Do Consumers Want It To Take All Day To Buy A Car?

Posted on May 14, 2012 by Arnold Tijerina

I answered a question posed on Quora about 6 months ago. The question was:

Why does it take so long at a dealership to buy a new car?

“Once the price is agreed on, the loan or lease is approved and they have your down payment, why do new car dealerships drag the car buying process out by making you talk to sales managers, account managers, loan managers, etc. etc. and have you sit and wait for their people to sign paperwork. Used car dealers don’t seem to do this. Why is buying or leasing a new car a multi-hour inconvenience for the customer?”

My answer was as follows:

“In many cases, it only has to do with the inefficiency which that dealership is run. Typically, all these people are talking to you so that you don’t get upset for the wait so they’re just trying to keep you busy. They may also be waiting for a response from banks about the loan (keep in mind that many sales managers base the interest rate on their knowledge of what the banks will “probably” give you and not until a deal is accepted do they actually input all of your information and send it to the bank for an official approval. Whether they do this will depend on your credit.) They also have to get the vehicle ready for you to take delivery. This entails a thorough washing and detailing as well as putting gas in the vehicle. The finance manager has to get all the paperwork ready for you as well. There are many factors that could be a reason why you have to wait BUT many dealerships nowadays have made the process more efficient for customers as they know that many people feel like you so they are making their processes more efficient so that your experience is more pleasant.”

A new answer was posted a couple of days ago that floored me:

“I feel your pain… but unfortunately I think most people like the fact that it takes so long, and that’s part of why dealerships continue to do so.

Buying a brand new car is a big deal and has huge significance economically and, more importantly, culturally. I don’t think most new car buyers would be happy if it was as simple as swiping their credit card at the grocery store (though I would be) because they might have buyers remorse immediately after… things wouldn’t add up… this is such a huge deal, why didn’t it feel like it?

By taking all day, and exhausting you, I think they lessen the chances that you will change your mind or be unhappy with the purchase… because it’s going to feel like you just ran a marathon… and no one will walk away feeling like their big day wasn’t just that.

Also they love having you in the dealership all day, it’s the perfect way to maximize their chances of selling you add-ons with your purchase and have you look at your next dream car.”

It certainly wasn’t an answer I was expecting. (The person who answered is a mechanic but it’s unclear whether he’s an independent or at a dealership.) Personally, I always wanted to complete a transaction as quickly as possible (both when I was on the floor and while in the internet department) and had no interest in being tied up with one customer all day. It never crossed my mind that a consumer may actually want it to take all day to complete the transaction.

Do you think there’s any merit to his theory that consumers WANT (or NEED) to take all day buying a car to emotionally satisfy their large purchase?

All Salespeople Are Liars

Posted on May 9, 2012 by Arnold Tijerina

For almost 3 years, I have been posting a comic every day on my Facebook account. I do this because I like to think I bring a smile to at least one person a day. I look through comics every morning in my attempt to share a “good” one. Yes, believe it or not, I do put effort into choosing which comic I post. I’ve started noticing a disturbing trend. Many comedians use reality-based comedy and it seems this also translates into comics. Syndicated comics, by their very nature, are designed to be funny and appeal to the masses. I see comics like these below on a regular basis and, personally, I do not find them funny. In fact, quite the opposite.

We all know that the history of sales (especially car sales) has earned us a bad and, some would argue permanent, reputation amongst consumers as being deceitful, manipulative and… well.. liars.

I think everyone can agree that, as an industry, there have been a lot of changes in how car dealers do business. Some of these perception-shifts have been due to the fact that consumers not only have more access to information but also because they have access to more dealers. In the past, consumers were limited to dealers in their local area. The number of dealers they could realistically get prices from and shop was limited by how many they could physically visit and how much time they had on their hands.

The increase in the amount of information available to consumers brought the ability to access more dealers in less time. It has also brought consumers a quick and easy way in which to analyze not only different prices via internet quotes but also to identify who they want to do business with. There have been many debates and opinions over time in various automotive industry forums on how dealers should interact with customers and how much information they should share as well as hostility towards consumers, vendors, OEMs and websites for sharing information which effects a dealer’s ability to profit from a sale. In my opinion, this only fuels the stereotype. Consumer’s have access to this information and it isn’t going away. Attempts to take it away and/or make it less available only serve to promote the negative image. Consumers already don’t trust dealers. Hiding (or reducing) the amount of information available to consumers will only make them trust dealers less.

