SHANGHAI -- China's car shoppers now want more than a new car from dealerships. Beijing Tianda Auto Sales and Services Co. learned that old lesson this year.

 

Even though nationwide sales have been flat for the past six months, the small dealership in the capital has profited handsomely from making dramatic improvements in customer satisfaction.

 

Last spring, Tianda was among 200 FAW-Volkswagen Automotive Co. dealerships to be trained by J.D. Power and Associates as part of a project conducted by the carmaker to improve customer service.

 

The company's staff performed so well that in July, Tianda became among the first five car sellers in China to receive a Power Dealer of Excellence Award.

 

For general manager Dan Jiangong, the recognition was just icing on a very plump cake.

 

"Our profits for 2008 have more than tripled when compared with last year. Why? Because recommendations from customers are leading to repeat sales," Dan says.

 

Making customers happy would not have paid a decade ago, when few Chinese were familiar with the experience of buying or owning a car. Since then, however, private ownership has exploded.

 

More importantly, buyers have gotten wiser. They want more from a dealer than simply a new vehicle. They want to be treated well. This is especially true in the big metropolises such as Beijing where Tianda operates.

 

Power consultant Freda Wang points out how quickly attitudes have changed. "Three years ago we started educating car sellers on the importance of customer satisfaction," she says. "Now there's no need because they already know. They just want us to tell them how to achieve it."

 

Tianda is a modest outfit. The dealership sells only the VW brand, employs just 22 staff in its sales areas, and so lacks resources of larger competitors. Its one showroom was located in a back street far from central Beijing. Its visibility is low.

 

The need to gain an edge made Dan and his staff all the more eager converts to the Power approach. Power teaches dealerships to make customer contacts the subject of thorough and rigorous procedures.

 

"We were taught to scrutinize every single step of what we did to ensure a positive outcome," Dan says.

 

One example Dan gives of poor procedures was when a local politician who had bought a Magotan -- the Chinese version of VW's Passat -- at the beginning of last year.

 

Three days after his purchase, this influential customer came back because his car had scratches on it. He was also at a loss over how to use the built-in navigational device.

 

"We weren't ensuring that each car sold was given a full examination before delivery," says Dan. "Also, we weren't providing post-sales customer training from an expert familiar with each of the car's functions. We have now set up processes so these problems cannot occur."

 

The proportion of customers saying they were very happy with the service they received has jumped from 40 percent before Tianda implemented its new processes, to more than 70 percent after, according to Power's reckoning.

 

Dan has no shortage of anecdotes that testify to the improvement.

 

One young professional, for example, was so pleased with his purchase of a Phaeton sedan that he persuaded no fewer than six relatives to come into Tianda and buy the same car. He then praised the dealership's service on his popular Web log.

 

The Power award is nice. But of course dealers live to close sales.

 

In March -- the month before Tianda started its training -- 1,340 people visited its showroom and 129 units were sold. In August, the market went flat and only 978 shoppers came in. But 178 of them bought cars.

 

"We did this without spending one fen on advertising," says Dan. "Before, recommendations used to account for about 10 percent of our purchases. Now that proportion is around a third."