Monday, February 13, 2012

Can the Automotive Industry Repair the Online Consumer Experience?

Can the Automotive Industry Repair the Online Consumer Experience?
Written By David Andrew, aka “The Professor”

Core Issues:

1. The manufacturer destination site in many ways restricts Dealerships and Consumers to designated market areas.

2. Some OEM sites require the consumer to enter zip code prior to relieving desired information, then redirect the consumer to the Dealer assigned to the market area, regardless of the consumer's choice of Dealer.

3. Some manufacturer site encourages the consumer in many ways to competitively shop other Dealers, placing downward pressure on price.

The Internet by nature levels the playing field. It's like a Coke it tastes just as good no matter how rich or poor you are; the identical concept holds true for online markets. It does not matter how big your dealerships are or how small. It only matters how you choose to engage the consumer through the medium it’s the great equalizer that allows a little family-owned and operated store surrounded by trees and water to perform at the equivalent level as competitors in metropolitan areas.

The “manufacturer-preferred site” term is also Red Herring the inference is that manufacturer's sites or site providers have the ability to provide special discounts over and above the dealerships normal pricing. This is simply not true,

  • The manufacturer chooses the vendor that will provide sites to the Dealer Body.
  • The website provider rolls out a beautiful presentation of their full potential for the manufacturer, the manufacturer then leverages their buying power to negotiate an affordable deal. The Website provider pulls together a lesser package of basic services based on the final agreed-upon price and then attempts to up sell the Dealers. This where the primary point of contention begins. The Dealer / Manufacturer website should absolutely be “Best in Class” but never is.
  • The manufacturer site circumvents the Dealer relationship by offering pertinent ownership specific information throughout the ownership cycle directly to the consumer.

If the OEM wants to sell more cars, realize higher profit margins, and become brand domination by controlling a larger piece of the consumer experience, (without dismantling the Dealer Body), they should do this:

  • If OEM wants to help dealers establish Owner Loyalty, then "consumer specific" "needs targeted marketing" should be provided at the dealership level and “perceived” as so by the consumer.  
  • To ensure brand loyalty to the manufacturer provide consumers the ability to move ownership cycle data to another Dealership or track "servicing dealer history" and move data to the Dealer, whom is getting the customers vote through patronage.
  • To maintain more consistent Brand Experience hold Dealers too more stringent standards.
    Provide all third party website providers with the ability to interface with the OEM manufacturer's database. This way, all vendors and dealers have the awesome features that benefit the consumer most. Everyone wins most importantly the consumer. 
  • OEM provided tools include centralized databases of products, available services, and are targeted to ownership cycle of individual. Including:

  1.  Vehicle Build Pricing and locate features.
  2. Accurate OEM Incentive info, including rates, residuals, lease pricing,
  3. Integrated DMS Service Scheduling,
  4. Access to membership rewards programs and points,
  5. Up to service history
  6. Up to date integrated national service campaigns,
  7. Vin specific targeted service specials,
  8.  Full line parts catalog, parts locators, parts ordering,
  9. Online OEM Credit financing integration. 

  • In the online space do not provide pricing and inventory at the OEM base site in the way they do now, redirect shoppers to their chosen dealer's site for that information and allow them to browse all types of inventory from a national centralized inventory database (not individual Dealership inventory), post an estimated delivery time, and cost of good’s to dealership of choice.
  • On OEM, sites allow customers to search for Dealership of choice by Dealership Name or provide multiple Dealership listing by a predetermined zip code radius (50miles)
  • Once in the chosen dealer's site, stop the return navigation or at least bring them back to OEM home page not back to the Dealership listing, this way its more difficult for consumer to place multiple quote request for the identical vehicle in a matter of seconds. The idea is to stop pitting dealer against Dealer or trying to segment dealer geographical territories in the identical way as they are set up on a map. That’s not how the Internet or the new market economy works. It’s a losing strategy for Dealerships, because in centralizes the focus on price, not quality of product and service.

If the OEM were to make these changes alone, Dealers could be more profitable because they would not be in a constant cycle of negotiation, OEM’s would sell more products and services because all products would be available to the consumer. The consumer wins because they have access to the right product from the Dealership, he or she desires to do business with. The consumer also wins because now the determining factor for doing business with the Dealership is the consumer experience the Dealer creates. 

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