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The Extinction of the Old School Car Dealer

It’s not a theory, it’s not even the future, it’s happening now and time is getting short. Auto dealerships are notoriously late adopters of any new technology but in our current state of rapid technological advancement more and more dealerships are falling by the way side and closing their doors. While many different theories can by hypothesized as to the reasoning behind this I’d like to bring forth the idea of Digital Darwinism.


“The idea that the development of Internet based companies is governed by rules similar to Darwin's theory of evolution, and that those that adapt best to their environment will be the most successful”

We are in the midst of a huge economical shift, consumers aren't as trusting as they use to be, we live in a world of digital transparency, but still dealers want to hold onto the old way of doing things, just because it's the way it's always been done. It's that very same thinking that is causing dealerships, all across the country, to close their doors for good. Sure, they put up a good fight, blaming everything and everybody, except themselves that is. (Grant Cardones Video)


For those of you that were in the car business when the internet first rolled around you know first hand how dealers resisted the change. They fought it saying that people wont go on the internet and interact with a dealer through their website. They insisted that print ads would always reign supreme and lot traffic would never dry up. If you could go back, knowing what you know now, what would you tell them?


Right now, this very second, we are in another shift, its a little different but still it's technology based. More or less, we are going back to the way things use to be before the internet. If you haven't guess it yet, I'm talking about social media, and all social media is is a new way to use an old tool. That old business tool is networking and things are going back to the village mindset (thank you Jack Perry).


What do I mean by that? Well, before the the internet, actually technology in general, we use to consult our neighbors, friends, and family members about things going on in our lives. Now we have the internet and and can Google just about anything, but before the modern marvel of online search we use to have community meetings, one-on-one discussions, and asked for each others opinions. Like they say, history repeats itself and now the internet, through social platforms such as Facebook, Myspace and Twitter, are bringing us, once again, closer together.


Why then, are all these positive changes causing dealers, once again, to want to discount whats really going on? Digital Darwinism is alive and well and it's just a matter of time before the old school car dealers become extinct, they want to fight the fact that the customer is in charge of the process. Instead of fighting them it's the progressive dealer that's able to relinquish control and starts to think in terms of "how can I make this new way of doing things work for?"


In reality, this goes much deeper than the onset of social media, this happened a long time ago and will take a tremendous shift in an old car dogs thinking to really get it. We are in a relationship economy, no longer can dealership afford to put the sale before the customer, it's time to put the customer before the sale. Their needs come before money, it's a fundamental shift in thinking that will propel a dealership to new heights and will allow them to take market share like never before.


Embrace the changes my friend, don't fight it. Don't try to stuff a customer in a vehicle because that's all you've got, find something that the customer both needs and WANTS, even if it's at another dealership. Honestly, I feel that if an auto dealer is against what I proposed in the last sentence then a time will come when they are either filing for chapter 7 or selling out to somebody that gets it.


Embrace It.

Views: 140

Tags: social media

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Comment by Jay on March 2, 2010 at 6:59pm
David, Once again a great thought and idea. Lets have everyone post names of the dealers that are leading their industry with social networks and marketing ideas.
Comment by David Johnson on March 2, 2010 at 6:49pm
Glad to hear it! I neglected to mention the dealership, it's Richards Honda. I'd like to invite others to mention dealers, that they may or may not be working with, that get it.
Comment by Jay on March 2, 2010 at 6:46pm
I'm also glad to report that we have just signed up 2 more dealers just today that get it. Danny Zeck Ford Lincoln Mercury in Levenworth KA. and Sport Mazda Orlando FL. They are signing up everyone in their stores and I mean everyone, salespeople, service writers, parts and even body shop people in dealerMouth. Now their entire dealership will have the means, old or young to network and market themselves in blogs, facebook, Twitter and all other forms of social networks. Its so exciting to hear you guys write about the changes that we know are coming and all the great dealers with the vision to see them through. GREAT posts guys Thanks
Comment by David Johnson on March 2, 2010 at 6:18pm
I'm glad you liked it! I think something big has to happen for this shift to take place but I think it can and it will. In fact I'm just leaving (well, in the AM) a dealership in Baton Rouge that gets it. There are some pretty exiting things coming down the pipeline and when its all in place I'll write more about it, but for now I have to keep it hush hush! LOL

Thank you for the comment!
Comment by Keith Shetterly on March 2, 2010 at 1:59pm
I very much like your post!! Well done. I think most of the "evils of car buying" come from the negotiation aspect--negotiation is a wrestling match of agendas, where the muscle is information. Dealerships/salespeople and customers withhold information, twist information, give bad information, etc. trying for an advantage in the sale.

