There are big changes coming in the Automotive Retail Space......

Good afternoon Dealer Elite Members

Change is one of the only constants in the universe. The automotive world as you all know is overdue for this change as is a number of other retail environments. I was forwarded a very interesting article from a friend today that i think everyone in the automotive retail business should read. BMW who is one of the largest high end car companies in the world is taking the first steps in changing the way they sell and promote cars.

Here is the article:

http://adage.com/article/global-news/test-driving-bmw-s-concept-sto...

BMW, and others are starting the realize that retailers like Apple Computer and others are leading the pack in retail and they are trying to adapt some of the "best practices" from these retailers to change the buying process in the automotive industry. This is something that I know has be overdue in the automotive sector for many years.

Customers don't buy cars they buy an experience. The retailers who improve the customer experience and make it FUN and enjoyable to BUY or SERVICE their vehicle will not only command more business, but more revenue as well.

Customers are happy to pay more for a "GREAT EXPERIENCE", they won't however pay more for a car.

I will use this story that I heard years ago as an example of what will eventually happen in the automotive space. I was told this story in training years ago when I worked for Honda. The industry that is used is coffee, but it can be applied to any industry of course.

My Great Grandfather used to buy coffee beans, roast them, grind them and then brew his coffee. He had no loyalty to a specific brand of coffee, he would just buy the most affordable beans every few weeks.

My Grandfather was not like his dad, he would buy the beans already roasted and then grind them and make coffee. He was not loyal to any brand either, but he felt it made sense to pay more to save himself some time.

My Father would buy the beans already roasted and ground and then just brew the coffee. It was easier and faster and still affordable.

I just buy the coffee directly from the coffee shop for $1.50 a cup. I am busy and don't have time to roast, grind, or brew coffee anyways. I also buy Latte's for my wife for $5.00 a cup because it makes here happy and I enjoy the service at Starbucks anyway.

At the end of the story the trainer said the following thing which still sticks with me today.

"The person who changes the car buying process from it's current form into entertainment like Starbucks will be a very wealthy man or woman".

This is so true, coffee at Starbucks is all about the experience. They have turned coffee into a desert like experience and have been able to charge a higher price as well.

Stop just selling cars and start selling a top shelf car buying experience, or what I like to call Car Happiness. This is where the car business becomes fun and clients become happy customers. It is never about the money anyways.

I hope this helped you, please feel free to send me feedback and comments, I appreciate it!

Ian Nethercott

Performance Coach and Car Happiness Expert

Proactive Dealer Solutions

inethercott@bdcexperts.com

http://www.bdcexperts.com

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Comment by Adam J. Hofer on June 5, 2012 at 1:34pm: Bobby Compton is also 100% correct!! Create the activity, create excitement. ACTIVITY breeds SALES! There is nothing more valuable then having a full, busy showroom. When a customer walks into a showroom full of positive energy, and sales activity the likeliness they're going to buy goes through the roof!!! Having a showroom full of people is like having a showroom full of testimonials-it lets them know that this must be the right place if everyone else is here.

Thats what makes our direct mail marketing events so effective. We don't carry a magic wand to waive over the dealership and create sales out of thin air. But we do flood the showroom with customers and create a tremendous amount of activity and a sale environment-And this drives all the additional sales!

want to create a sale environment?? email me at adam@wolfingtongroup.com

Comment by Mike theCarGuy Correra on June 5, 2012 at 12:57pm: This post completely sums up why I LOVE this forum! It helps me know I am not alone in this biz, that there are many other people thinking the same things about the need for change. Not just the next 'magic bullit scheme/mailer/50 ft gorilla' that will put people on the lot quickly but REAL change that will impact customers entire opinion of the business. Thats when people's loyalty will return and true growth will occur. Great post Ian, thank you! :)

Comment by Jim Radogna on June 5, 2012 at 12:23pm: Great post Ian - Couldn't agree more!

Comment by Ian Nethercott on June 5, 2012 at 9:51am: Good morning Dealer Elite members. Thank you for all the great comments and feedback. I truly believe that automotive retail is all about customer experience. Just look at great retailers like Apple and Nordstrom's and of course Starbucks for instance. Look at high end hotels like Hilton and others. These places create truly wonderful environments and provide a high level of service as well. Of course in the car business we need to also make it fun and transparent for the customer because of what we have not done well in the past but price alone does not sell anything.

