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The Automotive Industry Needs More Trusted Advisers

NADA 2013 was a whirlwind. There was more activity, more excitement, and most importantly more hope than I’ve seen since 2008. Dealers were excited to see more, to learn how to go beyond the survival mode that has been fading in recent years and to concentrate on thriving mode. It was the most encouraged I’ve been about the industry in decade, but there was one thing that has me a little concerned.

It may be a minor blip on the corporate radars of the mega-vendors that are eating up chunks of the industry and it might go unnoticed by dealers who are so busy improving sales that they don’t even notice, but I was fortunate enough to take note during the show and after. What I saw was this: there is a distinct lack of trusted advisers and dealer partners in the industry. I know this because I had many more dealers finding me or calling and asking questions about other products and services than ever before. It wasn’t even close. This year, everyone’s looking and there aren’t enough people to go to for answers.

Here’s one conversation I had yesterday minutes after getting off the plane:

“Hey JD, what do you know about [video company]? Is it worth $[x,xxx] per month?”

I gave my opinion that it may be worth it if he was willing to work with them to maximize the effects. Then I asked him a question.

“Just out of curiosity, [dealer], why are you asking me about [video company]? I have an opinion for sure but there are others who know more on the topic than me.”

At this point, I had talked to somewhere around 30 dealers who wanted to know about product X or company Y. It was flattering, of course, but it’s not something that I’ve ever seen during and after other conferences. The dealer told me about the trusted advisers in the industry; more importantly, he described the lack of them. We’ve worked together for several years and he said I was his “go to guy” for internet marketing questions.

Again, I was flattered, but again I was alarmed. Have industry vendors distanced themselves so far from their clients that they don’t believe them as much anymore? Not to shine the spotlight on us, but it’s part of my company’s DNA to give advice, to help with everything that falls within our expertise even if we don’t sell it as a product, and to educate without an expectation of payment or returns. We run a minimum of two webinars per week at no charge with the intention of earning the trust of current and potential clients because we know that helping dealers will make us more successful. When did this become such a rare trait?

I explored further and was a little shocked to find out that nearly all of the dealers I called said that they didn’t consider their vendors as anything other than vendors. The partnership concept is gone. The trusted advisers of the automotive world have been pushed aside by the companies whose executives don’t talk to more than a handful of dealers per year.

This is not the right direction for the industry.

To the dealers who are reading this, now is the time to expect more. Demand more. We cannot allow the industry to be so numbers-driven that your vendors don’t even know your name or face if you aren’t running a 30-top. You deserve better than that.

To the vendors who are reading this, help us make the shift back to a more personal experience. Even with a good number of customers, we have more executives and digital advisers in dealerships at any given time than in the office. Shake hands. Reach out and talk to your clients. Visit them. It’s a competitive industry and we’re always up for the challenge of going head-to-head with others, but we cannot continuously beat each other up for the sake of the bottom line. This industry was built on handshakes and eye contact. Don’t get stuck in the office. Your clients deserve better than that.

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Tags: Automotive, Industry, Trusted Advisers

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Comment by J.D. Rucker on February 19, 2013 at 7:41pm

Ralph - yep, I'm with you on the vendor employees internal opinion. When I go to a restaurant I usually ask the server what they would recommend or if they think I should try the lamb or the ribeye. If they say, "they're both excellent," they lose (as do I). Everyone has an opinion and nobody does everything exactly right.

Gary - lunch was great, but I'm taking the expense out of our referral bonus agreement with you. Oh, wait, you don't have an agreement like that because you won't let other vendors grease your palms for recommendations. That, my friends, is why Gary is one of the true trusted advisers in the industry. His opinions and recommendations cannot be purchased.

James - thanks!

Cathy - that last part is hilarious and not too mean in my opinion. Thank you for the kind words and you're right - knowing a product is second only to understanding the needs of the potential client. Before getting on a call, even if it's only to discuss SEO, I research their area, their competitors, their inventory (yes, it makes a difference in SEO), and their rankings. My research before the call often lasts longer than the call itself and that's okay. I want to answer questions quickly but they have to be answered right or I won't be giving an answer at all.

Brian - exactly. There needs to be more internal trust between vendors and their clients and there definitely needs to be more engagement where unbiased experts weigh in on the needs of the dealers and the merits of the potential vendors.

Ralph - again, for the second comment, yes, yes, and yes. That's what needs to happen. More dealer-focused consultation, less profit-focused selling.

