Establishing service frameworks for dealers in emerging nations
Honda has, with minimum investment and facilities, been quick to set up plants and start business in emerging markets (such as in Africa and Southwest Asia) dominated by Indian and Chinese manufacturers.
A lack of social infrastructure and education meant that general motorcycle dealers in these markets were unable to provide the level of service that Honda was looking for.
As a latecomer to such markets, Honda works constantly to highlight points of differentiation with competitors, and consequently increase its share of sales, by delivering to customers and subsidiaries the Three Joys (the Joys of Buying, Selling and Creating), as stated in the Fundamental Beliefs.
In particular, we believe it is our mission, using the limited management resources available, to manufacture and sell competitive, high-quality Honda products and to build frameworks for providing satisfaction to the customer through after-sales service.
Specific initiatives include developing a ‘maintenance invoice’ for use in emerging nations where educational levels are low. These have been provided to dealers along with guidance on how to apply them. Invoices come with simple illustrations and diagrams have been included on the invoices to explain, in a format anyone can understand, procedures for visual and operational confirmation of vehicles on delivery after purchase, and procedures taken when the customer brings in a vehicle for maintenance or repair.
Easier to grasp and serving as an aid for ensuring sound after-sales service delivery, the result is satisfaction for both customer and dealer personnel. Furthermore, the exchange of maintenance invoices, containing details of customer complaints and repair work and other valuable information, puts in place a process at overseas subsidiaries for properly gathering data on market quality for feedback to manufacturing and product development divisions even in circumstances where it is not possible to invest sufficiently in information infrastructure.
The invoices were introduced to two markets, Kenya and Bangladesh, in FY2014 and similar initiatives will be pursued in other emerging nations as we continue efforts to bring the Three Joys to customers.
Japan: Ensuring motorists can drive Honda vehicles safely
Highly skilled service personnel with extensive knowledge of Honda vehicles provide high-quality after-sales service at Honda Cars and Honda Auto Terrace, Honda’s automobile dealerships: they make use of proprietary tools developed by Honda, electronic diagnostic devices, and other systems along with extensive vehicle quality information gathered from dealerships across Japan.
As of March 2014, about 1.8 million customers had taken advantage of bundled services including regular inspections and oil changes, and more than half of all new vehicle purchases included Honda’s extended warranty, helping the company achieve a high level of customer satisfaction.
Dealers work hard to ensure that customers can enjoy their Honda vehicles with confidence and peace of mind under the best possible conditions by offering a wide range of services to provide a pleasant ownership experience, including by enhancing Honda's menu of car maintenance services, a reasonably priced selection of ways to refresh vehicles inside and out.
Japan: Customer support via the Honda C-card
Honda offers the Honda C-card to provide an optimal level of service to customers at all times. As of March 2014, the card, which combines a point-based cash rewards program, preferred service for members, a charitable donation program, and other benefits with basic credit card functionality, had been issued to a total of some 2.89 million members since the start of service in October 1995. Additional "Honda C-card Members" services were added in October 2006, including the ability to reference a vehicle's maintenance history and the ability for cardholders to notify Honda of their address changes 24 hours a day. We've also added a Honda C-card without credit card functionality as an additional choice for customers.
Donating funds based on Honda C-card usage
Each year since its introduction in 1995, Honda has donated a fixed percentage of customers' Honda C-card usage to the Japanese Red Cross Society and the Japan Committee for UNICEF. In 2014, these donations totaled ¥822 million.
Increasing service staff members' technical skills
A unique service education system
Honda offers a range of training for dealer service staff through the Honda Automotive Service Education System.
The program is based on Honda Automotive Service Training System (HAST), which incorporates not only technical but also customer service content in order to foster the simultaneous development of both technical and customer service skills. The program, which includes training in specialized subjects as well as training for full-time workers, meets the needs of a broad range of field staff.
Honda also offers the Body Paint (BP) Training Program for body repair and painting staff in order to foster the development of specialists in those areas.
Recently, we have been working to enhance the technical skills of service staff by increasing the percentage of these workers who hold Service Engineer certifications*1 and expanding a trainer program*2 designed to bring HAST training to the prefectural and corporate levels.
*1 Trainer program: A program that builds on HAST training in order to offer trainer education to exceptional staff at the prefectural and corporate levels.
*2 Service engineer certification: A series of service engineer certifications (grades 1 through 3) reflecting level of training have been established under the HAST Program and the BP Training Program.