No matter what you do, you will not be able to change this stereotype for our industry as a whole. You can, however, change how you do things at your store… which is a step in the right direction.

Here is my opinion on best practices:

Be transparent. If a customer asks for information, give it to them. It doesn’t matter if they ask you in person, over the phone, via an e-mail or via a 3rd party lead submission. Chances are they already know the answer. Any attempt to dodge, evade or avoid answering the question will make the customer think you have something to hide.
Establish and maintain a solid online reputation. Yes, consumers are increasingly looking at the various review sites and using that information to help decide whether to do business with you.
Give consumers “real” numbers up-front. Many consumers already know most of them anyways. Don’t try to undervalue trade-ins or manipulate numbers on a pencil. The days of “scraping them off the ceiling” are over. This is an “old-school” mentality and its only outcome is detracting from your dealership’s integrity. They may still buy the car but they won’t leave with a great impression of your salespeople or dealership. Of course consumers are looking for a “good deal” but, I believe, they appreciate honesty.
Get rid of bad apples. If you have salespeople or management staff who lie to customers, play games, or fudge numbers or information. Fire them. They will only hurt you in the long run. Customer don’t have loyalty because you didn’t earn it from them.
Take care of your customers. Your customers are your life-blood. Dealerships have more income potential in fixed-ops than in sales. Treat them like royalty and they will come back.
Pay attention to your customers. Many dealerships never contact customers post-sale until the dealer believes they may be in-market again. Follow-up processes should not simply be about selling them another car. It should be about appreciation. Call them on their birthdays and anniversaries. You have a better shot at selling them another car by not trying to sell them another car.
Stop treating salespeople as expendable. Most customers don’t expect their salesperson to work at your dealership long. Be a company people want to work for. Reward and encourage employees to stay around. Get rid of managers that are quick to replace salespeople. Customers will notice.
Engage your customers. Don’t just pop in and out of their lives to tell them about your upcoming sale. Once you’re in their lives, stay there. Use social media, blogs, newsletters, customer appreciation events, and any other tools you can to remain not only in their lives but in their minds.

While doing these things won’t change the perception of our industry as a whole, it CAN change the perception of the most important person in existence….

Your customer.

Amazon Now Competing With Dealers

Posted on April 23, 2012 by Arnold Tijerina

Amazon.com announced the launch today of a new store AmazonSupply.com

The site, as reported by Mashable, is “aimed at buyers in the business, industrial, scientific and commercial spaces”, however, anyone can order from the site.

Being that I buy pretty much everything from Amazon (including my daughter’s loft bed and, most recently, a refrigerator), I was curious as to what this was all about.

To my surprise, they are offering a wide variety of auto parts, car care items and even wheels and tires. (See the Fleet & Vehicle Maintenance category).

As you can see, they have quite a large inventory of items. Unlike Amazon’s Marketplace, it’s unclear whether these items are being sold by Amazon directly or through third-party sellers.

How, or will, this effect your parts business?

Amazon has typically made sure they are the lowest price in any market. With free 2-day shipping on orders over $50 and no sales tax (in most cases), I’d say they have a distinct advantage from the get-go.

How long before they try their hand at selling cars or listing dealer inventory (at a cost, I’m sure). Amazon is increasingly trying to be a consumer’s one stop shop for everything. I’ve bought everything and anything imaginable on Amazon and have yet to find something NOT on Amazon.

Consumers may always need someone to install and service the vehicles but it just became a little easier and more attractive for them to not spend money in your parts department.

How Reviews Stop Buying Decisions

Posted on April 4, 2012 by Arnold Tijerina

First, it’s been way too long since I’ve blogged. For those who care, I apologize. I’ve been very busy in my new role with a great company, 3 Birds Marketing, and I’m very grateful that they invited me to join their team.

We all know that reputation management is mandatory in today’s digital world. Consumers have increasingly more information at their fingertips and there are more choices than ever out there. With auto brands barraging consumers with marketing, consumers are continuously relying on reviews to help make buying decisions. Studies show that consumers have more confidence in reviews left by other consumers than any other type. Everyone knows the importance of building and maintaining a solid, balanced reputation across all the review sites.

