Is the dealership model outdated?

Passenger, utility, heavy equipment, and specialty vehicle dealerships have been operating in the same way for the past 100 years. Over time, and for reasons ranging from smart consumerism to awful buying experiences, consumers have grown wary of the dealership model and the unnecessary anxiety the buying process can cause. Though new features, safety, and a plethora of technological additions are available in vehicles today, consumers of all types worry about the same things.

  • Price
  • Reliability
  • Fuel Economy
  • Performance Needs
  • Maintenance
  • Warranty
  • Perceived Value

Consumers love their vehicles and are excited to get their hands on a new car. But many of them don’t care for the actual dealership.

Honda Insight Owner - Houston Web Marketing

“…my Honda Insight is a tech lover’s delight…” | Photo by PhotoAtelier, Flickr

Rather than treating a vehicle purchase as an exciting journey, many consumers are now hesitant to even start the search for a new vehicle. Social media channels are inundated with retelling of horrendous car buying experiences, making consumers grown especially distrusting.

Not all dealerships have bad reputations. But today’s consumers are still wary to engage in business. Much less repeat business.

So where is the disconnect? Where are dealerships going wrong?

There are now more marketing mediums than ever before. As a result, dealerships and manufacturers exploit almost every new digital medium in an effort to better service customers. The problem arises when a disconnect between the digital experience and the “real-world” experience occurs. Some times that disconnect is due to the bad experiences permeating through social media. Most of the time it’s due to an incohesive marketing strategy.

Even though a dealership invests in radio, TV, newspaper and website spaces by adding them to their marketing budget, consumers rarely see all of the mediums. Instead of seeing a bigger picture and experience, consumers see only portions of campaigns, selectively forming opinions and impressions of the manufacturer and dealership. The dealership model looks outdated if those impressions do not match the dealership, sales team, and overall experience.

Update the Model, Save the Industry

Tesla Motors Cars Charging - Houston Web Marketing

Tesla Headquarters Charging Station | Photo by Windell Oskay, Flickr

It is no secret that manufacturers and dealerships are experiencing pressure in their business model space from both consumers and new competition like Tesla Motors. The model is so threatened right now that major media outlets are closely watching legal battles.

The real reason Tesla is engaging successfully is very simple; they are better to able meet consumer expectation through the buying process. Because dealerships and manufacturers are separate entities it is very hard to ensure the same messages, visibility, and branding are consistent across each marketing medium. A single company does not have that problem.

How Can Dealerships Overcome the Disconnect?

To solve the disconnect, manufacturers and dealerships need to think about the consumers’ “big picture” and how they perceive the dealership. In other words, manufacturers and dealerships should focus on building brand loyalty & reputation, better accessibility, and better expertise.

1. Brand & Reputation is Life or Death

Consumers form quick opinions of brands and are influenced at each stage of the sales process. From the initial touch (the consumer’s experience with a marketing message) to the contract signing, there are numerous ways to build up branding and reputation. Those experiences should always match the way the dealership operates in the real world.

2. Accessibility

Now, manufacturers and dealerships need a highly visible web presence just to be relevant. Because of lifestyle and usage, mobile visibility is now the quickest growing information device. Consumers are now more likely to use a mobile device to browse cursory information before using a desktop computer to investigate in detail.

That means dealerships need to be present and highly visible on local search, national/regional search, social media, industry news, and other digital outlets. Each outlet needs to reflect the same brand, image, and messaging as the other outlets. In order to drive traffic and sales, engaging content must be broadcasted to drive interest.

3. Expertise

One big issue consumers have with vehicle purchasing (especially in heavy equipment sectors) is pushy sales people. Unfortunately, even when sales teams aren’t pushy, they still retain that reputation. Some manufacturers are already making changes to fix that perception.

Houston Web Marketing Agency explains BMW's new buying process.

BMW Dealership | Photo by Ron Sombilon Gallery, Flickr

BMW has recently tasked itself with revamping local dealerships to better service customer needs. This was important to the entire industry because a major player is making a fundamental shift in the dealership model. BMW is incorporating elements borrowed from other successful brands, like Apple, which utilizes open spaces and design elements that give consumers the space and opportunity to imagine their ideal vehicle.

BMW has actually started playing with the salesman position itself by reducing sales staff and increasing “product geniuses.”

A product genius is a technical expert who is not motivated by sales or commission, but solely by providing an amazing consumer experience. This allows the consumer to ask educational questions in a relaxed space without feeling pressured. Put simply, consumers want to buy, not to be sold. And, in the age of active and smart consumerism, wouldn’t it be smarter to allow the consumer to do the driving during the sales process? In the end, the dealership is still the expert and the one who sets the price.

If a major brand and player like BMW is willing to back off and let the consumer have more control over the buying process, perhaps the rest of the industry should start take note or face the rise of another Tesla Motors.

Liira Media, now Foundry512, is a digital marketing firm dedicated to client results and to providing end users with the best media experience possible.  We connect our clients to their target audience in a manner that facilitates healthy and transparent relationships.  Those relationships allow our clients to grow.

One reply on “Is the dealership model outdated?

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