Satisfaction: The Key to Customer Loyalty

Arvind Mathew, President & Managing Director, Ford India

The Indian automobile industry has come a long way since the first car ran on the streets of Bombay in 1898. It was the deregulation of the passenger car market a decade ago that transformed the industry into a growth engine for the nation's economy. The industry has a symbiotic relationship with several diverse sectors that include auto ancillary, fuel retailing, road transportation, IT services, and engineering design industries. Over the last couple of years, the auto industry has proven to be a strong driver of growth for the manufacturing sector in the country.

One of the largest economies in the world and one of the top five nations in terms of purchasing power, the pace of growth in India is expected to be more rapid over the next few years. Rising incomes, reducing interest rates, a greater awareness of global products & services, and a growing consumerism are rapidly changing the market dynamics in the country. There have been geographical shifts in purchasing power as mini-metros, such as Chandigarh, Madurai, Pune, and Surat, account for much of the rapid growth in the country. India has emerged as a top-priority for global marketers and the industry is fiercely competitive. To cater to this demand, Ford has embarked on an aggressive market representation program and will soon have 115 dealership facilities across 79 cities in India. Ford has adopted a hub and spoke model of distribution, where a primary dealer in a metro area services the growth in the surrounding region.

Arvind Mathew Arvind Mathew is the Managing Director and President of Ford India. He took this position in August 2005. As Ford nears a decade of operation in India, Arvind will lead the company's aggressive growth phase. With a robust portfolio, strong supplier & distribution network, the company is building a stronger presence for Ford in India. Arvind's rich experience in new vehicle programs and broad international experience will help accelerate Ford's growth in India. In his previous role, as Vice President for Manufacturing and Supply at Ford India, Arvind was instrumental in development of new vehicle and powertrain programs for India. Additionally, he played a lead role in building a robust supplier base for localisation programs in India and also in promoting exports from the country. Arvind has held a range of engineering, product planning, and new product implementation positions in North America, Germany, Spain, Turkey, and the UK, and has worked on Ford and Mazda vehicle programs. Arvind Mathew joined Ford Motor Company in 1990 as a Business Planning Analyst. A mechanical engineer from the Birla Institute of Technology and Science, Pilani, Arvind completed his MS in mechanical engineering and MBA from the University of Michigan.

 
Today, just about seven of every thousand people in India own a car. When compared to ownership in Australia with over 500 cars per 1000 people, and North America at over 600 per 1000, this statistic represents immense growth potential. Yet to survive and succeed in the increasingly complex automotive business, manufacturers and dealers will have to intensify their focus on fulfilling customer needs and expectations. At the retail level, many presume that customers are on the lookout for the best bargains. On the contrary, research has shown that most customers look for the five E's - empathy, energy, efficiency, expertise, and ethics. Trends demonstrate that customers are perfectly willing to spend their money, as long as quality of service is guaranteed. An astute marketer needs to repeatedly assure customers that they have made a wise choice in their purchase decision.

Delving into the basics, the buying process begins when a customer recognises an unsatisfied functional or psychological need. While functional needs are directly related to the performance of the product, the psychological needs are associated with the personal gratification the customer gets by purchasing the product. Customers weigh factors like economy, value, convenience, choice, and the overall retail experience.

The automotive customer lifecycle is broadly divided into the sales, after-sales, and the resale experience. At Ford, with a rich understanding of the business, the company has taken special initiatives to truly enhance every phase of this lifecycle. To enhance the purchase experience, Ford has embarked on a global corporate identity program, titled Brand@Retail. Specifically designed to increase customer satisfaction, and to ensure a superior brand and purchase experience, this program provides consistent representation of the brand's identity at the retail level. All Ford dealership facilities across India will soon have the Brand@Retail environment, and will compare with any other Ford dealership experience across the globe.

The greater challenge in today's marketing environment, however, is retaining the customer. Research shows that it is 5 times easier, and 15 times less expensive, to retain rather than acquire a new customer. Last year, Ford India launched 'Ford CarGainz' - an innovative program in the automobile industry, exclusively designed for the Ford vehicle owner. CarGainz is a first of its kind initiative in India, and demonstrates Ford's strong focus and commitment to customer satisfaction. It is .a customer loyalty program that rewards servicing, regular maintenance, and the purchase of accessories from Ford authorised dealers and service centres. By rewarding customers for following scheduled maintenance procedures through authorised Ford dealerships, CarGainz seeks to educate the consumer on the risks they incur with non-genuine spare parts and unauthorised service centres. CarGainz helps Ford owners immensely by encouraging them to maintain their car as per prescribed frequencies, thereby getting the best performance from their vehicles and earning a higher value at resale. In little over a year, over 60,000 customers have enrolled in the CarGainz program, which speaks well for the value of this innovative program.

The post-purchase experience and cost of ownership are integral parts of the auto business. Proper vehicle maintenance ensures a trouble-free ownership experience. To encourage this aspect, Ford India recently introduced the Total Maintenance Plan (TMP) for all its models. Starting at a price as low as Re 0.39 per kilometer, the plan covers all scheduled maintenance, and includes all mechanical and electrical repairs, except wear & tear items, fuel, and accident repairs. Ford's TMP insulates the customer from spare parts price revisions and increases the resale value of the car.

Moving forward, auto makers realise that innovation would need to be the engine for greater growth. Customers are demanding new and improved features and care especially about value. Recognising this critical factor, Ford India has an aggressive localisation program in place. Over 90% of the Ford Ikon has been locally sourced; with the recently launched Fiesta, the company has already achieved 70% localisation. Ford vehicle spare parts and components are competitively priced and the company has migrated to a repair versus replacement approach during the after-sales period. Ford also has a remanufacturing program on certain high-cost parts to minimise the cost of ownership. Remanufactured parts are fully certified and come with warranty for the customer. Demonstrating its pursuit for excellence and best practices, Ford is also one of the first manufacturers in India to offer accredited service standards for its dealerships with Ford's QualityCare. A QualityCare certified dealership delivers consistent service standards that are measured against set benchmarks. Dealerships are regularly audited for sustaining QualityCare standards. QualityCare covers the entire service process by ensuring that 12 key elements of the entire process are measured and evaluated. Some examples of the metrics would be Deliver car on time, Fix it Right the First Time, etc. Ford India has certified 29 service facilities as QualityCare facilities, catering to 80% of Ford customers across the country. The benefits of QualityCare are clearly reflected in JD Power's survey, where Ford India is among the top three manufacturers in customer satisfaction.

To sum up, history has taught us that if we do what is right for the customer, success will follow. For dealers the key to survival is unbeatable customer satisfaction. To prosper, we need to remind ourselves that we got into this business because we are passionate auto enthusiasts at heart. I know I love this business. I think our future challenge will be making sure the rest of the world shares the same passion we have for our products!