According to an article published on Forbes.com, even world-renowned professors at Harvard Business School have a painful experience when shopping for a new car.
The Forbes article, part of a series that examines industries that provide bad customer experiences (ouch) and offers advice on how they can be fixed, describes many stories from consumers and just what things in the car buying experience they find so painful. Here are just a few that the article shared:
- Salespeople ignoring a female buyer and directing conversation towards the husband or male that accompanied her.
- Salespeople telling customers what they want rather than listening to what the customer wants.
- The whole back-and-forth game leading to the customer leaving just for the dealership to frantically call them later agreeing to accept the terms for the sale.
- The time consuming process from the moment an agreement is made through all of the documents and vehicle prep being completed.
I’m sure that you’ve heard all of these stories. Whether they occur in your dealership or not is irrelevant. The fact is that these are some of the types of concerns and pain points that consumers expect – and hate – in the car buying process.
Since the point of the Forbes article is to not only describe the poor customer experience, but also provide advice on how to fix it, the problem these Harvard professors believe prevents customer experience improvement in the auto industry is that we have a structural problem:
The deep divide between car manufacturers and dealerships.
Jill Avery, a senior lecturer at the Harvard Business School, and also the subject of one of the examples above, believes that automakers and dealers don’t have the same goals. Automakers, according to Avery, are focused on long-term relationships with consumers. While dealers are simply focused on selling a car today.
In a bigger picture, this may have a ring of truth. However, any dealer can tell you just how many calls they receive on the last day of the month from their regional OEM rep, to keep track of sales. Manufacturers are just as interested in dealerships selling cars – as long as they are new or CPO. So why do these professors believe that dealers don’t care about building long-term relationships with customers?
According to the article, “dealers enjoy an information asymmetry advantage over the consumer. The article asks, “What’s the incentive to add more transparency on things like invoice markups and service costs?”
Avery shared how an experience buying a rug in the Middle East should be how cars are bought. The rug salesperson acted as a consultant listening to her wishes, needs and desires. And, only after the perfect rug was found, was price discussed.
Consultative selling in the auto industry has been commonplace for years. The steps to the sale include discovering the customer’s needs and wants. It’s much easier to close a deal by listening to a customer and landing them on the perfect vehicle. And Avery is correct in that “price changes the discussion.”
Perhaps the dealership(s) Avery has shopped at don’t value customer experience or lifetime customer value as she believes. I believe that most dealerships understand that retention is important. That the lifetime value of a customer far outweighs the revenue generated from a single sale and that customer loyalty is important. It’s sad to read Schlesinger describe the car buying process as a transaction which is “a fight to the death between the buyer, sales rep, and the unseen manager in the backroom.”
The reality is that these Harvard Business School professors are certainly part of the pool of consumers. And there is no doubt that some consumers share similar stories and perceptions of car buying that mimic the professors.
Customer loyalty and trust is built from the first greeting. If salespeople aren’t respecting a customer in the car buying process, chances are poor that the customer will “want” to return to the dealership. Notice I said want. They may still come back for free services, warranty work or other services that they’ve decided are best filled by the dealer. But in no way does that mean that the customer trusts or is loyal to the dealership — nor has their perception of the dealership changed.
And therein lies the problem that our industry faces. Building customer loyalty doesn’t begin after the sale, but from the first interaction. Any friction, turbulence, or perceived slight can damage this relationship that is still in its most fragile stage.
While I believe that many dealerships “get it” and try to provide excellent customer experiences, we have a long hard battle ahead in changing consumer perception and the only way to accomplish that is the simplest one: prove them wrong.
When a customer comes in expecting it to be painful, make it easy. Show the customer their business is valued and appreciated in every way possible. By doing this, you be well on your way to earning a loyal customer. And you could also successfully change the customer’s perception of the car buying process. You have to start the race to finish the marathon!
Author: Tony Orlando
Tony Orlando is Vice President, Partner Development at Confident Financial Solutions (CFS), http://lift.mycfsapp.com, a leading developer of high quality financial solutions for automotive service centers and their customers. He has more than 15 years of automotive retail, OEM and 3rd party lead provider experience; 2 years dealership sales and service experience; and 13 years with both import and domestic OEMs. He spent 3 years with TrueCar, cultivating its business in the Southwest states, and maintains relationship with over 600 franchised automotive dealers and industry leaders.