Sunday, July 19, 2009

We should be OUTRAGED for customer defection

As an industry, as a collective group of car dealers, we all should be outraged to see our customers fleeing to the independent shops. Let’s face it; the new car customer is our customer to keep. Each and every day we send another customer, two, three or three thousand fleeing from our dealerships to the independent shop. Why is it that our customers a running in droves from our dealerships?

I will tell you the answer!

It is simply trust!

Our customers do not trust us - the new car dealership.

It is time we start earning that trust back. It is time to shake things up out there and start winning those customers back. It is time we go out on a limb and change the way we do business.

Many of you know that I wrote a book called “Cheating the Dealer”. My peers have raised their eyebrows at my title; they have called my names and suggested that I betrayed the brotherhood. My book is a positive look at the industry and an attempt to unravel the mystery that is the car dealership. In nearly 100 pages of sleuthing and research, I have attempted to show the customer the reasons why they should service their car at the dealership.

I have nearly 100 pages that barely scratch the surface for the consumer on how and why to use the new car dealership for service and parts well beyond the warranty period and into the coveted customer pay arena.

We need a full scale effort put on by all of us to start changing the minds of the consumer, our customer that defected to our competition. Let’s start by telling them who we are and what we stand for and that we want to retain the ones we have and recover the ones we lost. I can also tell you just by conversations that I have had with my readers that they are certainly defecting to the independents. And they are leaving a lot faster than we can sell new customers.

The perfect example of this is as follows:

Wednesday I received an email from a customer who was driving a BMW 330i. She was due for her first service outside the covered maintenance period. She was quoted $450 from BMW Dealership. She was astounded by the price! She could not believe how much this OIL CHANGE was going to cost. Her next step was to defect to the independent shop.

I told her in my email response, that I was not sure what a service cost from BMW so I advised her that I would look into it. She then purchased my book “Cheating the Dealer” and decided to take a piece of advice I gave her. She read: READ YOUR OWNERS MANUAL! This is Shocking Advice! She read her owner’s manual and discovered the exact service required this visit. She called the dealership back and had the necessary repairs completed! She had the repairs completed at the DEALERSHIP!!!!! She was an educated consumer. This is exactly what is supposed to happen.

The service advisor at the dealership may say that he lost a $450 sale. Wrong answer! The dealership was about to lose a customer for life. The dealership took care of the customer properly. They serviced her as she needed to be serviced. She bought the correct $200 work and left happy with her dealership.

I want to encourage dealers out there that the days of high priced over the top services are over. I want to encourage dealerships to get aggressive with their pricing and recover that customer s who have defected to our true competition. Get aggressive and retain the current customers in your driveway.

I researched the habits of customers in my book project. I asked questions regarding their needs and wants. Customers want to be treated fairly. They would like to have their cars serviced at our locations. They just want to be serviced and not sold. They want us to be the location of choice. As Lee Harkins President and CEO of M5 Management Services, says, sell the creative effort, stop selling the business. That means sell the value of your dealership; sell the customer on your effort, your commitment to them and your service to their needs.

Let us go out there and make a full scale effort to win our customer s back. Car people are entrepreneurial, creative and smart. Let’s do this. I want to focus on this effort. I want to rally the cause. I want a full scale, multi level, multi organizational effort to bring this together. I want the dealership customer back in my store – and yours.

Steven E. Shaw

My consumer book is available on line currently at as a digital Ebook. It will be on Amazon in a few weeks. Get Ready America!

Stay tuned for the OEM Version coming soon!