Many people expect today’s auto dealers to give customers exactly what they want and need. There’s nothing wrong with that, theoretically.
But the reality is auto makers often fail to meet dealers’ wants and needs, especially when it comes to inventory orders.
That situation has improved somewhat in recent times, but auto makers still are wont to force unwanted inventory on dealers. Most egregiously that consists of duds that are hard to sell. Yet, modern customer-friendly standards preclude dealers from resorting to hard sells.
On one hand, the new mantra of kindly auto retailing is that dealers should sell customers only cars of their desires. On the other hand, dealers often are stuck with aging inventory they didn’t ask for in the first place.
What’s wrong with that picture? It’s this:
Auto makers can’t uncaringly ignore dealers’ wholesale wants and then expect dealers to gently fulfill customer retail wishes. What soft-sell approach can dispose of slow-sellers lingering on the lot? It’s a dilemma dealers didn’t create, but it’s theirs to keep.
They must figure out how to get rid of so-called “brown bananas,” an industry term for overripe inventory that isn’t going to sell itself and rapidly is losing value.
Giving away such vehicles is one solution to clearing the lot while still making the customer happy. Then again, some freebie recipients might complain on customer-satisfaction surveys that, because the car they got wasn’t their first choice, they should be mollified with free gasoline for life.
I recall the tough spot in which one Dodge dealer found himself. It was the ’08 model year, but he still had some ’07 vehicles left – and two ’05 models! “I can't sell them even at reduced prices,” he said.
By the way, he is one of the 789-brand retailers who got eliminated in this year’s big dealer roundup.
Mavens of modern marketing must see the full picture before they advise dealers to coddle customers and keep them away from the moribund models backed up against the fence.
Of course, the industry shouldn’t regress to the old tactics of pushing product down customers’ throats. That’s how dealers of yesteryear got a dark image that still haunts their successors to some extent.
Blame it on Horace Hull and Jimmy Dobbs. They were the co-owners of a Memphis, TN,dealership and co-creators in the 1940s of an ignoble selling approach. Called “The System,” it was a form of customer abuse that spread throughout the nation like an epidemic.
It entailed a step-selling, high-pressure approach. Step one was to get hold of the keys to a customer’s current car, usually on the pretense of needing to do a potential trade-in.
The key confiscations allowed salespersons to detain customers while subjecting them to stalling games and assorted gimmicks designed to wear them down, knowing they couldn’t walk out, start their cars and drive off. After all, you had their keys.
Sales people kept up the pressure until the weary customers finally gave in, signed on the dotted line and left in their new vehicles, the selling of which brought maximum profits to the dealership.
But that came at great cost to dealers. “The System” proliferated in the 1950s and 1960s, hurting dealers’ reputations along the way. Around that time, people started comparing a trip to a dealership with a visit to the dentist.
Yes, it was a bad way to sell cars. It’s much better now. Smart dealers realize customer satisfaction and a fair profit are not mutually exclusive. They also grasp the importance – and power – of repeat business, the likelihood of which is enhanced when customers are treated well.
No one suggests going back to the horrible Hull-Dobbs system. But let’s stop devilishly pushing unwanted inventory on dealers, and then telling them to act saintly as they try to figure out what the heck to do with it.