Three or four years ago a dealer mentioned to me that the dealer brand was as important as the manufacturer. At first I thought that was case of imagining things, but as the automobile buying climate has changed with the economic downturn, I find myself agreeing, more and more, on that issue.
Even in a down economy, Americans still need and are still buying new cars. The fact that General Motors, which needed government assistance to stay alive two years ago, posted a third quarter profit of $2 billion is ample evidence.
One result of the recession is that consumers are more value and quality-conscious than they’ve been in years. For example, in a recent survey for CarMax, consumers responded that quality is the most important factor in purchasing a car, followed by price and safety, with environmental factors and resale value distantly behind.
Several years ago, American car quality was thought to lag behind European and Japanese brands. American manufacturers stepped up the quality of their products and in this year’s J.D. Powers Initial Quality Survey of 82,000 consumers who bought or leased new cars, American-based brands as a whole earned higher initial quality scores than those of international name-plate brands.
The Internet has made shopping for price much easier. Buyers for whom price is the paramount concern can make comparisons among dealers and online sellers. It’s also easier to get information about safety and the window sticker lets buyers know about a big environmental concern, fuel efficiency. But when buyers have researched and weighed all of these issues, there’s still more to the car-buying experience, and that’s where dealer brand comes in.
Dealers who have been in the marketplace for a long time have a built-in advantage simply because they have name recognition. Perhaps your father, or even his father, bought a car from a long-standing dealership. It establishes a comfort level and a feeling of reliability that will at least make you think about patronizing that dealer again. Often, dealers who have been successful over a number of years have spent a lot of effort in managing their reputation – their dealer brand.
Influencing how people feel about their experience is the new battleground in the automotive industry, which is why dealers are working harder than ever to maintain their reputation. Consumers want to know that they’re going to be treated well once they come in the door, and even better once they’ve bought a vehicle. A recent study by Bain & Co. showed that the best opportunity to improve short-term business performance comes from focusing on existing customers. This comes in the form of providing superior after-sale service, excellent communication and community involvement.
It’s a rule of thumb in retailing that people who have a good experience will inform five or six others, while those who are dissatisfied are likely to inform up to 11. The Internet has amplified this phenomenon with social networks like Facebook and Twitter, blogs and various automotive consumer sites that solicit reviews.
More than ever, automobile dealers are stepping up their efforts to polish their brands by keeping customers satisfied so they will offer positive comments and bring their business back again and again.