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Credit desk: An auto lender's secret weapon for dealer satisfaction

September 8, 2017
Great relationships trump low interest rates and product mix when it comes to automobile dealer satisfaction with lending institutions, a new J.D. Power study found.
According to the 2017 U.S. Dealer Financing Satisfaction Study, released in August, the interactions between dealers and frontline personnel working in the lender’s credit department are at the epicenter of that relationship.
"Across all segments of auto lenders — non-captive, captive mass market and captive luxury — the dealer’s relationship with the credit desk is a key driver of overall satisfaction and the lynchpin to a sustained, fruitful relationship," said Jim Houston, of J.D. Power. 
"Because the credit staff is often the first point of contact—not just for credit decisions, but also for problem resolution—the role has to evolve, with credit analysts becoming much broader subject matter experts and frontline sales personnel taking on more focused roles."
Following are some of the key findings of the study:
Credit desk becomes "tip of the sword" in building dealer satisfaction. For non-captive, captive luxury and captive mass market lenders, the credit desk represents more than half of the survey weight for overall satisfaction, compared with the impact of sales representatives. 
Overall, the dealer/lender relationship outweighs application and approval process, lender offerings and lease return as the single most important variable associated with high levels of dealer satisfaction.
Sales reps move away from problem solving toward selling value. Dealers overwhelmingly indicate that the credit desk is their first point of contact when looking to resolve problems, far outpacing sales representatives, sales support staff and regional managers. 
As such, dealer satisfaction with sales reps is highest when reps focus on portfolio performance review, dealership performance consulting and customer retention vs. problem resolution and training.
Finding the Goldilocks scenario for dealer communications. The optimal dealer communications mix for lenders involves a predictable cadence of monthly visits paired with weekly calls and emails. 
When touch points outside of these preferred parameters are used, overall satisfaction with sales reps falls by as much as 30 index points (on a 1,000-point scale).
"What this study really tells us is that many lenders should be taking a good long look at the way they are currently staffed and think about transitioning some of their most seasoned industry experts into problem-solving roles in the credit department," Houston said.
"Correspondingly, they also need to think about how they’re currently selling and re-evaluate whether it makes sense to have their best problem solvers on the road making sales calls." 
The annual study, which was significantly redesigned for 2017, measures auto dealer satisfaction in four segments of lenders: non-captive, captive mass market, captive luxury market and floor planning. 
The non-captive analysis evaluates the dealer/lender relationship across three factors: relationship, provider offerings and application/approval process.
In the captive mass market and luxury segments, four factors are evaluated: relationship, provider offerings, application/approval process and lease return.
Three factors are measured in the floor planning segment: relationship, portfolio management and provider credit line.
The 2017 U.S. Dealer Financing Satisfaction Study captured more than 11,622 finance provider evaluations across the four segments. The evaluations were provided by 4,245 new-vehicle dealerships in the United States.