Opinion: Why car dealerships are turning into coffee shops
02-09-14, 12:17 AM
#17
Lexus Test Driver
Coffee, even expensive gourmet coffee, at most only typically adds a tiny amount to a dealership's overall operating expense. I don't see where it would have much, if any impact, on the dealership's bottom line. The cost of the dealership providing the Internet terminals you want (and PC's, if needed), is probably far more significant. Not everyone runs around with a Blackberry or Smart phone (at least not yet).
What a dealership WILL need, of course, if they do have regular (not decaffinated) coffee is nice rest rooms. The high concentration of caffiene in coffee stimulates urine production almost like a diuretic.
What a dealership WILL need, of course, if they do have regular (not decaffinated) coffee is nice rest rooms. The high concentration of caffiene in coffee stimulates urine production almost like a diuretic.
02-09-14, 12:28 AM
#18
Lexus Test Driver
It's more of a question of what form do you want your discount to be in. I'm saying it's more important for me to save $ on the deal, rather than have it go to free internet and fancy coffee.
02-09-14, 12:34 AM
#19
Lexus Test Driver
02-09-14, 12:09 PM
#22
Lexus Fanatic
Coffee generally doesn't cost much, but car washes are another matter...especially for automated ones. They tend to use a lot of energy...and require maintenance.
02-10-14, 08:09 AM
#24
Furthermore, dealerships make a lot of their money not on car sales, but on service. You're saying they should make less money on car sales, and then even less on the service. What is their incentive to do this? Consumers have shown again and again that they care not about the price they pay, but the service they get. If this was not true, no one would ever shop anywhere but Wal-mart, or we would never have the customer service horror story that drive people from a particular business for the rest of their life.
Why is customer service so important? Because it's always the LAST experience you have with your dealership, and humans judge the quality of their experiences only at 2 points - the peak, and the end. http://en.wikipedia.org/wiki/Peak%E2%80%93end_rule, see also: http://www.psych.uncc.edu/pagoolka/pbr96.pdf in which people rate less pleasurable experiences as more pleasureable due to the end rule. How much you PAY for a car is neither of these - the peak is the feeling of joy at driving away in your new car, and the end is, obviously, the very last interaction you had with the service department.
Your suggestion would result in a bargain dealership with high customer turnover. Anyone can compete on price. That's the easiest thing in the world. It's providing the best experience that is intangible, difficult, and as we've seen from stories such as the Camaro ZL1 that was taken for a joyride by a dealership employee, often gets ******ed up. Providing good experiences is difficult because it's not about how you experience the situation, it's how you remember it, and these can be very different things.
Last edited by Infra; 02-10-14 at 08:14 AM.
02-10-14, 08:21 AM
#25
It's funny you mention that, because the line I've heard from salespeople and industry people over the years is, "Well, we can't discount it THAT much.... we still have to pay for your free washes and fill the coffee machines." In other words, *you are paying for these services and perks.* I'm not saying cut out coffee, I'm saying I don't need Starbucks, leather couches, and gold-trimmed desks. Give me the basics to be comfortable and let the deal, customer service, and car speak for the experience.
02-10-14, 08:25 AM
#26
Lexus Fanatic
It wasn't necessarily an age issue. Gold trim was simply a fad. And it was not very durable...just a thin gold coating on top of plastic or silver underneath. Run it through an automated car wash a few times (or rub it down with wax) and the resulting abrason caused the gold coating to start wearing off very quickly.
Last edited by mmarshall; 02-10-14 at 08:49 AM.
02-10-14, 08:33 AM
#27
Guest
Posts: n/a
And I'm saying that you simply won't care as much as you think you will. You judge the "goodness" of whatever deal you get by the standard of what you expect the average person pays. If this anchor is already set quite low, you are not going to feel that you got any sort of "good deal". This is why salesman will write down a number, and leave it in front of you while you negotiate. They are well aware that you will, as a matter-of-fact and quite outside of your conscious control, negotiate from that number rather than the number you'd like to pay. See page 14, anchoring bias: http://www.cog.brown.edu/courses/cg1...kyKahn1974.pdf
Furthermore, dealerships make a lot of their money not on car sales, but on service. You're saying they should make less money on car sales, and then even less on the service. What is their incentive to do this? Consumers have shown again and again that they care not about the price they pay, but the service they get. If this was not true, no one would ever shop anywhere but Wal-mart, or we would never have the customer service horror story that drive people from a particular business for the rest of their life.
