Walter Sullivan the creator of Sullivan Ford Auto World pass away and his oldest daughter Carol Sullivan-Diaz, a health care administrator by profession took over the business and found out that the family business is in economic trouble founded on existing financial performance and market outlook. In addition, CSAT results from car buyers show that the company has problems with their service quality.
Sullivan Ford Auto World Facts:
- Average sales of 1,100 cars per year
- Announced Revenues:
$26.6 M – car sales (from last year’s $30.5 M)
$ 2.8 M – service & parts sales (from last year’s $ 3.6 M) - Margins on car sales are low (5.5% of sales revenue & 25% for service). - Auto World’s financial situation had been deteriorating for the past 18 months and running at a loss for the past 6 months. - Past 12 months’ financials show that gross sales figures are not enough to cover fixed expenses - Margins had been squeezed by promotions and other marketing efforts.
- Because of increasing fuel prices, industry and in-house forecasts for future sales were discouraging. - Trend is shifting towards vehicle service transactions.
30-day Purchasers CSAT Survey Results
- Auto world achieved better than average ratings
- 90% of customers said that Auto world informed them of what to do if they needed service - Less than 33% of respondents said that they have been introduced to someone in the service department (which is a sales protocol)
90-day Purchasers CSAT Survey Results
- Overall satisfaction with Auto World Service Department was consistently low placing it in the bottom 25% of all Ford dealers - More than 50% of respondents said they would rather use another Ford dealer for future service - Major Concerns:
Promptness of writing up orders
Convenience of service hours
Appearance of the service department
Interpersonal variables such as attitude of personnel, politeness, understanding of customer problems and explanation of work performed
1. What advice would you give to Carol Sullivan-Diaz re:
Carol must take over in running the business and implement some changes to improve the company’s financial position. Carol’s MBA and marketing experience in health service industry has prepared her with technical method and approach in problem resolving which was missing in previous organization of Auto-World. In addition, Carol has long introduction to the company’s operations that makes her to be in the best situation to identify problem areas and come up with resolutions.
To improve the company’s position, we recommend the following action plans: - Reenter business processes with the determination identifying & eradicating trashes and implementing nonstop improvements. Start on the service writing procedure, computerize the service writing and billing to reduction turn-around time and evade long waiting time of clienteles. To circumvent revise, it may be superior that customers first speak to mechanics and mechanics will forward his diagnosis to service writers who will provide the quotations. Mechanics should also be able to illuminate to customers the analysis, particularly if there are numerous conceivable difficulties. This is to manage the potentials of the customer that it may take numerous tries to identify the precise problem. - Advance the service discharge of the service department. This should be at equivalence with the front-end business. For a start, they could deliver a waiting lounge with chairs. If possible a TV and some magazines so that customers may still be entertained while they are waiting. Doing this will increase customer impersonations on doing business with Auto World and lift optimism of the employees. Sales people will also be proud to mention the company’s service department with its innovative look. - Introduction soft-skills exercise for the service department employees with the impartial of...