New and used car sales, survival of the fittest

i survived the credit crunch!
I was in an office with a very senior employee of a large dealer group the other day discussing our business and what the ‘state of play’ is and after the usual spiel which all motor trade people talk about i.e. volume, profitability, staff, finance, manufacturers etc. he made what I thought to be a very important statement. He gazed from his office at his forecourt full of gleaming new and used cars and exclaimed.
“They don’t make me money anymore; the workshop is the only place I can make a profit”

Now this is not a new phenomenon to me, as increasingly in modern times as you will have read about on MTI, dealers have to look at other income streams hence our articles on add-ons etc. But the difference here is that this director is now actively training his service advisors and technicians to up-sell servicing work, tyres and accessories, because this is becoming infinitely more profitable than selling cars.

The positive thing (if, as the press would have us believe, there really is anything for the motorist to be positive about) is that during previous economic downturns the industry has wheedled out staff who are not doing the job properly, staff are any companies best and worst asset and people who have a passion for their companies and customers will still be employed and indeed promoted if they can assist their business’s in these tough times in continue making a profit.

Every day it seems that dealer groups are under severe financial pressure and with cars de-valuing at an unprecedented rate modern dealers need to understand the value of having great staff to ensure that all their tried and trusted systems and processes which serve them well during good times are being strictly adhered to. Customer satisfaction surveys are being used as a major barometer on company performance., you only need to look at any motoring survey on this subject to know that strong brands with a large market share are generally the best performers, although there will always be exceptions to that rule. The winners as a result of this should be customers of course but also dealers with these KPIs in place.

For too long now a customer spending thousands of pounds on a car has often been treated as if they had just purchased 3 pairs of underpants for the price of one in Poundland! So it will be a relief for those people to know that these procedures are being upgraded and that the value of service will match the high value of the product. How many times have you come across these phrases ‘committed to customers’ or ‘your satisfaction is our aim” or ‘always endeavouring to deliver outstanding service to our loyal customers’ etc, fine words but how many companies and not just in the motor trade can really say that is what they are delivering? If the forums and advice columns are anything to go by still nowhere near enough!

The experience which a customer will receive going forward will ultimately improve, firstly with all the choice and manufacturers expanding their model ranges as well as cars being better built than at any time and coupled with global expectations on greener cars, the future of the car will still be strong, people will always want the independence of driving choices and with public transport issues never being resolved the challenge is this ‘To produce greener more efficient cars which are aesthetically pleasing, well put together, futuristically designed with a classic look, in a funky colour which goes really fast is safe and reliable and is fantastic value for money, oh and sold to you by an honest, knowledgeable trustworthy salesperson who rings you back when he says he will, under promises and over delivers a first class service and a great deal and gives you a top price for your trade-in, but can still make a profit for his company and earn a decent living for him and his family! Well no one said anything about it being easy did they?

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One Response to New and used car sales, survival of the fittest

  1. mARK rOBBINS October 5, 2008 at 7:16 pm #

    I found your site originally by mistake and now its seems like a sounding board for all my frustrations about the trade in general. Lets look at some of the very fair points you make about customer service within the industry.
    I would agree that occasionally customers who are spending often many thousands of pounds do get a raw deal as far as enthusiastic service is concerned, I would be lying if I didn’t admit that on more than one occasion I have done just that, worse still I have justified it! I have been a Sales Manager for a large well know brand, and have owned for many years my (not small) used car dealership. I believe there is a fundamental difference between selling New and Used, with New the customer is (hopefully) coming to look at a product that they have some (however small) preconception of, that product is in a purpose built, well lit, glass and marble floored environment, the product is new and unsoiled by previous owners, it reaches out to there very senses in all its glorious newness, the salespeople wear suits! all very conducive to a good salesperson doing their job correctly. (or should be)

    Used vehicles just don’t have that drama about them do they? oh sure, I have a nice glass showroom, albeit much smaller than most new dealerships, carpet instead of marble floors, and maybe my spotlights are a tad 1990’s but still my vehicles are all displayed well, write ups and full descriptions for the customer to read, all professionally valeted and waiting for there new owner………………… and waiting, and waiting, and waiting, in fact waiting so long nowadays that when a customer does walk in the door you would think you would be so happy as to practically give the car away. But no, with used, they prod, they poke, “has this really done 24,000 miles”? can I speak to the previous owner? “if only it was Automatic” Ive heard these haven’t got a very good reputation, I don’t really like Red, what time do you close? have you got a card? when you are subjected to this day after day, week after week, sometimes spending over an hour with a customer, is it any surprise that when that genuine “i want to buy a car” customer does come in you sometimes look at them as if they have just asked for three pairs of underpants for the price of one? Not right, but true!

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