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BrandingWire: Auto Dealers

August 6th, 2007 · 25 Comments · Branding, Collaborations

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This month's BrandingWire challenge was local auto dealers.  I'm anxious to read what my colleagues have to say on this one.  As you'll read, I think the situation is beyond what marketing alone can heal.

I'm usually the first guy who will champion a concentrated, consistent effort to re-brand or re-market a company that has gone astray.  But I have to tell you, I don't think auto dealerships stand a chance. 

Why not?

Way too many years of high-pressure sales, the goofy "I have to go talk to my manager" game, selling vaporware in the form of extended warranties and in general sleazy tactics and employees.

Bottom line – we don't trust you.  Any time someone walks into a car dealership, they expect to be tricked and taken.

Here's a marketing/branding truth.  Without trust, you've got nothing. 

No marketing program or branding campaign can save you or change the fact that on just about any survey given, cars sales people rank as the least trustworthy profession.

There are just some things marketing can't solve.  This is an operations issue.  Saturn had the right idea.  They changed the way cars were sold.

The internet has stripped you of much of your mystique and ability to con buyers.  But instead of recognizing that it's a new day, you've just clung even tighter to the tactics that still work.  It's time to actually change.

People need cars.  They have to buy them somewhere.  So be the first one in your community to truly change the way you do business.   I'm not talking about a superficial change.  Or a bait and switch sort of change.  Because that's what we expect.  So surprise us.  This isn't spin; this is revolutionizing your industry.

  • Be transparent with your costs.  Show us the invoice because anything less and we won't believe you.
  • Set a standard mark-up for every vehicle on your lot.  We don't deny you need to make money.  We just want it to be fully disclosed and fair.
  • Stop compensating your sales force with commission.  Pay them a flat fee for every car sale.  As long as they are paid more to trick us into paying more – we can't win.
  • No dickering, dealing or game playing.  Set a price and live with it.
  • Use an independent source for trade-in values. Nothing you can do here is going to make us feel like we got a fair deal.  So pay some of the area's auto repair shops that have a strong local reputation a flat fee for assessing trade in values.
  • Let us take any used car off the lot and have it evaluated by an independent expert.  If we choose to buy the car, reimburse us for the evaluation.

Right now, every facet of your business is set up to make the buying experience an adversarial one.  Until that changes, nothing else really can.

Be the first to re-invent how your industry gets compensated and then celebrate that.  Go out of your way to make sure the consumer gets the best deal possible and then celebrate that.  Turn your sales force into customer advocates and then celebrate that.

Own the brand position of being different from every other car dealership out there and you will have more customers than you can handle.  Otherwise…just run another Summer Sizzlin' Sales campaign and it's business as usual.

Until your competition decides that they're the ones who are going to actually change.

Check out what the rest of the BrandingWire posse had to say and get more high-voltage ideas at BrandingWire.com.

    Olivier Blanchard
    Becky Carroll
    Derrick Daye
    Kevin Dugan
    Lewis Green
    Ann Handley
    Gavin Heaton
    Martin Jelsema
    Valeria Maltoni
    Drew McLellan
    Patrick Schaber
    Steve Woodruff


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25 Comments so far ↓

  • Steve Woodruff

    Drew,

    Clearly, we share the same perspective that the current model needs to be blown up, and this industry should just start over! Good thoughts above…

  • Lewis Green

    Drew,

    You said it all for any business with: “Without trust, you’ve got nothing.” It’s pretty simple: Stop screaming at us and stop talking about yourself, and then maybe we can have a conversation.

  • Patrick Schaber

    Drew,
    We share the belief that the auto dealer is beyond repair. I wonder if any of them will step out and be the first to change the model.

  • Jill Emmert

    You are so right. I work in an industry that is there to help these guys, and I don’t trust 99% of them.

    The good news is that there is a lot going on in the industry locally and nationally that is going to weed out many of the game-players. Sales are down across the nation and many dealerships are closing or down-sizing. The state is now requiring anyone with a used car dealer’s license to take annual classes so they can keep up with the laws governing their business.

