Managing Satisfaction in the Automotive Industry: The Economics of Saving Expected Defectors

Abstract

This research was designed to empirically understand whether "intending" defectors (those who were completely dissatisfied with their product and definitely would not repurchase the brand when next in the market) could be regained as customers. Additionally, the variable "amount of time since the complete dissatisfaction was reported" was also tested. Three groups of automotive customers (200 subjects per group) took part in the study. All subjects had purchased or leased a new vehicle within the past 18-30 months. There were two experimental groups (Group 1 reported their dissatisfaction within the past 90 days; Group 2 reported their dissatisfaction 90-180 days previously) and one control group. Each subject in each Experimental Group was telephoned by the intervention team and an attempt was made to completely resolve their dissatisfaction. For Groups 1 and 2, 85.5% and 83% had their dissatisfaction resolved, respectively. For Groups 1 and 2, 47.4% and 29.5%, respectively, repurchased the brand at their next opportunity. In the Control Group, aside from 4 subjects who accidentally had their problems resolved, defection was 100%. The following general conclusions were reached: (1) unresolved complete dissatisfaction (addressed or not) leads to 100% defection; (2) timely resolution of dissatisfaction can lead to a regain rate of close to 50%; and (3) the longer the dissatisfaction is allowed to sit, the less chance of regaining the customer.