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

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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

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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.

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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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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

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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.

amazon

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.

NADA 2012: Day One Recap

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Here I am at the National Automobile Dealers Association, yesterday was the first day of the conference. Registration opened at 10am and sessions didn’t start until around noon. I got to connect with a lot of people I hadn’t seen in awhile. It seemed like yesterday was just kind of a “catching up” day for vendors without booths while others were getting booths ready for today.

Today is the “real” kick-off in that the exhibit hall opens and the mass scramble for dealers’ attention begins. There will be more iPads given away in the next few days than I think the Apple store stocks. I’m looking forward to visiting and plan to take a lot of pictures.

It’s a big weekend here. On top of the convention, there is a UFC fight tonight (UFC 143: Diaz vs. Condit) and the SuperBowl. I think there are 37 Super Bowl parties tomorrow.

As a prologue, pre-NADA events have been great. I got to catch up with the VinSolutions team rockstars, hang out with Jeff Collins of Peters Chevrolet CJD, Dan Moore of SmartWebConcepts, Rob Fontano of 3BirdsMarketing. Ended up in a suite which, unbeknownst to me, eventually turned into a reception suite for Car-mercial (part of the DMSC) then transitioned to a fabulous dinner at Il Mulino courtesy of Scott Falcone (super smart and VERY passionate guy) and PrestoReviews, then on to the VinSolutions party afterwards.

Monday morning saw many in-real-life meetings with Twitter friends, industry friends and even some vendors I work with who I had never met, like Mike Fitzpatrick of DealerTrend. Ran into Grant Cardone. Caught Todd Smith (CEO of ActivEngage) session. He’s crazy brilliant. People were asking him questions well into the next session.

Eventually it was off to the Mandalay Bay for some non-conference, non-drinking, non… well, you get the point.. a break. Went to the weigh-ins for UFC 143 and then saw Joe Rogan doing stand-up. Met a TON of fighters (way cool) then called it an early night at 1am (yes, people, that’s an early night at ANY automotive convention but especially NADA).

Getting ready to begin Day 2 of NADA with coverage of the exhibit hall. It may, or may not, be live in the morning but it will be live eventually. Thanks for reading!

Who Is Tapping YOUR DMS?

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There is a lot of controversy in the automotive industry regarding which vendors are pulling data (customer or transactional) from a dealer’s DMS and then re-selling it to vendors like TrueCar and others. (I guarantee you that TrueCar is not the only vendor that’s using your data against you, FYI)

[Note: For non-automotive industry readers: DMS stands for Data Management System and is what contains all customer, financial, vehicle and transactional data (ie. all that information on the credit application you filled out when you bought that car). There are dealer vendors (website companies, 3rd party services like TrueCar.com, Edmunds.com, Cars.com, etc.) that are given access to this information for various reasons.]

Consumer privacy laws and red flag compliance keep getting stricter and stricter when it comes to customer personal information and how it needs to be protected. This is all well and good but I’d argue that most consumers don’t care about their personal information. They may say they do but actions speak louder than words.

An industry acquaintance shared a website yesterday that assists people in seeing, and cleaning up, which apps and websites are accessing your various social media accounts. (You can find it at http://mypermissions.org/ )

As I played around with it, there wasn’t much in there that surprised me but I’m also very diligent about which apps I allow to access my information and I periodically monitor them to remove permissions for apps or websites I no longer use. Even though I do that, there were a few in there that I was surprised to see. I guarantee you that a normal consumer has way more apps and websites accessing their personal information than I do – games, iPhone apps, websites with social media log-ins, plug-ins etc. Most require (or ask) to access your personal information to use their service. How convenient is it to use Facebook Connect? It’s super-easy but, every time you do, you are giving yet another website or app permission to access your personal information – essentially trading your information for convenience and/or the ability to utilize that particular website.

As I thought about this collection of different social media sites – Facebook, Twitter, G+, LinkedIn, etc. – it started to feel more and more to me like this was MY OWN PERSONAL DMS.

These accounts – singly and collectively – contain more personal information about me than any other source including the government.

Those social networks are free to use, but are they really? In one sense, they do exactly what your vendors are doing to your dealership’s DMS – selling your personal information for profit. Most consumers know this on some level and have chosen to allow that access in exchange for their information on some level. Sure, there are times when a consumer outcry occurs –  say when Facebook changes a privacy setting – but those quickly go away mostly because the consumer modifies the permissions again (ie. who can see your posts or other activity on Facebook).

So consumers do care about protecting their information, posts, etc. from people on an individual level, what they’re not shielding themselves from or thinking about is what companies are getting their personal data (either from the sites themselves or from outside apps and websites that they’ve allowed access) and what those companies are doing with it.

So, while we’re in an uproar about what vendors are getting access to customer data and what they are doing with it, keep in mind that you also have your own personal DMS and, just like you should care who has access to your customer’s information, you should care about who has access to your own.

David vs. Goliath – The Grant Cardone Saga Continues

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Throughout the day yesterday, via Twitter, e-mail and YouTube, Grant and I have been discussing why I believe his contest is bad and why he shouldn’t be teaching dealers inappropriate social media tactics. I think I explained myself clearly in my previous blog post and, in the interest of not writing a book here, I’m going to share the conversations, some select tweets, and his YouTube video which is without a doubt in response to our discussions.

