Apparently!

At the end of the day, the dealership model needs to evolve to survive. What we know is, consumers don't like the current model...but that doesn't mean that the current model has to disappear. If I were a leader in the automobile dealer industry, I would push for dealerships themselves to revamp how they operate in an effort to try and address consumer pain points. They need to re-tool their staffs and how they are compensated to emphasize salespeople as the knowledgeable advisors they should be, not the commission desperate, poorly educated and non consumer focused people they are today. They should embrace transparency and build into their pricing the profit they need to make and stop playing games with consumers. They need to find ways to add value and to convince consumers that they are a worthy part of the carbuying process so that consumers don't want to do business with manufacturers directlly. They should seek to elevate their industry and look at each customer as an opportunity to confound their expectations.

Examples...do you need 30 poorly paid commissioned salespeople who present poorly and irritate consumers with 2 sales managers who sit in an office and don't interact with customers, or can you provide better service with 5 well compensated professionals that are paid salary and on a bonus system tied to customer satisfaction who are supported by 10 well trained customer service personnel to present the product and conduct test drives? Reality is you can't pay high quality salespeople enough commission to attract them to car sales, so you have to think outside the box.

Being in an industry that has this problem itself, the real estate industry I understand where people like jallen are coming from. He's devoted his life to this industry and believes in it and its very frustrating when people put it down. BUT, I don't pretend consumers love us and have a high opinion of us as professionals...because they don't. Pretending they do doesn't do me or my industry any favors. What I have done is aligned myself with like minded people and like minded companies that seek to add value and elevate the industry and position it well for the future, and I personally work to confound the expectations of every skeptic I come in contact with.

 

When I bought my LS460, one of the reasons I bought it when I did is because there was ZERO pressure from the sales dept. I got a call from my friend who worked at the dealer (in new car sales at the time) who told me he had the car I had been looking for, for years, sans one or two features. He sent me pictures, I went to Park Place Lexus, looked at the car, drove it, decided to buy it, he passed me off to Ryan (Flipside909 here on CL), and I owned it 15 minutes later. No hassle, about 2 hours from my arrival to the dealer, to me leaving. I never even got a sense that either Ryan or Parker (both of whom I call friends now) ever did anything different for me than any of their other customers. And that's as it should be.

To that point, the next time I have to go to buy a car from a dealer, guess where I am going? Park Place Lexus. If they don't have what I want at that time, they'll find it and call me when they have it. What is so hard about that business model? Everyone was professionally dressed, no feelings of apprehension, it was handshakes and smiles, and nobody even mentioned anything about dealer add-ons. Dealer's shouldn't be mentioning ANYTHING about selling extra stuff unless asked by the customer. If I want it, I will ask. That is the very first thing that needs to change.

Also, stop your staff from waiting by the front door like vultures. If I need a salesperson, I will ask for one. Not hard.

Changing these two things alone will drastically improve customer-dealer relations in almost no time.

 

With this year's market conditions, it's up to $41,000.

 

not sure that's reasonable since customers may not be aware of some of the things the dealers offer. yeah i know most of it is b.s., but maybe a person wants the extra wheel/tire warranty because they've had issues in the past. however, dealers shouldn't take hours to go over all that, pressuring on each one. i'm sure i'm not the only one who's told the person pitching all that stuff, after 4 or 5 of them, that if they don't stop i'm leaving. instead of one at a time, a list of all the items could be presented first for quick review. instead, they do it like chinese water torture, drip, drip, drip... if the present the list and you say 'not interested' that should end it.

haha, this. less likely today, but in the past not only were the vultures waiting, most were smoking, making a wholly unpleasant 'welcome' to the dealership.

 

I tend to agree with you on that one (I don't like it, either), but many other people do want representatives from the dealership to greet them as they walk in. It gives them a sense of being welcomed as customers.


Also, notice, when you are browsing the dealer-inventory on the web-site (what little inventory there is these days LOL), those little boxes that pop up on the screen where one of the dealer-reps, and a face, asks you if you need help?

 

I don't want them to jump on me the moment I walk in the door, but if I'm in the showroom, yeah, I probably need assistance. I find it off putting for them to all be standing around yukking it up with each other ignoring me. Give me a few minutes, and then come over and offer assistance.

 

Man, some of you have bad luck with dealers! I have had challenges in the past, but it's been about negotiating price and trade in value, not about extras offered in the finance office. They just show me the stuff they offer and I either tell them what I want or tell them I don't want those items and they move right on.

 

I was shopping with my mother-in-law for a car last month, and that was exactly the problem-- the dealer never "showed us the stuff". There was a $995 charge on the final expense sheet for "Wheel and Tire Package" that they never asked if she wanted, and didn't point out; they just hoped we wouldn't notice, and then tried to blame us that we didn't "notice" some generic fine print on the sheet calculating the monthly financing payment.

 

Congratulations on your MBA. I just finished mine in July. Someone else may have mentioned this already, but in many states there are laws prohibiting direct from the manufacturer sales. I believe Tesla had a lot of problems because of these laws. Good luck!

