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Wednesday, November 24, 2010

Does J. D. Power Study Indicate Coming Shift in Automotive Marketing?

CAR BUYING CONTINUES TO EVOLVE IN UNEXPECTED WAYS THAT PROVE THE CONSUMER AS INNOVATOR AND THE AUTO INDUSTRY AS REACTIONARY.

Let's take a look at a few conclusions we gleaned from an analysis of the recently released "New-vehicle sales experience study" by J. D. Power and Associates:

• 52% of new-vehicle buyers cite dealer treatment (salesperson) as a reason to purchase their new vehicle from a specific dealer...  

• 38 percent of buyers cite vehicle price or the deal offered as the reason for selecting their dealer...

• 60% of new-vehicle buyers visit more than one dealership during the shopping process.

• 18% of buyers "end showroom visits primarily due to poor customer treatment by the dealer's salespeople" (salesperson). The proportion of complaints about too much sales pressure equals those about receiving insufficient attention from salespeople.

WHAT DOES THIS MEAN?
Customers are now placing more value on how they are treated during the new-car buying experience. This is diametrically opposed to what many Internet sales channel pundits have predicted over the past 10 years... Which has been the "vending machine" concept of online automotive marketing with full web based vehicle purchase capabilities... I should know, since I am one of those Automotive Internet Sales pundits!  

Traditionally, our industry has been far more willing to bet on price versus process. I believe this is due to our industry's relative inability to effectively manage the customer experience at the dealership level... Plus, implementing anything across a franchise network of independent retailers can be a daunting undertaking.  Combine that with the prevailing wisdom of "Blow and Go" inventory focused marketing strategies driven by production centric manufacturing systems and we get the "What? Me worry?" auto industry personae of the past 50 years. 

Of course, for auto executives sitting in Detroit and Torrance located office, incentives, stair-step dealer cash, zone and district sales manager pressure is simpler to implement, requires only the most rudimentary business skills, and seems to have a direct impact in "Push" marketing effectiveness. 

This type of "Push" versus "Pull" marketing strategy has made the auto industry more cyclical than necessary, and if the time period measured is extended out far enough, has rarely produced an actual increase in sales beyond the "pull ahead" effect. With the automotive industry's recent near-death experience, I find myself wondering if we are  at the inflection point where there is an opportunity to dramatically improve retail sales management processes in a major share on dealership showrooms. 

Or, is now the window of opportunity for new  car companies to enter the North American market? (ie; Fiat) Their appearance and impact on the automotive scene happening in a manner that will require adaptation by the more established competition... Could these adaptations be manifested in significant new mechanisms for vehicle ordering, sales opportunity management, and retail operating systems?

Yes, it is an interesting time to be in the auto industry... An even more interesting time to leave the constraints imposed by the largess of current corporate environments for the opportunity to become more of a leader in the car business adaptation and transformations to come!

[Sent from Ralph Paglia's iPhone]

Ralph Paglia
cell: 505-301-6369 

1 comment:

  1. Ralph,

    I have always observed that great minds think alike and your post on the importance of transitioning the customer experience from their self empowering online shopping trip to the reality of their brick and mortar real world interaction at the hands of a possibly "self serving" and /or "less informed" sales person to purchase a vehicle proves it!

    The following introductory email of my latest and greatest vendor client -- IntellaCar -- exemplifies their solution for auto dealers to keep up with their more educated customers as well as the competition down the street:

    IntellaCar – the Mobile Platform that Empowers Sales Consultants

    IntellaCar (www.IntellaCar.com) accelerates and empowers the dealership sales (and training) processes by putting an optimized world of information wirelessly in the hands of the Sales Consultant (SC) -- in the showroom, on the lot, during a test drive, on the SC’s day off (when a customer calls).

    It’s also a powerful resource for your BDC and/or Internet department to efficiently answer your online customers questions.

    IntellaCar is the result of intensive concept/product development built on significant in-dealership research and industry expertise. The team at Hughes Hunter, Inc. (www.HughesHunter.com) – the parent company of IntellaCar– has extensive auto experience and works directly with O.E.M’s -- including Toyota and Lexus.

    The unrivaled power of IntellaCar is due to its Optimized Information Delivery (O.I.D.) System:

    • Built from the Sales Consultant’s perspective, IntellaCar delivers the optimized information SC’s need as it synchronizes with their sales rhythm.

    • The comprehensive content covers every step of the sales process from Greeting through Delivery.

    • Launching on the iPhone, iTouch and iPad with Android following

    The unique benefits that IntellaCar provides include;

    • Increased sales and customer satisfaction by improving SC trust and effectiveness

    • Shifting the sales focus from price to value by helping customers truly understand each vehicle

    • Preparing/equipping SC to stay a step ahead of today’s well-researched customer

    • Improved employee ramp-up and retention due to integrating training into the sales process

    • And many more…

    I chose to represent IntellaCar and to recommend it to our auto dealer clients to address exactly the problems and the opportunities that your post has confirmed and I plan to use the statistics in your post to support our ongoing marketing messaging to both quantify and qualify the value of IntellaCar -- THANKS!

    After all, what are friends for!

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