Giving service personnel a chance to hone their skills at the Honda Automobile Service Skill Competition
Honda holds the Honda Automobile Service Skill Competition to provide an opportunity for service personnel from across Japan to put their service skills, knowledge, and hospitality to the test at a venue designed to stimulate participants to hone their skills while fostering the development of the next generation of service professionals.
The competition consists of three events: the Service Engineer Course, where individuals compete to gauge the precision with which they can diagnose malfunctions and replace parts; the Corporate Team Course, where teams of three compete in a simulated customer service from reception to delivery as well as malfunction diagnosis; and the Reception Staff Course, where participants compete in a role-playing format that tests their ability to serve customers as reception staff. A maintenance contest where participants compete to see who can disassemble, measure, and assemble functional parts with the greatest speed and precision is held at the same time. Through the Service Skill Competition, Honda is striving to train its service personnel to a higher level.
Through their participation in an event that allows them to exhibit the skills they have developed through their daily work, service personnel both increase their awareness of the importance of building skills and help improve service quality at Honda.
Overseas: Products that bind customers to Honda
Honda strives to deliver an optimal level of service to customers worldwide based on its philosophy of creating and expanding customer joy worldwide through service. The company shares advanced service activities and approaches from different countries with personnel worldwide through Customer Service Operations in Japan as it works to expand its program of initiatives in ways designed to complement each country’s market characteristics.
To provide a pleasant ownership experience for customers, Honda dealers offer a range of regular inspection packages with various payment and service options as well as extended warranties designed to ensure customers are able to enjoy their products over the long term. These products continue to evolve on a daily basis in each market in response to customer needs, which are diversifying worldwide. As of January 2014, they were being offered by dealers in more than 30 countries.
Going forward, we will strive to expand customer joy to include all countries as we create strong bonds linking customers and Honda in markets worldwide by bringing these activities to emerging markets.
Power product initiatives
Enhancing the way we provide service information to customers and dealerships: Consumer products edition
In emerging nations, where demand is growing rapidly, products are carried by businesses other than Honda dealers, making it necessary to provide appropriate service information to general retailers. Even as we've been building a service network linking Honda stores, we've also enabled the direct distribution of the minimum amount of service information needed by general retailers and customers via the Internet. Specifically, we improved our engine information website to add consumer products information.
We also asked for local feedback about the types and categories of service information that should be provided, and we selected, compiled, and otherwise prepared information based on that input. As a result, we began offering service information for generators and outboard engines in addition to engine information in fall 2010.
As of March 2014, this information was available in 43 countries, and it was being accessed about 13,000 times each month. (From access logs, we found that while the information was made available in 43 countries, it was actually accessed by users in a total of 139 countries.)
Additionally, the website incorporates a mechanism for soliciting market feedback about needs related to information dissemination, site content, and product serviceability. These questionnaires make it easy for customers to submit requests and opinions to Honda.
Expanding an initiative to reduce complaints
Thanks to an initiative to address complains by soliciting customer feedback that was launched in Japan in June 2006 and subsequently implemented in Europe and the United States, the complaint rate (obtained by dividing the number of complaints per month by the number of power products sold over the last year) has been falling.
About eight years of experience with this initiative has taught us that customer complaints and requests concerning our products exhibit great variety as a result of regional differences in culture, climate, and lifestyle, revealing significant differences in how products are used. Recognizing the breadth of those differences, we began developing similar systems in China and Thailand in April 2012 and in India in October so that we could better gather customer feedback in those countries as well.
Specifically, a regular meeting to reduce customer complaints is held in each country on a monthly basis. In addition to facilitating the sharing among relevant departments of information about every piece of customer feedback received by customer service hotlines concerning our business operations, including products as well as sales and service activities, and the examination of improvement measures, these meetings provide a venue for reviewing the progress and results of those measures and ensuring that they are incorporated into a growing feedback database. We also work to eliminate customers' complaints at the source by investigating the root causes of complaints, identifying issues that need to be resolved, and implementing measures as the departmental level to do so.
Customer complaints that go beyond the regional level and have the potential to impact the power products business as a whole are identified and shared along with information about effective countermeasures among facilities worldwide.
Including a quick reference guide in product packaging
In order for customers to be able to use the products they purchase in their original condition as long as possible, it is critical that they operate them properly and inspect them regularly. Honda Siel Power Products in India packages a quick reference guide with generators sold in emerging nations. Designed so that they will be available for use whenever they are needed.
These guides incorporate following characterics:
1. Operating instructions on the front and a description of how to perform a regular inspection on the back, 2. Illustration-based explanations, 3. All on a color-printed A4-size sheet (designed so that it can be reproduced clearly as a black-and-white copy), and 4. Uses paper that will not tear even if it gets wet.