How Customer Satisfaction Can Build Value for Your Diesel Repair Shop
If you're reading this article, it's safe to assume that you want to build value for your diesel repair shop, whether you're looking to sell in the near future, or you're just planning for your eventual retirement. We've gone through a lot of different ways that you can go about building value in past articles, but today we're going to cover one you might not have given much thought: customer satisfaction.
That's right. Making sure you're customers are satisfied with the work you're doing and the experience they have at your shop is more than just a way to keep them coming back. It can actually add value in the eyes of potential buyers. And don't you want to do everything you can to get top dollar for your shop?
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What is Customer Satisfaction?
Before we dive into how you can build value for your repair shop through customer satisfaction, it's important to understand just what that means. Simply put, customer satisfaction measures just how satisfied your customers are with the service they've received.
The key word in that sentence? Measures.
You can assume your customers are satisfied with your shop. They can tell you themselves they're satisfied. But unless you have actual hard evidence that they are in fact satisfied, you run the risk of losing touch with your customers. And losing those customers to a competitor.
Plus, without that hard evidence, you won't be able to prove to a potential buyer that you have a solid customer base, which won't give you any added value to your shop. We'll go into the specifics of how to measure customer satisfaction a little later on, but in short, one of the easiest tools to use is a customer satisfaction survey. Not all surveys are created equal, though, and some don't do a good job of actually predicting whether or not someone will return to your shop.
In the end, though, if the survey you use shows that your customers aren't as happy as you thought, it's important to make some changes in the way your shop operates. Maybe it's time to freshen up that waiting room. Or maybe customers would find it easier to schedule their maintenance visits online. Try to think of ways to keep those customers happy and coming back—and maybe even referring you to someone they know.
Want to know more about other metrics that are important to measure? Check out our article on which metrics can help boost profitability.
Why Is Customer Satisfaction Important to Potential Buyers?
As we mentioned, it's important to potential buyers that a business is satisfying its customers. This is true for a handful of reasons.
First, if you can prove that your customers are happy and willing to come back again and again, you can show the buyer that you have a consistent revenue stream. As you've probably heard before, it's cheaper to keep a current customer than it is to go out and find a new one. So if you have a good customer base that's happy with the service they've received, then you'll be saving the potential buyer time and money. They won't have to worry so much about where the money comes from each month and can focus on growing the business even more.
Additionally, by showing potential buyers just how satisfied your customers are, you're also giving them insight into how they can get even more business.
People who are happy with the service they receive from a business are more likely to recommend that business to friends and relatives. Those referred customers come to the shop without any additional effort on the part of the owner (aside from ensuring customer satisfaction), so it's again saving time and money. If they, too, are happy with the service they receive, they might refer your shop to even more people, thus growing the business outside of additional marketing or promotional efforts. That possibility of a referral network is pretty appealing to potential buyers.
Measuring Customer Satisfaction
We mentioned earlier that one of the most important aspects of customer satisfaction to a buyer is whether or not you have an accurate handle on it. This all comes down to how you're measuring.
Again, one of the easiest ways to understand the satisfaction of the customers who come to your shop is by having them answer a survey. But you want to make sure that the survey is actually giving you the information you need. That's where the Net Promoter Score (NPS) comes in.
Going along with the idea that happy customers will refer your shop to others, the NPS asks one simple question to provide you with that important information: "On a scale of 0 to 10, how likely are you to refer our business to someone you know?"
Using the responses from that question, your NPS is calculated using a formula that gives you a score between -100 and 100. In this scale, any score above 0 is good, 50 to 69 is excellent, and anything over 70 is outstanding.
The responses you get from customers are divided into three categories: anyone who gave a score of less than 6 is a detractor, a 7 or 8 is a passive, and a 9 or 10 is a promoter. Obviously, you're aiming to have more promoters than passives or detractors.
Understanding just how your customers feel about your shop can help you make a plan for the future. Once you have this base idea of satisfaction you can dig into the reasons behind your score and make a plan to improve and grow your business even more.
It's often good to have customers participate in this survey immediately post-service. You can have them fill it out as part of the exit paperwork, you can send it to them in the mail, or you can send it via email. Each method has its pros and cons, so you'll just have to figure out what works best for your shop.
In the end, working toward ensuring you have satisfied customers can not only keep your business now, it can also help you to grow. And, if you're looking to sell your shop, it can help increase the eventual sale price. So make sure you have a handle on how your customers are really feeling. It can mean even more profits for you.
Need more ways to help boost profits and increase value? Check out our Repair Shop Value Program!