There, I said it.
As many of you do, I lurk around the various automotive forums to keep an eye on what’s going with the rest of the retail world. The one thing that I see repeatedly are disparaging remarks about customers. More specifically, most of the stench emanates from the discussions around pricing. While I read about the exhausting hours, evil vendors, and putting up with terrible management, what I don’t seem to ever read is how these complainers add value for their customers and dealers.
Let’s get something straight: In the 21st century, no automotive salesperson is entitled to gross. Gross is something that is earned. Today’s customer does 98% of the work to sell themselves a vehicle. By merely being available to shuffle paper doesn’t maximize current revenue or guarantee future revenue. Sales personnel need to bring more to the table than just being able to walk between two rooms.
Now that I’ve officially made myself a heretic, let’s walk through the logic.
Pandora’s Box is open. No matter how much the retail auto community wails and gnashes teeth, consumer-facing pricing tools aren’t going away. In fact, thanks to an endless supply of venture capital and private equity, these tools will only continue to get stronger. The race to the bottom has already been won, and car dealers never qualified for the race. At the time of this writing, Warren Buffet’s personal net worth is currently around 40% higher than GM’s total market cap. The disruptors have the capital to make larger disruptions, and are just warming-up on the starting line to do so. Maybe dealerships should have been nicer to the investment community.
To further restate the obvious, consumers have exponentially more information at their finger tips than they did five minutes ago. Gone are the days of printed sheets from a desktop computer. Every single piece of information they need to make a smart decision is sitting in their pocket. Showrooming should be the least of a dealer’s worries. Customers have the ability to make every deal a loser if they truly wanted to.
Less obviously, your friendly neighborhood OEM continues to manipulate the value of vehicles. From squeezing out markup, to over-inflating residual values, to mortgage-length payment plans, OEMs keep chasing SAAR while making decisions that reverberate throughout the primary and secondary markets. The sand that salespeople tell their customers to go pound is the same sand that their careers are built on.
Don’t hate the player. Change the game.
Retail automotive is leaving the “car business” behind. The car dealers of tomorrow will be in the relationship business. As brand loyalty erodes, portfolio dealers proliferate, and regular maintenance intervals decrease, retaining customers is paramount to future cash flow. Every positive review, star, and thumbs-up is a deposit in a future bank account. The most successful dealership staff (from techs to BD agents), will have the warmest smiles, firmest handshakes, boundless knowledge, and tell the best stories. Smartphones stay in pockets because there is no real need to pull them out. The fanatical loyalty starts with them. Total Customer Value is the name of the new game. If your dealership isn’t learning the rules, it’s not going to win.
If you’re working at a dealership, and you’re complaining about a grinder, ask yourself how much is that relationship worth? Is it worth squabbling over $100? Is it worth jeopardizing a repeat sale or losing future service business? I broker a couple car deals a year, FOR FREE, because the relationships mean that much to me. While you’re angrily going back and forth, another salesperson sold four cars because they decided to embrace change. If you want to call yourself a Car Guy or a Car Gal, start being one. Make yourself so valuable that brands, models, vendors, pricing schemes, and future technology become irrelevant. Make it so it’s an honor and a privilege to buy a vehicle from you.
Love thy customer.