[Note: These e-mails are unedited.]
From Grant to me:
Arnold, 

The
biggest thing I have spent my career on is inspiring sales people to do MORE not
do less. If a sales person is going to fail let them fail by doing too
much and then making adjustments to do too much a
better way.   

Your
suggestions about the program being wrong suggest to take action is incorrect
and causes people to be ‘careful’ rather than
to take action.  

The
world is filled with noise…..the only way people can break out is to take
action and lots of it.  You are going to love the 10X rule because it is about taking
action in massive amounts.  

George
Patton said, “a marginal plan executed ferociously is better than a well
thought out plan never executed.”

Encourage
people to make mistakes by taking more action not by labeling actions wrong,
incorrect, against the rules – There is enough of this
encouragement already.

Neither
you nor me or experts on social media….no one yet knows what actually works.
 Lets agree to disagree and both discover what does
work by experimenting…

 All
my love….

My reply to Grant:

So, in your opinion, violating Facebook’s Terms of Service as
well as the laws of the State of California (which have both civil and criminal
penalties) is ok?

 Even if we disregard the whole “spamming everyone” part of my
argument, you can’t seriously be saying its ok for dealers to break rules and
laws because taking “more action” is better than less?

The people that are participating in your contest are ALREADY
YOUR FANS, Grant. By making them spam their friends, you do not accomplish
increasing your exposure to new people. It’s great to have promotions and
contest. Get people involved and engaging with you, just don’t make them do it
at their friends’ expense and makes sure you’re doing it legally and in
compliance with the rules and laws that govern them.

His reply to me:

Dude,

 I am not ‘making’ anyone do anything and I am not
encouraging spamming.

I put together a contest to encourage people to learn while
they play.

Most of the people out there don’t even know how to start a
FB page… 

We have had over 20 people create video for the first time.
People are having fun with this thing and today now learning new ways to fine-target their message to clients so it is
not perceived negatively

Be a lover man, not a hater

Be an inspirer not a stopper.

Be an encouragement and supporter for action and
activity- 

Still love you…

My reply to Grant:

You have to take responsibility as a public figure and role
model for dealers, Grant. People look up to you and will follow your lead. I
hold you to a higher level of accountability to what you put out into the world
than I do the average dealer.

I’m not alone in my thoughts. Many people share my opinion on
your contest. I think the video part of your contest is great. You ARE making
them post on FB and Twitter about your contest. If they don’t they can’t win so
if they want to participate, they have to do it.

The fact that they don’t know, or have, proper social media
skills only makes it worse. You’re teaching them the wrong way to do things,
not the right way.

I still love you too. You’re still them man. You don’t know how
many people have messaged me kudos for standing up to you and saying most
people would be afraid to. I just tell them that you can handle it and,
hopefully, respect my opinion.

My job involves teaching dealers how to do it right. Your reach
and exposure certainly outweighs mine but that doesn’t mean I shouldn’t advise
people not to follow your example. That would be neglecting my job, and
responsibility, in bringing proper digital marketing techniques into their
dealerships.

His reply to me:

Right on bro=  but there is a difference between
standing up and making someone else wrong…

at this point it seems like you are more interested in making me wrong
….

Based on what you are suggesting the  social media campaign
I used to help NADA get the Brownback Amendment passed which protected auto dealerships from losing their finance depts. would have
violated the law.  I slammed that thing every way possible from FB, TWeets, Youtube to direct emails into unwanted and completely
disconnected fields…

Where did you get that great signature…

My reply to Grant:

No, your Brownback Amendment activity was a “rally” so to speak.
It was a call to action and information for dealers. YOU were doing the
“spamming” if people considered it that, which I didn’t.

This is a contest. The state of California has laws regarding
contests, it does not have laws about social media. FACEBOOK, on the other hand,
has rules about having contests on their website, which your contest does not
comply with.

I’m not interested in making you wrong. I KNOW you are. This is
not an opinion. I provided links to the laws and Facebook policies in my blog.
Feel free to read them for yourself.

Yes, you inspired my putting my signature image in my e-mails.
It was always my signature though. I didn’t make mine look like yours. You’ve
inspired me to do a lot of things. You’ve inspired me to be better at what I do
and helped me do that because I made a commitment to listen and learn.

I’m trying to HELP you understand that it’s important that you
teach the RIGHT way to do social media. Between you and I, we both know that
you’re great at teaching closing techniques to salespeople and motivating them.
We also both know that you’ve never sold a car via the internet and, in fact,
I’ve helped you with social media in the past.

I AM recognized as a thought-leader and expert in the field of
social media. That’s why I’m enlisted to do all of the social media for most of
the major auto conferences. They certainly don’t ask me to do it because I
don’t know how.

I know you’re a busy guy and probably don’t have time to go back
and forth with me. Ive always had your back and you know that. Ive contacted
you when your account was hacked. Ive shown you a lot of things. Just know that
I believe you needed to hear this and, hopefully, you’ll realize your mistake
and take action to change it.