Thanks for all the great comments and start creating that wonderful sales and service exsperience for your customers today!

Make it a great day!

Ian Nethercott
Performance Coach and Car Happiness Expert
Inethercott@bdcexperts.com
Http://www.bdcexperts.com

Comment by Adam J. Hofer on June 5, 2012 at 9:03am: This is 100% true! Its ALL about having fun!! If anybody doubts that "having fun" and creating an "experience" for your customer is not important, take a look at your sales staff. What makes the most successful salesperson just that? More than likely this person is always having fun, always creating and experience and always listening to the customer so that they may address the customers main objective during the purchase and not waste their time on anything else. And usually while all this is going on.....they're not talking about price! In fact, just like the Starbucks customer, they know they could probably go somewhere else and buy for a little less money, but this salesperson makes them happy!!! And these customers will continue buy again and again. Its safe to assume that the salesperson who doesn't get to many referrals and is the first to complain about their check on Friday......IS NOT creating an experience for their custom, OR having fun! They probably spend most of their time trying to convince people they're getting the best price, which is costing them and US....A lot of money!

Isn't having fun at work one of the reasons most of us ended up in this business??

Want to really create some fun and excitement in your showroom? Give your customers a truly enjoyable buying experience and generate some real gross.....All with respect to CSI. Talk to me about doing an event sale in your store. You'll be glad you did. Email me at adam@wolfingtongroup.com You'll be glad you did!

And it will be FUN!

Comment by Bernard Boule on June 5, 2012 at 8:57am: Comparing buying a coffee for 1.50/5.00 to a car at 15,000/50,000 isn't quite the same thing. True people need to feel good about going to a dealership to buy a car the same way they need to feel good about going to a coffee shop to buy coffee (BTW I really don't like the Starbucks coffee shop model. I feel like I'm being ripped off when I go there).

I have been hearing people refer to dealerships as "Stealerships" and I believe that is a real problem. Is there a possibility that people avoid dealerships because they believe they are being robbed when they go there to do business.

I took my SRX in to have it checked because it was running rough and the engine was making noise and surging while there were no notices or lights on indicating any engine trouble. They told me I had ruined my engine by running it out of oil. I had them drain and refill the engine. The noise went away and I have put 30,000 on it since then. My new engine still sits on the floor of my shop waiting for the ruined engine to show some sign of failing.

Things like that destroy public confidence in dealerships.

Maybe Dealers should make a genuine effort to become the place to go when customers need service and show that they are there to look after their customers and actually, really be the place to go, to get the best deal on service. If that message got out in a community buyers would show up to buy, confident they were not dealing with a "Stealership". Just sayin'.

Comment by Leonard Buchholz on June 5, 2012 at 8:33am: It is a revolution that is overdue IMHO. Great article and dead on the money.

Comment by Mark Tewart on June 5, 2012 at 7:30am: I agree with all that was said in the article and the comments. In the car business, it seems as the more that things change, the more they stay the same. The time is right for a radical change to the buying experience. In many ways we are stuck in the 50's. I can definitely understand the factories emphasis on upgrading their brand through better facilities but the facilities won't matter if the experience is lacking. Even with the influence of the Internet, the sales process has not changed significantly in the auto industry. What is lacking is the marriage of information that is being received at all the digital conferences to the whole dealership sales experience. There are so many parts in the sales process that are held as almost a religion that we simply must LET GO. Let it go.

Great comments and article.

Comment by Robert Camp on June 5, 2012 at 6:38am: Years ago Mercedes-Benz conducted a survey of its customers and dealers, this was before CSI. One of the things they learned was that CSI, as it was known at the time, had an inverse corelation to the dealerships facility. Essentially auto dealers who had built "fancy" facilities would remark,"what do you mean I don't have good CSI, look at what I've done" referring to the impressive facility they had built. Will a dealerships facility ever be a stand in for good retail practices? We all admire a beautiful dealership facility but, it might be easy to think a multi-million dollar investment translates into happy customers, maybe.

Comment by Ralph Paglia on June 5, 2012 at 12:45am: This is a great article... automotive retail needs to reinvent itself and transform the customer experiences we deliver so that dealerships are not places that people avoid, but instead become locations that attract people, and which automotive consumers aspire to have a reason to visit.