    So how do you find the 1% of dealers that can be trusted?

    Word of mouth is a very powerful thing, especially in the car business. Give your customers a good experience and they will send their family and friends. Many of the dealers I trust (and consider good salespeople) live by this philosophy: Underpromise, overdeliver. It’s the only thing that is going to save them in the coming years.

  • Chuck

    Used car sales, one of the last survivors of the Caveat Emptor era.

  • Stephen

    AAaarrrrrgh!! I got into the car biz about a year ago, because I needed a break from what I had been doing. After being a “suit”, I am appalled at how this business works. My manager and I were discussing this just yesterday! One VC and one regional dealership could toss out the traditional model and revolutionize the industry.

    Change the top leadership, stop trying to manage through people who sold a lot of cars years ago, recruit people who know how to run a business.

  • Kevin Dugan

    Drew – It seems such a simple approach, why aren’t any dealers taking it?! Are we missing something? Your ideas would clearly set someone apart.

    I’m also surprised no one un-earthed a consumer-generated campaign against this industry. Maybe we should send Jeff Jarvis to a dealership so he could write the post that activates the rest of the blogosphere as he did with Dell? :-)

  • Katie Konrath

    I remember a couple years ago in Minneapolis that one company announced that they would have transparent pricing and would actually list sticker prices on their vehicles. It sounded like such a mundane thing, but everyone was talking about it. The very idea of being treated fairly by an auto dealer was completely newsworthy.

    Also, as a women, I’m very hesitant to go look at cars at an auto dealer. Everything I’ve ever heard says that dealers do everything they can to take advantage of women, and I believe it. Just the thing to make me want to buy a car!

  • Janet Green

    Speaking as someone who’s been married to a used-car dealer for fifteen years:

    A). Not all of them are crooks. Please see my ‘comment’ over on the Branding Wire website.

    B). I do think Drew’s right in that the entire auto industry suffers from problems that marketing alone can’t solve. But at the industry level it’s not the individual dealers who can change things such as the sales structure, sales methods, and the pricing models. And at the used-car/local level, there are very good reasons why some of these suggestions aren’t reasonable from a business standpoint. (I had another 500 words written up on that but I decided Drew probably didn’t need that on his blog!)

    HERE is the secret to winning at the car dealership:

    Understand that YOU HAVE THE POWER. YOU control whether you buy the car. So do a little research, know what you want and what you’re willing to pay, and be prepared to walk away. If more customers would exercise their power, they’d feel a whole lot better about the experience.

    I realize that doesn’t solve the branding woes of the auto industry, but taking control of the process is one way customers can begin to affect the kinds of changes they’d like to see.

  • Drew McLellan

    Steve — just starting over would take huge change from the top down. I wonder if the industry is capable of it?

    Lewis — Yup. The more I thought about our challenge this month, the more I realized they cannot talk themselves out of a problem they behaved their way into.

    Pat — what I wonder is why hasn’t someone already done that? What’s in their way? Surely some car dealers are smart enough to realize the mess they’ve made.

    Drew

  • Drew McLellan

    Jill,

    But as you said — you are in the industry so you’ve been able to cherry pick a few sales people within dealerships.

    But what about the rest of us? Why isn’t an entire dealership stepping up to this problem and tanking a new brand position that says in essence, “we’re the anti-dealer?”

    Drew

  • Cam Beck

    Most of your comments are right on. I have only one MINOR issue with this point:

    “Stop compensating your sales force with commission. Pay them a flat fee for every car sale. As long as they are paid more to trick us into paying more – we can’t win.”

    … because if your other point, “No dickering, dealing or game playing. Set a price and live with it,” is adopted, then commissions are irrelevant except that they help the dealership recognize and reward their star performers.

    That’s all assuming the quality of the product is good and the price is fair, but the other points you make also address that.

    Great post.

  • Mark True

    Drew;

    My dream client is a local car dealer willing to try something completely different. Wouldn’t it be a blast to be part of that!

    A little success might get the ball rolling.

