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Shortly after I began writing this post, an article popped up on my Google Alerts about another dealer group, accused of deceptive marketing by their state attorney general’s office, having to pony up a six-figure settlement. Not surprising at all, I’m used to seeing these types of articles on a regular basis. Another day, another enforcement action against a car dealer.

In this case, the dealerships were accused of “having advertisements online and in print publications that misrepresented the actual prices of automobiles”, “dealership employees asking consumers to sign incomplete documents with the understanding that they would be completed using the negotiated vehicle price, but later entering a higher price”, and “allegedly charging consumers fees for unwanted or undisclosed warranties and services”. According to the article, the auto group denied any wrongdoing but agreed to the settlement.

But I digress. The above story really isn’t the point of this post, nor is it my intention to try to warn you of the legal dangers of non-compliance with the laws of the land. I, and my peers, write enough about that. Sure, I’m now a compliance consultant, but my ramblings here are based on the things I learned during my 20 plus years in automotive retail - and the realization that I probably had it all wrong.

This post is about Transparency. It’s about the Big Picture. It’s about opening your mind and stopping to think about the absurdity of old school tactics. Not from a legal or ethical mindset, but from a common-sense business perspective.

I realize that “Transparency” is the latest, and perhaps most over-used, buzzword in the car business. But please bear with me for a few moments while I pose a few questions. Hopefully, it will stimulate some “outside the box” thinking.

First, what is the upside of hiding information from your customers?

Sure, you have to do whatever it takes to stay ahead of the competition. Sure, that’s what the legendary automotive sales trainers taught us. Sure, the chances of getting into a legal bind are pretty slim. Sure, everybody else is doing it. Sure, if you give customers too much information they’ll just use it to shop you. Sure, there are ways to “manage” your online reputation, even if you have some unhappy customers. I get all that.

But – Big Picture Time – is the “anything it takes to make a deal” mentality really a sensible way to do business in today’s world? Do you really think this will lead to customer satisfaction and retention? Do you really believe that customers will continue to put up with this type of behavior forever?

Here’s how I look at it: Every time you…

    Post a misleading ad, or

    Charge a customer more than the advertised price, or

    Lie to a customer about a vehicle being in stock, or

    Present a foursquare with inaccurate numbers in order to confuse a customer, or

    Present “packed” payments, or

    Fail to truthfully disclose a vehicle’s history, or

    You’re not completely honest and upfront with your customers

…there are some things you might want to consider:

  1. You may be breaking the law – but it’s only illegal if you get caught, right?
  2. What you’re doing may be an unethical business practice – but customers have no loyalty and you’re just trying to make a buck in a fiercely competitive marketplace, right?
  3. You may be pissing off customers (or potential customers) – but “ya gotta have haters, right”?
  4. You’re gambling with your future - this is an unsustainable way of doing business in the modern world and your continued success is greatly at risk.


Now you may be perfectly comfortable rolling the dice on number 1 and not care a lick about numbers 2 or 3, but what’s your answer for number 4?

I challenge you to think about it. Just think about it. Unfortunately, I didn’t when I worked in dealerships – I was a faithful practitioner of the old school ways.

Now, I realize that you may feel that this post is just more nonsense from an ex-car-guy-turned-consultant who doesn’t get it - and you may be right. Only time, and customer sentiment, will tell. But you may still want to ask yourself just how long are customers going to put up with business as usual?

Let’s face it; consumers have access to much more information, and choices, than they ever did. You can hate the internet and all its information. You can hate the idea of “transparency”. You can hate all the regulations that dealers have to contend with. You can hate the consumer advocates. You can hate the media and all of its anti-dealer sensationalism. But guess what? None of it is going away. The “But We’ve Always Done It This Way” mentality just doesn’t hold water anymore.

Now, I’m not a believer that the internet is going to somehow take over car buying. I totally agree that dealerships are, and will continue to be, the primary way that customers will purchase vehicles for a long time to come. But remember this; while customers may always choose to do business with dealerships, they don’t have to choose to do business with your dealership.

One final question: Are you a true professional who is ready, willing and able to succeed in the new world or are you hoping that things will never change?

In my book, transparency is not a dirty word, but complacency is.

Good luck and good selling.

Views: 752

Tags: Advertising, Attorney General, Car Dealer, Legal, Transparency, disclosure, regulations

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Comment by Tom Gorham on May 20, 2012 at 2:18pm

Just got my copy of "The Speed of Trust".  Looks good.  Digging in!

Comment by Tom Gorham on May 15, 2012 at 5:07am

Keith, thanks for the recommendation, The Speed of Trust by Stephen M. R. Covey. I just ordered it.