The other side is when the older salesmanship fails to impress an Internet customer. They have researched, and are sometimes "price locked", so it is an uphill battle to present the value proposition ("walk around") of the product. Nearly no other large retail purchase has as much written about "how to handle a salesperon as a buyer" as vehicle sales. And most of it is online!

The information-based negotiation legacy of the horse-trading days has run into the Internet--the largest encyclopedia, newspaper, billboard, cash register, AND source of misinformation in human history--and, as Pogo put it, "We has met the enemy, and he is US!".
Comment by David Johnson on February 28, 2010 at 10:27pm
This was left on Facebook as a comment to this post. It is unedited and directly from a car buying customer. What do you think?


Here is my view on this:
yes its true i am not IN the industry of car sales and dealerships. but i can tell you the truth as seen from the buyers eyes. by the way the buyer is who will be determining when this downward spiral for dealers is over, not the insiders.

my view is that it doesnt matter what dealers do to "catch up" to the modern world. they arent gonna get anywhere until they start being honest. some examples:
... See More
1 when a car has an msrp of 40k, it sells for 40k, not 65k. (beckford ford i'm looking at you... no wait you are gone)

2 when you send out flyers or brochures for your 'sale' event and it shows a prize that you can get for coming in... give the actual prize that is pictured. not show a nice gas grill and then you give away that fold out paper grill. and dont show us the same cars you had last week with the same prices as last week and say "last week this car was 5k more than this". also, people LOATHE when you bring in out of town "crews" to handle your big sales. we know that your little dealership doesnt actually have 15 or 20 salesmen. and we know that the out of town guys are not really going to care if we come back angry next week because they lied to us to get the sale. trying to blend them in is a scam. and we know they are told to not come right out and say they are out of towners who were brought in just for your sale. go the other route, make them wear a badge of some kind stating they are from out of town. your actual employed salesmen will appreciate the leg up. also, your customers will appreciate the honesty. and if they are such superstar salesmen they should be able to "overcome" any objection about them being pikies. (wiki it. they are pikies)

3. stop taking advantage of people who are excited for this big day of buying a car. its just another work day to you, so you are thinking a little more calmly than your customer. so its not outsmarting, its tricking. if they come in and say "i
want a red focus". dont start selling them on a red mustang. they may have been dreaming of that red focus for months, now in their excitement you've shown them this much higher level vehicle... of course they are gonna be sold on it... that is not a skill you have, the car made the sale not you. and its not a good sale. that customer is gonna be pretty angry later when they realize they dont have the extra wet weather handling of a f.w.d. or whatever little features they wanted that the mustang doesnt have.

4. stop telling everyone that all the miles on the cars are from nice little test drives. we know the employees and out of town salesmen are driving them around. and they are treating them like rentals. smoking in them, eating in them, fast take offs and hard stops. thats bullcrap. you guys should have your own cars anyway... oh wait you cant find a salesman you would be willing to buy one from can you?

5. stop doctoring the paperwork. if i go look at a jeep grand cherokee for my wife and its a 2 wheel drive, i dont wanna see 4 wheel drive written on that paperwork. i'm glad i knew so much more than the salesman and manager who tried to lie to me. "oh i know you dont see anything inside that says 4 wheel, thats cuz its all automatic. you dont shift into 4 wheel drive on this one"... "oh okay mr mcvay can you show me the front differential, that would drive the front axles?? or just show me the front axles??? or is this the model that runs on magic?? shred that paper while i watch you, then have a nice day" (mcvay motors)

6. dont let people refer customers to you on the grounds that "these guys are my friends, they will hook you up". then a couple days after buying a car your friend says "man, they said you jumped right on the first price. whats up with that?"
not cool at all. of course i did, they were supposedly your friends. was i supposed to go in there and start an arguement with your 'friends'? why are they screwing your other friends? (i'm flipping you the bird tamuron honda and the fat 4 eyed guy behind the finance desk.) everyone also be warned of the ethics at work at tamuron honda. to go and brag to a 3rd party person, who obviously knows me, about how they GOT ME on the price. i hope we meet again finance manager.