    -Mark

  • Drew McLellan

    Chuck — you know, you are very right. Consumers have been able to topple that mentality in most industries. I wonder why we haven’t been as successful with the dealerships?

    Stephen — What do you think it will take to effect change?

    Kevin — that’s the thing I don’t get. Surely the car dealers see the logic in changing their model. Why haven’t they jumped on the chance?

    Drew

  • Drew McLellan

    Janet,

    I don’t think anyone is suggesting that all car dealers are crooks. I think what you’re hearing loud and clear is that because of the way they do business — car dealers invite the mistrust.

    And in fairness…many of them have taken advantage of consumers for many years.

    You suggest that consumers have the power, but I have to respectfully disagree. Most consumers don’t know enough about cars to know when they are being treated fairly or not. Their ignorance leaves them very vulnerable.

    Sooner or later, someone is going to have the courage to do business differently. Whether it has to come from the top levels or not, I don’t know.

    But I do know that until there is a deep level of change, honest car dealers are not going to get the respect they deserve.

    Drew

  • Drew McLellan

    Cam,

    Good point. If the prices were fixed and there was no dickering…then the commission would be less of an issue.

    Of course, that’s only true on the car itself. Once we get into extended warranties and all the other goofy stuff they sell — again the salesperson is driven by his/her own compensation rather than what is best for the customer.

    Drew

  • Drew McLellan

    Mark,

    I have tried to sell this very concept to some of the car dealerships in our area. They all nod their head, smile politely and then go back to business as usual.

    Drew

  • Mark Riffey

    Drew,

    RE: all the other “goofy stuff”, I disagree.

    All it takes is a salesperson who recognizes that they arent selling ONE car.

    By taking care of a customer properly, selling them what they really need, steering them away from what they dont need – after listening to their needs (what??), the salesperson has the ability to create a relationship with that person potentially for life.

    Regular contact, asking for referrals, all the mundane stuff that everyone talks about but few actually do – is what works. The family who buys a car today and enjoys the experience is going to go into shock, but when they recover, they cant help but tell a friend.

    It isnt hard to imagine a car salesperson going viral, simply because they treat every prospect/client like a family member.

    I know, shocking:)

    Mark

  • kelly naman

    I sell cars at Triple H Auto Sales in Theodore Al… Our mission statement is “Join The Triple H Family, where the best vehicles with the best financing equals the best customer care availabe!” We nourish our members’ credit and obtain the best possible terms, interest, and payment possible. I have only worked at this one dealership and am quite unfamiliar with any other practice. The negative branding of the undustry is an unfair stereotype based on past generations. I’d like to invite you to Triple H Auto Sales for Mrs. Hinton’s homemade dressing and Mr George’s jambalyah [My DAD]… where Family and Finance go hand in hand.

    Kelly Naman

  • Drew McLellan

    Hi Kelly,

    It sounds like your dealership is indeed the opposite of many of the car dealership stereotypes.

    I’ll bet you have some amazing customer loyalty and testimonials. It sounds like you have been doing this for quite a while, so I am also guessing that you have a significant portion of the marketshare.

    Good for you guys! Hats off for doing it your own way and in a way that benefits everyone. I’ll bet some of the big car dealerships could learn a lesson or two from your team.

    If I am ever in your neck of the woods, I will stop by to check out that jambalyah!

    Drew

  • Car Dealer Finder

    Local Auto delares have mroe problem whe they come to point of branding because they focus such a smal market that they have to put in everything from the word go

  • Drew McLellan

    Hey there Car Dealer Finder — Is that your real name?:)

    I agree, car dealers, especially local ones have a challenge. But by shoving everything into each marketing effort — they come off desperate or like they are trying too hard.

    Neither are what they’re going for.

    Drew

  • Assignment

    But by shoving everything into each marketing effort — they come off desperate or like they are trying too hard.

  • Dissertations

    they come to point of branding because they focus such a smal market that they have to put in everything from the word go

  • Theses

    Mrs. Hinton’s homemade dressing and Mr George’s jambalyah [My DAD]… where Family and Finance go hand in hand.

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