Branding Strategy Insider

BrandingWire: Auto Dealers

For regular readers of Branding Strategy Insider, you know that every month BrandingWire members come together to tackle real-world business problems. This month we are reaching out to auto dealers.

We have touched on this subject before here, here, and here. We’re taking a different approach this time. I’ve asked Bill, a friend who consults as a manufacturer-dealer liaison to join me in a candid conversation of the top problems facing auto dealers today. My thoughts follow the problems Bill describes.

Problem Number 1.  Traditional Mentality – Get the iron over the curb, leverage the buyer into a car today.

Bill, this is definitely at the heart of the issue. More than one hundred years in the making, the auto dealer culture has created one of the most vicious sales processes in business, resulting in a low reputation and or perception that impacts even the best of dealers. How can this cycle be broken?

Begin with the obvious - flush out traditional mentality. It’s obsolete. Remember what Charles Darwin said, "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."

What has changed? The consumer. They won’t be pushed. They are armed with more product knowledge than the sales force. They are numb to high-decibel advertising and keen on fine print.

Now dealers have to adopt new thinking or change personnel with those that possess new thinking. Which leads us to the second problem Bill points out…

Problem Number 2. Professionalism - the industry does not attract competent people.

Of Auto Dealers and Icebergs

There’re Not Enough Life Boats! Few phrases are as closely linked to tragedy as this one.  For the remaining 1500 men, women and children left on the Titanic with nowhere to go but the frigid waters of the North Atlantic on that historic night in 1912, the grim realization of their fate must have been devastating.   

As I build towards a marketing point I see parallels in this tragic event to what is happening in the auto dealer industry. With deep conviction I feel as though I am recording it as it happens. I see the water rising above dealers’ ankles and I wonder why more of them are not reacting to the danger.

There is no doubt today’s auto dealer is experiencing the business equivalent of Titanic’s grave situation.  A jagged berg of competitive pressure and a new, sophisticated customer with much higher expectations have pierced the industry at its weakest links. It is life or death. The parallels between Titanic and the Auto Dealer Industry are chilling; both rely on moving metal for survival.

•Both segregate their customer. Titanic: 1st, 2nd and 3rd class. Auto Dealers: Men and Women. There is a clear distinction in how each are treated.

•Both recklessly race to their destination. Titanic: New York. Auto Dealers: The Sale.

•Both consider themselves ‘Unsinkable’. Titanic by Superior Technology. Auto Dealers by Superior Sales Process. The very strength of which they boast proves to be their weakest link.

•Both dismiss warnings. Titanic: Icebergs. Auto Dealers: Customer Dissatisfaction with the sales or service process.

•Both take dangerous risks. Titanic: Sail Faster. Auto Dealers: Sell more, faster. One risked lives. One risks relationships.  Relationships are the lifeblood of existing and repeat business.

•Both struggle to change course. Titanic: ‘Iceberg Dead Ahead’ Auto Dealers: ‘Follow Whatever is Ahead’. Today’s dealers are drowning in a sea of sameness. They cannot resist the influence of their crowd; even as it pulls them deeper.

•Both waste critical opportunities. Titanic: Fill the Life Boats. On Titanic many were launched half-empty. Auto Dealers: Build Customer loyalty. Many Auto Dealers launch half-empty relationships.

•Both experience dramatic collisions. Titanic: The Iceberg. Auto Dealers: Customer Needs, Desires and Expectations.

There is no denying, the auto dealer industry has squarely hit its iceberg. It can be argued it repeats the collision with every negative customer experience.

Attention Auto Dealers: Change the Voice in Your Head

10 things an auto dealer can do to change world opinion and increase sales.

If you are close to the auto-dealer space in any way, you are most likely hearing complaints from dealers and staff that sales are down. For dealers who dare to have vision and heart, sales can increase higher than imagined. Here are 10 ideas.

Change the Voice in Your Head

The one that says, "I'm an auto dealer; I need to look and act like an auto dealer." If you are a "follower," you have inherited the reputation that follows dealers. Shake this liability by distancing yourself through relevant differentiation. That is, build an experience that is different and meaningful to your customers. Your new voice should say: "I build lasting relationships by helping people purchase automobiles in a unique and compelling way."

Stop the Noise

The world is ready for you to stop the shouting in radio and television spots. This approach does not generate excitement or motivation unless it is coming from a drill sergeant. Furthermore, it comes off as desperation and reinforces the notion that you are like every other dealer. The noise intensifies when you don't communicate clearly.

The blur of fine print, jabs of pressure and fast talking keep consumers in a daze and on the defensive. Be sure to deliver clarity. When crafting your messaging, don't depend on reasoning to entice buyers. Emotional connections trigger sales. Most of all, remember, people buy from people. When you speak to your customer like a friend, the noise becomes a signal.

Become Human

Brands are personifications of organizations, products, services and experiences. Consumers do not develop relationships with products, nor are they loyal to products.

Brands and what they stand for establish the emotional connection with consumers. Your dealership has a brand. Different from the manufacturer's, it is the sum of all experiences a consumer has with your organization. It has been or is being created in the minds of everyone it comes in contact with. If you are not creating it, someone else is creating it for you.

What does your brand stand for? What emotions does your brand evoke? It should exhibit admirable human qualities. To most people, a "dealer is a dealer." Shift the focus from selling cars to building long-term relationships with car buyers.

Remove the Barbed Wire

It is time to defuse your sales approach. It alienates your customers and puts them on the defensive.

Take your women buyers for example. They influence 85 percent of purchase decisions, yet they are treated as second-class. (How is this happening?) A survey from Power Information Network, a division of J.D. Power and Associates, found that of about 800 female buyers in the U.S. market, roughly 40 percent believe their gender hurt the way they were treated in their most recent visit to an auto dealer. (Learn more about your female buyers at Ask Patty.)

To counter this treatment, most women rely on a male counterpart to aid them in the buying process. With some respect from you, this audience would be very loyal, refer others and most likely pay more (willingly) for your product.

Live and Thrive Without Graveyard Pricing

The strongest relationships are not built on price. There are other ways to entice your target audiences. A reputation of a caring car dealer will compel many. When you humanize your offerings, funny things happen; your customers drive an extra three blocks to drink a more expensive cup of your coffee. Create something special, and let your competitors command the lowest price.