 

Hey there.
Great thesis.
Fortunately, the market is moving in that direction.
When I got my MBA at the University of Miami, I did some marketing consulting for Norman Braman, who owned a number of labels in Florida. He wanted to determine if it was feasible to sell cars from showrooms in malls. I did a lot of research which was valuable at the time to him. I could go into a lot of details related to this and my experience importing and exporting cars and salvage as well.
Here is an impediment in the direct to consumer model, which Elon Musk encountered:
many states require physical dealers in the state. It's a small hurdle in the scheme of things.
Feel free to DM me I'll be happy to help.

Gene Evangelist

 

Exciting topic no doubt. Changing the dealer model has been a long & hard fought by many manufacturers and dealer advocate groups. Here in Canada, the most recent court cases on this topic was Tesla's direct selling model - which cuts out opportunities for dealer groups to form or buy-into a franchise. Tesla was ultimately successful; building manufacturer direct retail/service locations across Canada. Additionally, some dealer-groups have taken to task on providing different methods of purchasing; be-it showcase stores in popular mall locations, or taking the vehicle to the customer (Carvana).

As for by-passing the dealership - very few methods out there that circumvent the need for a dealer license. Take for example Cars & Bids/ Bringatrailer, those auctions cross sell from Business -> Consumer/ Consumer-> consumer/Business->business/consumer->business etc...
Another Canadian company, MotoInsight, provides a online retail tool for manufacturers to make available to their customers. For example, the TYPE R LE was launched in Canada with Honda using a Honda to Customer DIRECT form of ordering.

The structures are there for us to use - but further there are regulations and dealer groups that need to accommodate the new methods of doing business. We have the tools, just need to build something with them now!

Now this is a over-simplified outlook - we need to consider the ripple effects of the shift. Dealer groups and retail store employ a significant amount of people in North America - cutting out the dealer means cutting out that group of people. That steers us into the conversation about the economic implications, which steers us into the question of future outlooks which steers us into a whole array of various tangents.


I've been in the industry for 14 yrs, starting in dealer sales, moving to wholesale, then to Captive Finance (Honda Finance) and managed remarketing and dealer relations channels. I'd love to help if you find a need!

 

Spot in, and here's the issue.

One buyer doesn't want anybody talking to them unless they ask.

Another buyer thinks they're being avoided by the sales staff for any number of reasons (can be real or imagined).

No great answer, but a good reason to have top quality salespeople that can read the buyer and come up and say "I'm X, I see you are looking around and I just wanted to introduce myself and let you know if you need any assistance just give me a yell or text / call my cell and let me know you're ready for some help". Not a lot of those and not a lot of dealer environments that would be conducive to that sort of behavior with multiple salespeople competing for customers on the salesfloor.

 

That friggin chat window is almost just as obnoxious. I have no issues with a greeter at the door, even to hold it open for customers. Just make it one person at a time. Lexus Dealers do this, they have a door greeter (might be a salesperson, unsure) who walks you to the concierge desk where they ask how they can help you. I have said a few times "I am just browsing as I had some time to kill, no need for assistance right now, thank you." and that's the end of it. I don't want to waste a salespoerson's time if I don't need one, as I know (especially in that profession) there is nothing worse than a tire kicker.

Right, and I get that. Most buyers probably arent as informed as we forum-goers

Yes. "Hi, I am Jim, I would be happy to offer assistance if you need it at any time. Here's my card, text or call this number and I will be right with you ". Easy.

They do this so often. I was once buying a car with a family friend of ours, (single mother). She had picked out a Chevrolet Traverse on the lot, loved it, we went to the finance office and was offered 0% for 60 months (pre covid). We got all the way to the end, she was just about to sign and I saw something weird. GM's financial arm had tried to tack on a $5,000 "Finance Charge" on a 0% interest loan. uhh what? 0% is 0%, no finance charges. We left and went to another dealer down the road. If I hadn't went with her, who knows?

Thanks, I put your username on a post-it note so I can PM if needed.

It's not that I don't want anyone talking to me, really. But, 12 salespeople congregating outside the main entrance kicking rocks and playing grab-***, waiting for the next unsuspecting victim is kinda sus.

 

Thats right, a lot of people feel ignored if they are just left alone, theres no one size fits all. What I do (when I'm in an open house, which is sort of similar) is exactly what you described, introduce myself and let them know if they need anything or have any questions please let me know, and then I circle back when they go to leave and thank them for coming and ask them what they think etc.

With car sales or retail sales the issue is that they compete with each other, so if you don't get one customer and someone else is closer by when they do want help, you can lose them so thats why they are more aggressive. That can be solved by having someone keep track of who is owed the "up" and make sure that person is linked back with them when they want help. You see that some, especially in luxury dealers.

Where it gets aggressive is when they're already walking up to me before I ever even get out of the car, and that comes from them competing with each other and one of them trying to claim "dibs" on me.

I bought a mattress one time, and apparently the guy who helped me wasn't quite "on" yet, and as he was ringing me up the woman who was there openly started arguing with him about who would get credit for my sale, it was a big one it was like a $4k mattress. They really were going back and forth about it, and I finally just got up and said "I don't want to cause you guys any problems, just forget the whole thing" and I walked out. The look on their faces was priceless. So unprofessional.

 

That's terrible, I agree. I do always check for those kinds of add-ons but I guess I've been fortunate so far.