The automotive industry is maturing. That means companies can no longer rely on increasing market share for profits in the long term. At the same time it is expanding. That means non-traditional competitors are increasing their attack on the highly profitable after-market areas, eroding your business profits even further.

 

  Today's customer is buying more than just a product alone: he/she is buying lifestyle, image, convenience, and back-up - "service" in the widest sense. "Service" that will dictate customer satisfaction and retention levels, which are the keys to your ongoing success. "Service" that will be the "brand" differentiator of the future.

Why do people pay more?
Have you ever wondered why Toyota can get more money for their product than, say, a comparable GM vehicle, new or used? Was it because of the perception of higher quality or back-up service, or was it something else? Why is it people will pay more for a Sony television, even after the salesperson informed them that all they are paying for is the name? Ever wonder why your staff passes by the free coffee at work and sends out to Tim Horton's?

Could it be the value of the "brand?" How do people perceive your "brand?"

Building and location?
You spent a fortune designing and building a fancy new dealership and made sure the location was the best in the area. The new store is bright, clean, well-equipped, and easy to get to. Parking is easy and the store's departments are all well signed. This is the store of your dreams.

How about the staff?
You staffed the store with the best people available, and made sure they all adhere to a formal dress code, so they all look professional. At this point you should have it made, with your great looking store and smart looking staff.

Customer retention?
So, after a huge investment in bricks, mortar, and people, why is it you still only have 30-percent customer retention? Or more to the point, why do 70-percent of your customers go somewhere else to get their vehicles serviced?

Maybe you are one of the fortunate few doing better than that, but probably not by much. Couldn't it be a lot better?

It could it be that you are missing the boat in terms of branding your dealership and promoting the perception that you provide quality customer service at a fair price.

Why are you spending money creating new customers?
If the average customer buys 15 vehicles in a lifetime, at an average price of $30,000 each, that equals $450,000. Add in the related parts-and-service business, and every customer you keep for the long haul could be worth over half-a-million dollars gross to your store.

Sure, you can keep looking for new customers to replace the 70 percent you are losing, but is it not smarter, and less costly, to keep the customers you have coming back?

What makes you different?
Hanging a sign outside your store, saying "We are No Worse Than Anyone Else," probably would not help your business grow. But that may be the message your customers are getting, even without the sign. The fundamental question is, why should a customer spend money with you? What makes you a better place to do business? Have you sold your leading edge to your customers?

An interesting question I often ask during a seminar is, "where do you go as a consumer to spend your money? Where the branding is so good you will pay a higher price and won't switch to another company?" Sad to say very few hands ever go up.

Branding your business!
Positively branding your fixed operation could require a major culture change. A good place to start might be with customer focus-group meetings to identify how your customers perceive you now. Then follow them up by defining how you want your customers to perceive you, and start working on ways to close the gap.

You might be surprised to find that you offer some great services to your customers - but keep them a secret. With ever-increasing choices available, and customers going to one place for tires, another for an oil change, and yet another for brake service, it might be worth taking a look at what distinguishes you in the market place.

For example, you can provide all those services from a single source, can you not? And isn't the potential for one-stop-shopping a major benefit for customers?

If you recognize that we all have to change to survive, then maybe it is time to scrap your traditional inside-the-box thinking. Why not step way outside the box and build a new store with a Tim Horton's, a post office, and a child day-care centre? You don't have to go that far, of course. But neither are you restricted to just watching 70-percent of your customers drive down the road to your competitors, while you pray for your next dollar.

If you have to, stand on top of the building and shout it out!
Many of you offer free shuttle service, free pick-up and delivery, free top-ups with oil changes, free car washes, free gourmet coffee, free newspapers, great menu prices, and the list goes on. But we as a group are still perceived by many of our customers to be cold, expensive and uncaring. We have to start blowing our own horns.

As an old boss of mine used to say, "If you don't tell the customers what you did for them, you didn't do it!"

In closing, General Motors is an easy target and has taken a lot of heat recently, but at least it has attempted to brand the fixed operation, with Mr. Goodwrench. Too bad that not many dealers seized the opportunity and dared to be different.

In forty years of driving, I have only been "wowed" by one service department. Tell me what do you do differently that would "wow" me, and keep me coming back as a customer.
 

Jim Bell, of Oakville, Ontario, has been in the auto business for more than 35 years and brings a wealth of industry experience. He is a writer, consultant, and motivational speaker. You can reach him by e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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