7. stop the haggling. just put your lowest price on the car. stop putting a fictitious price with a 4,000 dollar mark up on the windshield and then slowly slowly slowly go down on the price until you get to the actual price. just mark it and let it go. "well people like to feel like they are getting a deal". wrong. liar. people like to KNOW they are getting a deal. which they will when they go down the road and see the prices on the OTHER dealers windshield who is still showing the 4k fake mark up... or when they check online and see what is a good deal for that car and its the same price you had marked.

8. stop switching the co-signer with the buyer. it took me 4 days to buy a car a few years ago. i was the buyer, i had a cosigner. they said they could do it. but everytime we show up to sign... my name is the cosigner and they other is the primary. NO. i'm not retarded. i aint signing it, here is your car back, thanks for letting me drive it all day and night... go tell everyone that was just a few test drive miles. (first choice auto sales)

9. why not talk to everyone equally. you never know who is ready to buy. even a young, obviously non-rich couple who act ignorant to the whole process. my wife and i went to frontier motors again a couple of years ago and asked to look at some cheap cars. the guy asked us our credit scores and incomes.. nothing more... and said i'm sorry you cant really get anything here. he wouldnt even show us a used malibu that was asking like 8k. 2 days later i flipped him off from my acura mdx. shouldve talked to me you moron. how are you still in business? (frontier motors)

10. ever notice that its really really hard to get someone in the door off of craigslist? people HATE that. we are looking for cars at less that book value, usually that we are not only willing to work on, but want to fix up ourselves. but its almost impossible to do this anymore because YOU GUYS have ruined craigslist. its all 1 big dealership ad now. at talk about rip off prices. PLEASE at least look up other peoples posts of the same make and model and then match that price. we know you had your 16 year old "detail tech" clean it up, and your flunkie mechanic do all needed repairs. but as i said we dont care. we didnt want you to do any of that. cuz even if we buy a used car from you, we are still gonna give the engine and drivetrain and once over with our mechanic anyway. and a $4 touchless car wash does just as good of a job as your detail kid. but in general we are on craigslist because we dont want to deal with you. and we know its you when we call and your secretary answers or when you give the address to come look at it. come on. you try to hide the fact that youre a dealer in your ad, but you suck at it. get off craigslist!!! you already ruined ebay motors.

11. we wish a salesman would answer the phone and then do their job and answer our questions. it sucks to call a car lot JUST wanting to know how much that dodge ram was that you saw as you drove home, and then a receptionist answers and asks what department you want. you are a car lot, i am probably calling about a car. so she puts you on hold for a while then a salesperson gets on the line and asks what you want all over again. then when you tell that kid what you want. they always say "let me look into that and give you a call back. whats your name and number". ugh. NO. just give me an answer. jesus christ, i'll even hold while you go look if you really dont know. or tell ya what, how bout you go look and then i'll call back in 5 minutes and ask for you. i dont want you to call me back and hassle me. if i wanted to be "sold" on some crap then i wouldve stopped by wouldnt i.

12. the dumbest of all. the acting. its dumb enough that some dealers actually train their wanna-be salesmen to use body language, (i dont care that your shoulders are slightly slumped and your eyes are down to show submissiveness when talking price. i dont care that you suddenly smile and make eye contact and used open handed gestures when talking... See More features.. i only care about what exactly you are saying) but to do full blown acting is bad. the whole thing with negotiations where you have to get approvals on every offer from your manager or finance guy is played out. you arent talking to anyone half the time and the other half you are just bragging to him about how you "have this deal wrapped up". we know that you know how much is invested in each car. so you know the bottom line already. and you know the dealerships payout levels on most trade ins too. just tell me yes or no and lets move on.
Comment by David Johnson on February 28, 2010 at 6:17pm
Thank you for the comment Jay!
Comment by Jay on February 28, 2010 at 1:50pm
embrace, = (a close affectionate and protective acceptance) "his willing embrace of new ideas"; Nice post David, as always

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