by organizational development consultant David Zatz, Ph.D., in late 1999
For years, Chrysler ran a program which assigned stars to dealers based on the results of customer surveys. This program had many problems, not the least of which being that the dealers only got numbers, not advice on how to improve their results.
In 1997, Chrysler began its new and revised Five Star program. A full description of it is in this Quality Digest cover story, but the essence of the program, when it was first implemented (before Daimler), is that dealers had to:
In theory, this program should have been extremely powerful. In reality, it is hard to judge its effects.
Five Star dealers got higher customer ratings than other dealers, but that's hardly surprising, since the best dealers would be most likely to try for the program; and since one requirement of the program is high customer ratings. If you draw from the highest rated dealers, you will get a group of highly rated dealers.
From the people we have spoken with, there was both good and bad in the system. The good part was that dealers were give tools to work with, in terms of training, employee survey information, and customer feedback. These tools were invaluable for dealers who really do want to do a better job.
On the darker side, those who don't care about the program stood a decent chance of getting certified anyway, depending on their zone reps. Though Chrysler reps said that dealerships were continuously recertified by rotating zone office personnel, other industry observers have expressed concerns that no outside agency is involved. Ford, for example, used J.D. Power to certify dealers for their Blue Oval program (though Ford's program was crippled by having standards so low most dealers qualified when it was started.)
Employees were under a lot of pressure to get survey ratings up. Many of the issues which annoy customers, though, are not under their control. In addition, mechanics are still under a great deal of pressure to push jobs through quickly, and not waste time talking to each other, sharing lessons learned, and generally increasing their effectiveness. Indeed, the desire to get customers' cars back on time may exacerbate existing "fix-it-fast" problems, though the program's emphasis seems to be on "fix it right the first time."
The best systems have problems, and even with outside certification, dealers could "game the system" and pretend to be doing everything they are supposed to do. It's hard to get around that.
In any case, if customers have their cars actually fixed correctly the first time they go to a dealer, and feel that they are treated well, it will do wonders for Chrysler's reputation for quality.
Chrysler replaced the Five Star dealership quality program implemented in the 1997 with a new program called Dealer Standards. Unlike Five Star, the new program rewards dealers with cash, and uses both mystery shoppers and increasing goals. The Dealer Standards system is operated by a company owned by the Swiss SGS Group, which handles similar duties for Fiat. SGS also counts BMW, Toyota, and Volkswagen as customers. (Sergio Marchionne sits on their board, in what some may call a conflict of interest.)
While dealerships are graded on a variety of categories, including customer relations and facilities, sales volume is a major factor. The criteria vary considerably from month to month.
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