When can reviews actually stop the buying process?

I’m NOT talking about someone choosing WHO to buy from necessarily. Part of the problem is that consumers are so overwhelmed by reviews about your PRODUCT that not only is it essential to maintain a great reputation as a DEALER but to also pay attention to reviews about your brand and models.

Here’s an illustration I found that details pretty accurately what can happen:

Has this ever been you?

How do you prevent consumers from progressing past panel #1 in that comic?

Imagine this scenario… A customer comes into your dealership. They find a car they like. They go online on their phone to see if they want to do business with YOU. While reading your dealership’s reviews, they also come across product reviews from consumers saying positive things not only about YOU but also about the car they are trying to decide upon. After deciding they are comfortable with you, it’s possible that a consumer wouldn’t then feel the need to progress to product reviews on other sites and it could help avoid the progression illustrated in the comic.

In addition to not only building a solid reputation online across ALL review sites (not just focusing on a single site or two), why not also encourage your customers to say great things about your BRANDS and models?

There’s no reason why you can’t ask your customers to write a review about the car they purchase from you. Not only does this add to your reputation but it provides relevant and fresh content that could assist your dealership in not only appearing in name searches on Google but also brand and product searches.

There’s no reason why you can’t leverage consumer product and brand reviews on all of your review sites that can assist your dealership in gaining exposure that your competitor wouldn’t have.

If a consumer is trying to make a decision NOT on whether to do business with YOU but on whether to purchase your PRODUCT, a good mix of both types of reviews can certainly help prevent consumers from progressing to indecisiveness.

NADA 2012: Day Four Recap – Final Day

Posted on February 9, 2012 by Arnold Tijerina

By Day 4 of NADA, I was totally wiped. Between walking the exhibit hall, networking, and night-time adventures, I didn’t have a lot of gas left.

Day 4 in the exhibit hall had me looking for some cool swag for my daughter. Not many booths had “kid” swag (lighty-blinky things, etc. A lot of footballs but not much else). In my treasure hunt, I managed to get a caricature done courtesy of Jack Behar and the VisuallyLinked booth, a DealerTrack 1/24 scale die-cast car, some autographs with Playmates at the Aspen Marketing booth and more.

I managed to make it until I won this huge bear from the CUDL booth:

Walking around the exhibit hall with that huge bear got me a mixture of strange looks, smiles, queries as to how I was getting it home (I drove) and monetary offers but I was taking this home to my 5-year old daughter. (Man, was I a hero when I got home.) In the end, at about 2:30, I had to go back to my hotel room just to drop this off. I took a load off my feet and **BAM** I was out. I woke up right as former President George W. Bush was speaking. I was bummed to miss that.

I was invited to dinner with 3Birds Marketing that evening and we went to a delicious Thai restaurant. Afterwards, I needed to make a stop at the Caesars Palace Forum Shops. As the store closed its doors, they allowed someone in to shop privately. It happened to be Floyd Mayweather Jr.!! It was him and I, the store employees and his bodyguards (although I dont know why he needs bodyguards). Got to say “Hi” to him but I succeeded in restraining myself in asking for a picture with him.

After that, it was off to the Imperial Palace Karaoke Club. I typically visit at least once every time I’m in Vegas and it so happened that, earlier that day, Shaun Raines of DrivingSales tweeted out an impromptu industry karaoke party. Some of the 3Birds Marketing crew were there as were some ReachLocal people. It was a blast, as always. Rob Fontano KILLED the songs he sang. Dude even had a freakin’ harmonica in his pocket and played it during his songs. Are you kidding me?!?! I’ve NEVER seen someone whip out a harmonica during karaoke. Check it out:

Then, Shaun stepped up and did a duet with the DJ:

Great people. Good times.

To summarize, this NADA was the best experience I’ve had at a conference and the first major industry event in the last couple of years in which I wasn’t working in some way or another. Between all the celebrities, events, parties, swag, gifts from heaven, networking, and sessions…. I sincerely felt charmed the whole time. Thank you to NADA, God, the Lucky Charms leprechaun, and all those that made this convention so wonderful for me.

If you’d like to see some of the pictures I took (102 on display), you can view them HERE.

Oh, and remember that eBay Motors party I told you about in my Day Two Recap? I’ll leave you with some ice, ice, baby.