In the past fifteen years, customer satisfaction has influenced the new car retail market heavily. “C.S.I.” stands for “Customer Satisfaction Index.” Every new car manufacturer has an index that rates the performance of their dealers. This index is a score of the customer’s buying experience and it is calculated by responses to a survey that is mailed or emailed to the customer. What is important to remember is that the dealer’s allocation, “Hold-Back” and bonuses can be influenced by this score.
For example, dealers may receive more new cars from the manufacturer if they have a good CSI score. Conversely, if dealers have a bad CSI score, they may receive fewer vehicles. Manufacturers even pay cash bonuses to dealers for good CSI scores. Alternatively, dealer “hold-back” payments may be reduced or eliminated for bad CSIs. In other words, it will cost dealers significant income if enough customers submit bad surveys.
The manufacturers would like to have their surveys answered honestly so they can improve their brand and customer service. However, because these scores are tied to financial benchmarks for the dealers, most dealers do not necessarily prefer to have these surveys answered honestly, but would rather have buyers simply respond that they are “completely satisfied.” This can result in the dealer “coaching” the score. In other words, salesmen will essentially tell the customer how to complete the survey. As a car buyer, it is necessary to know the potential importance that the CSI may play before beginning the negotiation process. Many dealerships will pay the salesmen an extra commission for every “completely satisfied” survey they receive.
A salesperson generally won’t discuss the CSI during the negotiation, because if he infers that the CSI survey has value to the dealership, the customer could use it as a negotiation tool. Often, after the terms of a deal have been negotiated, the salesman will display a sample of the survey and stress the importance of a “Completely Satisfied” response on every question. Because the price has already been negotiated, they know this “coaching” won’t affect the outcome of the sale. Obviously, manufacturers do not approve of this “coaching” behavior.
Customers should introduce the CSI before they begin to negotiate. However, it should never be used as a blunt negotiation tool. Just let the dealer be aware that you realize it is important to them. If the customer doesn’t bring it up before the negotiation, it will have no potential influence on the price. If it is brought up beforehand, in some cases the dealer won’t be as eager to engage in gimmicky negotiation techniques.