Don’t make this a right vs. wrong thing. Don’t worry about
saving face. Just fix the problem.

As we tweeted back and forth today, a friend of mine, stated via Twitter that he was backing off because it was pissing his friends off. Here’s the conversation:


To even suggest to Stan that he shouldn’t be friends with someone (which he implies) who is advising him that he is going to alienate his friends by continuing his actions is not only irresponsible but it’s absolutely self-centered. I know for a fact that I am not the only one giving Stan this advice.
Why does Grant want to encourage Stan not to take my advice? The answer is simple:
He wants people promoting him no matter what the cost is to them!
Now we get to the YouTube part. [Note: This is my favorite.]

While he doesn’t mention me by name, it’s real tough for me to believe that this video wasn’t created in response to my calling him out and trying to make him realize that he is NOT helping his dealers. He is hurting them. Obviously, he doesn’t care. He’s more interested in self-promotion than on the social media success of his dealer audience.
Let’s examine some of his comments:
“..you’re learning what the difference between spam is and a good coordinated program.”
Yeah we’re learning that what YOU’RE doing is spamming. What you’re NOT showing us is a “good, coordinated program”. Running a contest via a software program called Contest Burner that is designed to spam people (for only $147). If you read their website, it describes Grant’s contest EXACTLY. It’s all about the following:
  • Flooding your site with massive traffic
  • Creating an army of back-links from all over the net
  • building a monstrous, responsive list
  • explode your revenue
Funny how there’s not ONE MENTION on that incredibly long home page telling you about RESPONSIBLE social media or that the program is designed to engage your fans and retain them. Of course not, it’s not designed to be responsible. This is what it accomplishes.
“With Contest Burner, your visitors will “happily” spread the word about your site all over the web. They’ll get engaged with your message… and become raving fans!

In fact, they’ll tell everyone about how great you (or your product) is and they’ll recruit people (influence them) to visit your site!”
Bravo, Grant. You’ve enlisted all of your fans to tell everyone they know how great you are while, at the same time, annoying the hell out of them.
Now let’s examine his logic and reasoning to his fans on his YouTube video:
  • You shouldn’t listen to their friends and colleagues but “push through the criticism”.
  • Social media is no different than him “knocking on a door”
  • “if you stop because people are asking you to stop, you’re done.”
  • If you’re creative, it’s not spam
  • Social media is no different than knocking on a door, making a phone call, or sending out a piece of mail, it’s just electronic.
  1. I don’t need to listen to my friends and colleagues. You’re the only thing that matters. Got it.
  2. It’s not like “knocking on doors”, it’s like knocking on your FRIEND’S DOORS. I’m sure your friends would appreciate you harassing them.
  3. Uh… when did “No” stop meaning “No”?
  4. Even if it’s creative, it’s still spam.
  5. You can be spam whether you’re knocking on a door, making a phone call, sending mail, sending e-mail or being on social media. In fact, there are laws regarding the use of 4 of the 5 of these and, I suspect, there will eventually be laws regarding the use of social media.
I’m sorry but anyone that tells me to annoy my friends and family, despite their requests to stop, and to “push through” anyways, is not doing me any favors.
The ONLY person winning from this contest is Grant Cardone. 
If you’re friends, family, and business connections are only worth $500 to you… well.. that says a lot.
[As I finished this post, I got another e-mail from Grant]

Dude  

All you have done is make
wrong – there is no direction, no guidance, and no teaching.

there have been no efforts to
do so either….

its been a constant
commercial of what I am doing wrong….then i expect you got some cowards
patting you on the back and got all inspired..
 but you didn’t help guide or inform anyone of what to do only encourage
them not to do!

My friends don’t do that with
me.  Teachers and mentors that I learn from encourage me to use my
strengths and

and never suggest that I do
less but offer advice how I can be more effective…

Go back and look at your
tweets and see how policeman like they are.  I am taking my time to tell
you this because I like you and would like you to be
supportive of me and what I am doing….

A better way to do this is by
example —– why don’t you get involved in the program and show them how to do
it or do you just monday morning quarterback?

My response to Grant:

Do you honestly believe that you are helping dealers learn anything
about social media?

His answer:

I
got a 100 from my brother with a message on it for you…

I responded with one word: nice
To be fair, he did respond with the following (despite the fact that I absolutely took the last e-mail seriously):

Just
loving you baby…  I have given you too much attention today…

but
it has been fun! Have a monster year and best to you..

I have nothing to gain by criticizing Grant’s contest except putting an end to the continuous stream of Grant-spam that I’ve been getting. He, on the other hand, has everything to gain by encouraging the continued participation of his contestants.
I absolutely feel like David and he is Goliath. Am I trying to “topple” him? No. Am I trying to get his attention and make him realize what he’s doing is wrong? Yes. 
The scariest part is.. maybe he already realizes it.

Oh, and Grant, if you want me to show you how to “do it right”, I’d be happy to.
Onto my commercial: Very soon, I may have a ton of Grant Cardone material available for bid on eBay including some signed photos, books and tons of audio material. 
Just kidding.. maybe.





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