Why is customer service so important? Because it's always the LAST experience you have with your dealership, and humans judge the quality of their experiences only at 2 points - the peak, and the end. http://en.wikipedia.org/wiki/Peak%E2%80%93end_rule, see also: http://www.psych.uncc.edu/pagoolka/pbr96.pdf in which people rate less pleasurable experiences as more pleasureable due to the end rule. How much you PAY for a car is neither of these - the peak is the feeling of joy at driving away in your new car, and the end is, obviously, the very last interaction you had with the service department.
Your suggestion would result in a bargain dealership with high customer turnover. Anyone can compete on price. That's the easiest thing in the world. It's providing the best experience that is intangible, difficult, and as we've seen from stories such as the Camaro ZL1 that was taken for a joyride by a dealership employee, often gets ******ed up. Providing good experiences is difficult because it's not about how you experience the situation, it's how you remember it, and these can be very different things.
Furthermore, dealerships make a lot of their money not on car sales, but on service. You're saying they should make less money on car sales, and then even less on the service. What is their incentive to do this? Consumers have shown again and again that they care not about the price they pay, but the service they get. If this was not true, no one would ever shop anywhere but Wal-mart, or we would never have the customer service horror story that drive people from a particular business for the rest of their life.
Why is customer service so important? Because it's always the LAST experience you have with your dealership, and humans judge the quality of their experiences only at 2 points - the peak, and the end. http://en.wikipedia.org/wiki/Peak%E2%80%93end_rule, see also: http://www.psych.uncc.edu/pagoolka/pbr96.pdf in which people rate less pleasurable experiences as more pleasureable due to the end rule. How much you PAY for a car is neither of these - the peak is the feeling of joy at driving away in your new car, and the end is, obviously, the very last interaction you had with the service department.
Your suggestion would result in a bargain dealership with high customer turnover. Anyone can compete on price. That's the easiest thing in the world. It's providing the best experience that is intangible, difficult, and as we've seen from stories such as the Camaro ZL1 that was taken for a joyride by a dealership employee, often gets ******ed up. Providing good experiences is difficult because it's not about how you experience the situation, it's how you remember it, and these can be very different things.
I agree people do want better service and will pay for it. Its always funny to see people who own a Lexus and a non-Lexus and they complain about the loaner they got, if they even get one. When my wife (finance at the time) had an Altima I hadn't stepped into a Nissan service bay in ages and I went to two different dealerships and was kind of appalled at the conditions. Dirty, small, cramped, cold. She never really thought about it until we took her Altima to Hennessy Lexus of Gwinnett for service and she was treated super nicely, given a RX loaner and the dealership was like a luxurious hotel. She couldn't go back to Nissan lol (and I wasn't going to let her). She wasn't a car girl at the time so it was interesting to talk to her and pick her brain about service/dealership experiences and expectations.
02-10-14, 08:54 AM
#28
Lexus Fanatic
In this age of (often) free service from the manufacturers as a sales-incentive, how much they actually make on service, in some cases, depends on just how much the shop can get reimbursed from the manufacturers for doing those free oil-changes, tire-rotations, diesel-urea solutions, inspections, etc.....in addition, of course, to regular warranty repairs, which are also re-imbursed by the factory.
02-10-14, 10:49 AM
#29
>>>As your car showroom becomes more Ethan Allen than Honest Ed's, those executives might just be forgetting that substance always wins out over style. I want my dealer to know about cars not coffee, someone who knows the difference between a Buick and a barista.<<<
I want my dealer to know cars, and also serve good coffee. Both are needed by most of the population. What better way to serve them? Additionally, this also stops shelling out loaners for couple of hour services.
I want my dealer to know cars, and also serve good coffee. Both are needed by most of the population. What better way to serve them? Additionally, this also stops shelling out loaners for couple of hour services.
02-10-14, 10:54 AM
#30
