Sunday, February 12, 2012

The erosion of consumer value to automotive dealerships

The erosion of consumer value to automotive dealerships by David Pritchard

When we first entered the Car business ten years ago we tried to make every transaction . One day we had a client who was not happy about anything no matter what we did. The owner stepped in and tossed the client out. I was  shocked ! He explained to us that some transactions just were not worth making because that client would never be happy and would only trash our reputation every time an issue arose.

I did not really understand it at the time, but now I do. In the same way that you attempt to create value for the consumer it seems that a growing number of consumers are beginning to have less value to businesses. The story of consumer power is being told from a one dimensional perspective , and no one is telling the customer that business is for profit. That’s not a bad thing. It allows business to contribute back to society.

Here at we are guilty of it ourselves (in our past dealings with vendors) of ‘brow beating’ the salesperson to a zero profit and in return getting ‘nothing service’. We are fortunate that our use of these products is beginning to carry a certain amount of endorsement value, or our success would have been limited early on. Today the challenge at every level of the consumer experience is to create "value" for quality of service into our pricing structures . We have to understand and exploit the difference between shopping, for example, at Wal-Mart or Nordstrom’s, or buying a Dell or an Apple, or even dining at a McDonalds versus a Ruth Chris,. We have to make sure the customer fully understands, sees, and feels the difference. Leave consumers to choose what level they want to pay for….

Is it really about the best price? Apple has proven the answer is resoundingly NO! Their products are consistently priced higher than those of their competitors, and yet they have dominated the market space even during the reportedly most challenging economic times since the depression. When others were slashing prices and liquidating inventory Apple was fearlessly launching great new products. Ford Motor Company is another great example of a corporation, which gets it. Their drive to build great products and fearless embrace of social media has given them the ability to by pass the media. Our goal is to help Car Dealers the and the automotive industry as a whole create the same type of dynamic brand energy that Ford, Apple, and other great brands are experiencing. The hope is a mutually beneficial relationship through conversations will bridge the widening gap between consumer expectation and consumer value.

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