Comment by Ralph Paglia on May 15, 2012 at 2:10am

I liked Thomas Kelly's comment... The first sale i ever made as a professional car salesperson was to a couple who came into the VW dealership my first day on the job and wanted a Diesel Rabbit.  I asked them why, and then listened to all their reasons.  Growing up driving diesel trucks, I knew the pros and cons of diesels and took the couple to a close by gas station.  I asked the women to put $5 worth of diesel into my demo, a diesel Rabbit. Then I asked her to smell her hands.  We went back to the dealership and I sold them a Fuel Injected (gas) VW Rabbit.  The sales manager asked me how I sold a gas powered Rabbit because nobody was selling them.  He then told me not to do that any more... My mentor, a salesperson who had been there for 18 years told me not to listen to the sales manager, to instead listen to the customers and do what was best for them.  A year later I was the GSM of the dealership and never looked back.  Listen to your customers and take what they say to heart. Let them know you care about what is in their best interests.  Tell them the truth, disclose everything and don't be afraid to express your opinions based on what is in their best interest... You will sell plenty of cars.

Comment by Thomas A. Kelly on May 15, 2012 at 1:00am

Hats off to Aaron Camus....When I sold I walked lots of folks and pissed off a lot of impatient  managers. I have only sold in three stores and in each store they threatened to fire me in my first week. I kept my job by telling the managers to be patient and guaranteed them that within 90 days I would be at the top of their board and that within six months I would have more repeats and referrals that anyone in the store. I was told that "we like your enthusiasm but we have salespeople that have been here for over 20 years", my reply was, I WILL have more repeat and referrals than anyone. I kept my promises. My advantage?...don't like cheat, steal or mislead....build trust and put delivering vehicles aside, it always follows. Don't change Aaron, honesty and integrity will not fail you. ( and you will sleep well)

Comment by Bruce Polkes on May 14, 2012 at 10:25pm

Trust and transparency are the foundation of real-world relationships - why should this be any different?  Especially in today's world where customers have so much information at their fingertips (smartphones, tablets) it's easy to see who's dishing out the BS. So why bother? Jim's premise is right-on and Aaron's example seals the point -- go against the old grain and let your success prove that it can work.  Harness technology to support your transparency (use a tablet yourself to SHOW customers the information) and reap the rewards. More importantly the industry will reap the benefits of helping to right its tarnished reputation. Bravo!

Comment by Jim Radogna on May 14, 2012 at 7:17pm

The SPEED of Trust: The One Thing That Changes Everything - Book Description:

With nearly 750,000 copies in print, this instant classic shows that establishing trust is “the one thing that changes everything” (Marcus Buckingham, coauthor of Now, Discover Your Strengths) in both business and life.

Trust, says Stephen M.R. Covey, is the very basis of the new global economy, and he shows how trust—and the speed at which it is established with clients, employees, and constituents—is the essential ingredient for any high–performance, successful organization.

For business leaders and public figures in any arena, The Speed of Trust offers an unprecedented and eminently practical look at exactly how trust functions in our every transaction and relationship—from the most personal to the broadest, most indirect interaction—and how to establish trust immediately so that you and your organization can forego the time–killing, bureaucratic check–and–balance processes so often deployed in lieu of actual trust.

Just Ordered a copy. Thanks Keith!

Comment by Keith Shetterly on May 14, 2012 at 7:02pm
Comment by Jim Radogna on May 14, 2012 at 6:19pm

Thanks so much to all of you for your kind words and comments! Keith and Tim, you both bring up excellent additional points that enhance the discussion greatly.

For many years, I lived, breathed, passionately embraced, and trained others on traditional automotive sales practices. And, quite honestly, they served me well at the time. But having taken the opportunity to step back from day-to-day dealership operations and becoming a student of the industry from a much broader perspective, I think I've learned a great deal. Had I continued in retail, I likely would have stayed in my comfort zone and rapidly become a dinosaur.

Kudos to all of you dealership professionals who participate in these excellent communities and embrace cutting-edge ideas and outside-the-box thinking. I could easily image myself having made excuses about "having no time for all that".

Perhaps instead of the good old "what's it gonna take to earn your business?", the new mantra should become "what's it gonna take to earn your trust?"

Thanks again!

Comment by Aaron Camus on May 14, 2012 at 5:33pm
It has been my experience that although I have only been in the car business for a short time, I have managed to figure a few things out. First, that people buy cars from people... Specifically, people they like. Though I have had my managers chastise me for being transparent and honest with my customers - they say that my "be backs" will rarely be back... I have a huge rate of success with be-back business.

I attribut it entirely to the fact that I try to be the type of salesman that UI would like to buy a car from. No bull, no games, just straight up numbers and honest answers from a guy that genuinely wants to earn their business. When they leave my dealership and go to another that plays by the old rules, they come running back to me time and time.

What I'm saying is that Jim seems to be dead on here. With all of the social networking and instant communication we have in today's world, you can't know how many people will get a bad review of your smarmy practices if you choose to engage in them.

Likewise, if you are straight up with your people, they will respect you for it, and speak highly of you and your dealership to God only knows how many people. If they post on Facebook, good or bad, about your dealership... you just don't know how much harm or help it could possibly do!

Let my manager be disappointed in the lost sale today... I'm reaping the rewards of the be back buyers left and right. And I have them go ahead and post a review about me while they wait for F&I! It never hurts to get some kind words in BEFORE they go in the box! :)

Thanks, Jim for your insights and experience!
Comment by Tom Gorham on May 14, 2012 at 4:09pm

Thomas, like Keith, I love the Mom example.  Boils it down, doesn't it?

Timothy, Absolutely!

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