Comment by Ralph Paglia on February 19, 2013 at 6:51pm

I appreciate Brian's comment and would like to point out that the core principles behind JD's recommendations in the blog post above are very much in alignment with why I created ADM in the first place. By the very nature of any profit motivated venture, it will always be a challenge to find people on the inside of that organization who will speak, write and advise in a transparent manner with an objective of being a benefit to the same source of those profits, the dealer.  

Only when the supplier relationship acquires a "Partner Based" characteristic can there be true trust and transparency from both parties.  This is what happens when the supplier sees their profits as coming from the dealer's profitability rather than from increasing the dealer expense allocation towards that supplier, and being taken away from another supplier. When this happens, when the people on the supplier side truly perceive themselves as being in a business model that is driven by increased dealer profitability can this become the driving force.  

The simple explanation for the negative aspects of what JD refers to are that far too many sales professionals selling "solutions" to car dealers see their job as taking money from an existing dealer budget being spent on another supplier and shifting that budget to their product or solution in order to earn the sale. Too little GENUINE motivation comes from increasing the contribution margins to a dealer's operation, despite what is contained within marketing materials produced by the supplier. Too little understanding of the dealer's business model with too much focus on the supplier's business requirements results in a one sided perspective on the part of those representing suppliers and meeting with dealers. 

Comment by Brian Pasch on February 19, 2013 at 5:51pm

Great conversation.  So many places to add some color commentary.

Gary, I too am frustrated at times when building a great relationship with a dealer, that is also generating great results, to get the call that they are canceling my service because their OEM now has co-op funds available, and I was not on the short list.

The odd thing is that the change is made with no guarantee or knowledge that the OEM recommended supplier will do a better job.  The sole focus it seems is on out of pocket costs.  Dealers lured in by OEM co-op funds have decided not to focus on lost opportunity, true ROI, or the benefits of a boutique solution that is not part of a one-size-fits-all package. 

JD, we share a passion for educating dealers.  This in effect draws people to us that are seeking advice.  It shows that dealers are reading our work and respect your insights.

Ralph Paglia has really not been fully recognized for building a community of real educators.  ADM is a great place to share ideas, recognize new vendor solutions, and assist dealers in making the right decisions for their business.   It takes a significant investment in time each week to be an online educator.  I write about 3-4 articles a week and JD you are even more prolific!  

Another factor creating a smaller list of trusted advisors is turnover in our industry. How long do sales professionals or account advisors stay at vendor companies?  Not very long.  

There are few independent consultants compared to the larger sales organizations. Gary we are in the minority of companies that can recommend ANY product that will work for a dealer, without worrying about commissions.  

Gary, yes, dealers rarely bring us in during purchasing decisions or vendor interviews.  From my experience, when I have been at the table, the dealer has received a better deal and develops a better implementation plan that can save thousands more in human resource costs. My presence has also avoided false claims to be accepted as fact, and used to close the sale.  

I do see changes coming as new dealership leaders emerge that are more open to consultative processes and third party advice.  I've been pleasantly surprised at how many people how come up to me at DMSC or NADA stating that they have been reading my article for years.   They are educating themselves and getting much smarter. 

There is a silent audience out there that is appreciating the ADM educators and those on other great sites like DealerRefresh.com, DealerElite.net, and DrivingSales.com.    So, there might not be many Trusted Advisors, but we do have a concentration of them here on ADM. 

Comment by Cathy Nesbit on February 19, 2013 at 1:04pm

I too, 9 times of 10, feel like I'm being "sold" when I'm talking to a vendor. When I feel like I'm being "sold" on something I don't feel more trusting of that person. I feel much more skeptical. Especially when they are less knowledgeable about the product than I am. If I study your product for 5 minutes after reading an article about it, then a sales guy calls me who knows less than I do about the product-that's pretty lame. There is an abundance, worth repeating, abundance of vendors, trainers, reps who know little to nothing about what they are teaching, talking about or trying to sell. It's pitiful really.

There are some who are represented here as Tk Carsites, KPA with JD (and Erin) who do a great job. There are others too...Grant Cardone's folks, my Cobalt Advocate is great and I do have a relationship with her. If she doesn't know something she will say. I don't know, but I'll find out. That's all I want. I don't want some one calling or emailing to "get 20 min of my time" when they don't care to study my company before they contact me & yet didn't have the time to learn their business either. My boss had someone call her out of the blue in Dec. when she said have you looked at our site & got an idea of what you believe our specific needs are? He literally responded, "I have hundreds of calls to make, I don't have time to look at your website." Thank you and good night!

