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The High Cost of Poor Process

By April 17, 2014Best Practices

The lifetime value of a car dealership customer is between $250,000 and several million dollars.  Stay with me…

Far too many dealers are living in a bubble, knowing a lot, but doing a little.  When dealers fail to execute, the lost dollars add up quickly.  I speak with Dealer Principals, General Managers and various internet personnel on a regular basis that believe their processes are solid, only to find out the truth reveals the opposite.  Let me share with you a real world example where a lack of communication process cost a dealership a potential lifetime customer.


Toyota Dealership in Arizona

A kind, loving woman (my mom) is ready for a new car and her son (me) happens to be visiting from out of town.  She asks her son to help her through the process and her amazing (and devilishly handsome) son agrees without question.  The woman talks about a personal experience she had recently when she rented a Toyota Camry.  Since that time she has noticed more Camry’s on the road and she has browsed the internet for Toyota Camry information.  Hmm… should the rental car company get credit as the actual lead source?

Still with me?  Good, I’ll fast forward a bit.  My mom’s experience included impressions delivered by television advertising, display ads, PPC and maybe even some good old fashioned SEO, none of which were free for the dealership.  They paid for my mom’s attention and the opportunity to sell her a car.  They earned it because I went with her to pick out and purchase her new Toyota Camry.  The process was pretty smooth.  Not the best I’ve seen, but very good including how the sales person worked appropriately to encourage a woman in her sixties to write a positive review for the dealership post-purchase.  Before you give this dealership five stars, let me tell you how the movie ended.


Count the Cost

On the hood of the Camry my mom picked out was a small blemish that required a visit to the body shop.  The sales person made my mom very comfortable about how they this minor repair would be handled.  Unfortunately, reality proved him to be very wrong.  Not only did the minor repair take much longer than was promised, the dealership put 60 miles on my mom’s new Camry over a two day period, even though she was supposed have her car back the same day.  When my sweet, non-confrontational mother asked the service guy about the 60 miles, he delivered a condescending explanation of how they had to send her car out to someone else to have it fixed.  He was clearly irritated my mom would even dare to question him about the additional miles driven in her new car.  So, it wasn’t a service they performed at the dealership.  Fair enough, but that was never disclosed and people like to know what the hell you’re doing with their car.  So, guess what happened?  She will never go back there for service, will never buy another vehicle from them, and will never tell her friends anything but the truth about her experience.  No one wants that experience.

How much does the average dealer spend advertising/marketing each month?  On average, dealers pay over $600 to advertise each new vehicle they’re trying to sell.  It adds up fast!

Dealers, you spend too much money attracting potential customers to allow your sights to be set on anything but turning each one into a lifetime customer.  Process isn’t exclusive to the internet part of your business, so make sure you have established communication processes in your service and parts departments. If not, they may be sending the lifetime customers you’re earning to your competition.

Author Shaun Raines

VP of Marketing Email Shaun Shaun is a true internet car guy and the Vice President of Marketing at DealerOn. His automotive internet career began in 1998 with the Reynolds and Reynolds team that launched Microsoft’s, CarsDirect Connect, Yahoo Autos, Automark Websites and Reynolds Web Solutions. Shaun’s Marketing prowess coupled with expertise in Social Media allows him to effectively market DealerOn’s capabilities, extend its reach and build the right reputation. His unique blend of humor and automotive experience has made Raines a sought after speaker at industry events including NADA, NCM, Digital Dealer, DrivingSales Executive Summit and 20 Groups Shaun lives in Frisco, Texas with his wife, children and dogs.

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