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On the Point

It’s the Relationship, Stupid

New data on what consumers want has Da Man up in arms. Not only does he doubt the source of the data, he believes it’s another example of why dealers need to take back their markets.

July 14, 2014

“It’s the economy, stupid” was the powerful phrase that rallied voters during Bill Clinton’s successful 1992 presidential campaign. That single phrase focused the nation on one issue and made all others insignificant in comparison. It was a brilliant strategy created by the king of populist political sarcasm, James Carville. And it helped unseat George H.W. Bush from the presidency.

We’ll, I think it’s time we came up with our own tagline and take back our business. Recently, we’ve been bombarded with disinformation and outright lies disguised as new consumer data and research. It’s hard to know what’s real and what’s propaganda. As I’ve said before, figures lie and liars figure.

One of the supposed trends we keep hearing about is how consumers hate to visit dealerships. Of course, the research companies telling us this were hired by the same people who financially benefit from customers not visiting dealerships. I’m talking about companies like Edmunds.com and Carfax, which use negative dealer stereotypes to promote their services. And they do this while taking your money.

Folks, stop paying these companies to slander your reputation. Throw some cold water in your face and look around. Do your customers seem distressed? Do they seem like they’re at war with you?

We’re not perfect, but no industry is. The truth is most dealerships are historically and emotionally tied to their communities. So the last thing they want is an unhappy customer.

One stat I do agree with is that consumers are visiting fewer dealerships, about 1.5 stores, according to one of these pseudo researchers. But with the Internet, isn’t that an obvious conclusion?  

But dig a little deeper into that stat and you’ll find the hidden message, which is the public hates haggling. Sometimes the way a deal plays out is beyond our control. Tell me if this sounds familiar:

“Mr. and Mrs. Customer, I’m sorry you’re upside down on your trade-in. I know it’s frustrating that you owe more on your trade-in than it’s worth, and I know you blame the dealer. The truth is, you’re upside down because of the manufacturer’s ‘No Money Down’ promotion, which means you couldn’t build equity. Your lack of a down payment or maybe even the OEM’s recall lowered the value of your trade.

“Secondly, I know you’re upset we didn’t knock $5,000 off the sticker price. After all, the lead provider told you they could get you $8,000 off the price, even though the manufacturer only allows a profit margin of $1,200.

“Third, I’m sorry you have a credit problem and that the captive finance company charged you a higher rate. But once again, I didn’t do it.
“Mr. and Mrs. Customer, we understand that you believe we have another $10,000 in secret money and that we keep the vehicle’s real invoice stashed away in a back-office safe. Once again, some of the lead providers have led you to believe we’re cheating you. So of course you’re distrustful of our store.

“So, Mr. and Mrs. Customer, regardless of how much you hate haggling, you’re going to go for it anyway. And when we can’t possibly do that ridiculous deal some vendor led you to believe was possible, it will confirm what the little fox on TV told you about dealers.”

Folks, it’s time to take back control. We’re not crooks or con artists, and we need to stop believing what this alleged research says. We’re good people, and we’re a hell of a lot more honorable than most.

I have long been an advocate of customer relationship management (CRM). It’s the salvation of the retail dealership and represents the key to our future. And I am not talking about some vendor’s software solution.

Look, a computer program is not CRM. It is the relationship you have with the consumer, not the sterile automated environment tech vendors keep pushing on us. Hey, they’d love nothing more than to take the business away and turn your dealership into a warehouse. So generate your own business and stop putting these vendors between you and your customers.

Bottom line, you need to recapture your local market area in the search engines, and you need to stop paying these vendors to sell your customers on these unreasonable discounts that they dictate. You also need to build a consumer culture in your dealership, and establish a community presence that no amount of malicious interference can take away from you.  

Jim Ziegler is the president of Ziegler SuperSystems Inc. E-mail him at jim.ziegler@bobit.com.

Comments

  1. 1. Pamela Braswell [ July 25, 2014 @ 06:31AM ]

    I have been in the auto retailing business for over 27 years in several capacities but primarily in the sales end. Although many things have changed, i.e. dealer profit margins from the factory, one thing in my book stays consistent. Customers just want to feel they have made a fair deal. It isn't all about price people, it has a lot to do with perceived value and how the client is treated from the moment they walk in your door to the moment they leave. The dealership I work for has a high level of integrity while at the same time being able to maintain profit. Take a serious look at how you view your customer, and at how you treat them. If you aren't listening, being empathetic and providing seriously good service, in todays market you wont do well. Just saying.

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Author Bio

Jim Ziegler

President & CEO of Ziegler SuperSystems

Jim 'Da Man' Ziegler joined the magazine in 2011 to deliver his On-the-Point message about the car business to dealer principals and store managers. He'll offer strategy advice on everything from sales and F&I to marketing in the digital age. Catch him every month at www.fi-magazine.com.

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