Also, as horrible as this sounds...when someone tries to sell me via email & I kindly respond with "I really don't have budget for that and it's just a waste of your time to try to sell me on it"...and that person continues to email me "the pitch"...I do start messing with them a little bit. Last week I sent someone his own picture and told him I didn't think we were going to be able to be friends because I was being honest with him & he was not taking my word. That may have been a bit much (and a little mean)..he probably thinks I'm crazy now. :) I thought it was hilarious.

Comment by James Easter on February 19, 2013 at 12:54pm
That's a great post 4 sure...good stuff as always from JD! Thanks.
Comment by Gary May on February 19, 2013 at 12:43pm

JD, great post. While, selfishly, you have my complete agreement (and I posted a somewhat "related" post on my blog a couple days ago) there won't be any real movement until OEMs and dealers actually do business differently. Blind recommendations by the manufacturers on vendors, mediocre services being marketed as great, relationships being valued more than honest supplier evaluations and the like are still running rapidly over common sense.

Considering how progressive we are as an industry (if not tops out of all the major verticals less technology), by franchise we aren't close to where we need to be. Some of the reasons your opinion is so important to dealers is trusting you, knowing you (at a minimum virtually), seeing your posts and advice as well as that the fact that you do look into many segments and providers.

The one thing that must happen more is dealers inviting people in (or at least phone calls) to visit and discuss the proper way to make changes and improvements to their strategies and execution. If you eliminate sales reps, resellers, consultants who take commissions from vendors and the like, there are truly very few sources that dealers can do to in order to receive truly unbiased recommendations.

"Trusted Advisors" is a great term. To be blunt, give me even 20 vendors/suppliers in the industry that would gladly bring in an IM@CS, DealerKnows, Kain Automotive, Mosley Automotive or similar companies to be part of a presentation or assessment, then show me 1,000 dealers that think about that first before signing a contract. It doesn't happen enough. A couple of the first questions from an OEM purchasing department is "what is your revenue right now and how many people work for you?". WRONG QUESTIONS!!!

Then dealers go from vendor to vendor to vendor without knowing why, ever benchmarking performance, understanding their metrics or taking the time to investigate properly. No, instead 20 Groups, pitches, NADA workshops and marketing-based influence determine which video company a dealer signs, per your example.

As to your "this is not the right direction for the industry" reference, we can't avoid it. Companies that are ripe for the picking are being bought by the "Big Four" so there will be, for the short term (2-3 years), fewer companies to recommend in the first place. And dealers, stop using the "I can write one check instead of 10" excuse to making vendor decisions based on the motherships. Good decisions aren't made in vacuums.

Not only has everything we've done in the past five and a half years been toward the goal of being a "trusted advisor" to the industry, it can be validated by hundreds of dealerships. That could sound like or be taken as ego, but fact is we're not a blip on the radar of most OEMs, vendors or dealers because that makes us incredibly, incredibly small.

Look at the LARGE mistakes that over half of the OEMs have made in the last year with digital strategies, website vendors, social media vendors and consultants (naming only some categories) but don't cancel or change direction even though they know that their decision was extremely poor. "Trusted Advisor"? Break down the bullshit walls, purchasing decisions, protected relationships and more...then maybe, just maybe, can that term even be viable.

Until then, I'll blog, speak, consult and advise to the best of my and company's capability. Again, great post, thank you for lunch and our chat in Orlando. Until next time...

Gary May

IM@CS

Comment by Chris Lottman on February 19, 2013 at 11:50am

It seems like, with the vendors that I've crossed, is that it is more important for the SALE than just the conversation of why I should do this or that. After doing a lot of research into whatever I'm doing, the last thing I want to hear from a vendor is the basic, elementary information they provide.

Hmmm... might be my calling :D

Comment by Ralph Paglia on February 19, 2013 at 11:40am

JD... Thank you for such a thoughtful and significantly important post. You are right about the way "Trust" is earned by suppliers, and I would like to suggest another characteristic that we need to see more of from the supplier segment of the auto industry; "self criticism". Until we can get rid of the epidemic of mutual admiration within the various departments and teams at the supplier level, it will be difficult for trusted advisers to exist within those same companies.

I have personally found myself in many situations where my own suggestions for product improvements have been received as some sort of heresy and evidence of being a traitor to the company... of somehow not being a team player or aware of where my paycheck was coming from.  Healthy and logical self assessment and being able to honestly discuss a solution's strengths and weaknesses is essential to a supplier earning the trust of its customers... In any industry.

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