Carmakers shift gears to better customer service for higher sales

Ford Motor Company has launched an extended service plan for every new car sold in a bid to woo customers. FILE PHOTO | NMG
Ford Motor Company has launched an extended service plan for every new car sold in a bid to woo customers. FILE PHOTO | NMG 

In a move set to increase its sales, automobile firm Ford Motor has launched an extended service plan for every new car sold.

This is aimed at protecting motorists from unexpected vehicle repair costs at a time new vehicle sales have dropped by 27.6 per cent in the first quarter of 2017, according to the Kenya Motor Industry Association (KMIA).

“Ford launched the product in Kenya following a realisation that many motorists were incurring high costs due to unforeseen issues to do with vehicle failure,” said Kagwiria Mbiti, Head of Ford Operations at CMC Motors.

In addition, he said poor road conditions are causing high levels of traffic congestion, poor road surfaces, heavy dust while low-quality fuels result in vehicles requiring “far more frequent” servicing than in other markets.

“The Ford Protect plan therefore caters for all service and maintenance costs for a period of between three and five years. This offers Ford owners complete peace of mind, an optimal ownership experience and preserves the vehicle’s resale value,” he said.

The motor industry in Kenya is currently experiencing a decline in sales attributed to an economic slowdown and jitters over tomorrow’s elections.

According to the KMIA report released in March this year, car sales in the first quarter declined to 2,687 units, from 3,699 units in the same period last year.

In this climate, Ford is introducing an after-sales service that protects car owners from incurring high costs from damage in order to encourage consumers to buy their products not only for use, but also as a future investment that will still be in good condition to be resold.

“Ford Motor Company launched the product in the market so as to significantly lower the total cost of ownership (TCO) for customers and encourage new car ownership in Kenya,” said Mr Mbiti.
For consumers, such after-sales services can act as a trigger point in influencing their purchase decisions, even at a time when buying decisions are generally based on the best prices.

A survey conducted by global management consulting firm Bain and Company on the importance and impact of after-sales in the automobile industry, found that it can lead to customer retention and increased sales during a slump, due to referral marketing.

“Car manufacturers have opportunities to improve their business performance in the short term by focusing more on the customers they already have by providing exceptional after-sales service,” says Bain.

“A strong after-sales service experience is the key point of contact with customers at the critical time when most people are weighing their next vehicle purchase.”

It adds: “Owners’ brand enthusiasm tends to erode as the vehicle ages and the warranty expires but it is at this point — about four years after the initial sale — that car manufacturers capitalise on their loyalty advantage by using maintenance visits as opportunities to reinforce their ties with loyal customers and win over disaffected customers.”

The survey revealed that loyal customers are 10 times more likely to repurchase or lease a vehicle of the same make or brand as their current one and they are also far more likely to recommend their vehicle brand to a friend, with each loyal customer providing nearly five purchase referrals, resulting in increased revenues and new-car sales growth.

After-sales services also win over disaffected customers who would have otherwise criticised the brand and influence other consumers.

“The car manufacturers we studied excelled at turning unplanned repair visits — those critical moments of truth on which customer relationships can hinge — into opportunities to strengthen customer bonds,” Bain’s report says.

“While most carmakers aim to ensure that the service experience does as little harm as possible, they set out to surprise customers with ease and convenience when they expect it least and value it most.”