Why Warren Buffett Is NOT Wrong on Car-Dealer Model
Why Warren Buffett Is NOT Wrong on Car-Dealer Model
Survive and Advance. Selling Cars in a Digital World.April 22nd, 2015 by MAXdigital
Today we find experts writing articles about the auto industry that have only set foot in a dealership a few times or may have never even purchased a vehicle. While most of these articles are well intentioned and help create a healthy discourse; many just try to prove a specific position for the writer or the company commissioning the tome. Many are hypothetical at best. Recently Accenture released a study conducted by Coleman Parkes; 10,000 automobile owners were surveyed in eight countries: Brazil, China, France, Germany, India, Italy, Japan and the United States. I find most of this particular article interesting and thought provoking. I believe as we examine the article; that we can get much insight from the article. The part that can lead to much worry and concern; is at best far down the road for any appreciable percentages and at worst almost like shouting fire in a theater. (The survey also showed that 75 percent of drivers polled would consider working through the entire car-buying process online.) The business of business plays out on many levels. The primary issue is SURVIVE AND ADVANCE*. In retail and especially with high capital requirement businesses you have to meet payroll every month. This requires doing the right things in all facets of the business. The owner/decision maker has to be very careful matching the here and now with proven practices. They have to be willing to make some risky but necessary adoptions of new and innovative ideas. The tough part is not buying some one’s opinion as an actual BEST PRACTICE. You have to match the here and now with changes, issues and opportunities that come up. The article states 80 percent of drivers in the market for a new vehicle are using some form of digital technology to research before purchasing, while almost two-thirds (62 percent) are beginning the car-buying process online. I do not doubt these numbers and they could be even higher in some areas or for preowned purchases. Just think about you friends, popular culture, your family and even yourself. It is so easy to look things up on line. Why would anyone not take advantage of the wealth of information that is available? The writer states that the digital customer has made things disruptive. We have found that the impact is a better educated customer, one that has done their homework. Just like in school some people do a better job of doing their homework. Teachers generally find those students are a pleasure to teach and work with. A well-educated customer when aligned with well-informed product experts that have the tools to make a transaction go smoothly; is a win for all. Time for all is more efficiently used, customer satisfaction and employee satisfaction is much higher. The customer gets what they need at a fair price and the company can make a fair margin. The digital market place has had a tendency to be little more than the old Pay for Play; MAD MEN type advertisements. “Carpet mats so clean you could eat off of them.” Long lists of abbreviations, artificial hooks, read the fine print, more is better and just lots of hype. Customers have proven and the study restates they are looking honest and provable information. They look at social media not for thinly veiled ads but for peers opinions. They look at numerous sites, they ask questions. When they get to your site are you ads short, concise and do you back up with proof? Accenture’s study really proves what we have said for a long time; make sure you use actual facts that can be proven. Give the customer a reason to see that you are supplying what they are wanting; not only the vehicle but the information and evidence. The survey also showed that 75 percent of drivers polled would consider working through the entire car-buying process online. The two key words are DRIVERS and CONSIDER. Were these actual drivers or people that were thinking about purchasing a car but never have? Consider is much different than actually doing. Was there a trade involved? Was this purchase for a new or used vehicle? What was the age and purchase price point for the vehicle? An automobile is much more complex than the purchase of a smart phone or article of clothing. The digital age can smooth out the process and speed up the process. However, there are many reasons that a customer will want and need to go to a Brick and Mortar business for the final transaction. The factories, the public companies, the retailers all are investing more and more money on facilities to meet the demand. They must also invest in creating product experts with the right tools to make this process more efficient and palatable. Could there be transactions only on the internet? Of course there could be and will be. However, for the foreseeable future it is still a one on one transaction at the dealership. Invest in being able to do this the best way possible. Survive and advance, Just like Coach V in 1983; If you do that you will be around for the great future frontier and win along the way.