Energized by new products and growing sales, auto makers are looking to strengthen their partnerships with dealers.

“We have maintained a very humble and hungry demeanor with our dealers; a real can-do spirit and one of true partnership and teamwork,” says Alan Batey, General Motors vice president-U.S. sales and service.

Agendas aren’t always the same for dealers and auto makers, but “by having very open communications and putting trust in the middle of everything we do, we can do remarkable things together,” he says.

Batey adds: “Dealers need to focus like never before on customer retention, to exceed their customers’ expectations at every possible touch point, and they need to grow loyalty. Those stores that do that are, and will continue to be, very successful and profitable.

“Those stores that live in the moment and are opportunistic and don’t back it up with really great service, frankly, are going to be struggling.”

Batey encourages GM field managers to collect and share best practices with other dealers. One of those is having salespeople hold a yellow clipboard when they are meeting with a new customer.     

“It’s a real simple idea, but you can imagine when you are approached and thanked by two or three different employees, it makes the customer feel that they’re working with a store that cares about customers,” he says.

After entering the U.S. market in 1986 with a single model, the Excel, Hyundai has become a competitive force with products that rival competitors in quality and style.

Dave Zuchowski, executive vice president-national sales, uses this growth to excite his dealers.

“We show our dealers a very positive trend line for profitability and sales per outlet,” he says. “The No.1 thing we talk to dealers about is the customer experience. We have grown our volume from 300,000 to 700,000 in the last four years, and that’s a wonderful opportunity for dealers and us as the OEM.

“But if you can’t make those customers happy and keep them satisfied and coming back, then we would have squandered one of the greatest opportunities for growth that we would have ever seen.”

Zuchowski says he tries to maintain transparency in Hyundai’s dealer-council process. “We get into lots of arguments, we don’t always agree on everything, but we always have a full dialogue about it and when we decide to do something that the dealers don’t think is right, at least they know why we did it,” he says.

Hyundai appears to have sidestepped many of the issues that have gnawed at factory-dealership relationships.

“We came off stair-step incentives in 2008,” Zuchowski says. “Our incentive program is structured so that a dealer that sells 10 a month gets the same exact (per-unit) incentive as the dealer that sells 100 a month. We’ve really democratized our incentives.”

Zuchowski says he doesn’t believe in facility upgrades for their own sake, but he appeals to dealers’ self-interest to encourage them to stay competitive. “We don’t believe there’s any great value in building a huge mausoleum because you’re going to have to service that debt over time and the business is very cyclical.”

After showing his dealers the new products in the pipeline, Zuchowski asked them to compare their stores to their Nissan or Honda competition. If facilities look old or tired by comparison, do something about it, he says.

“It’s pretty easy to get your arms around how much upside potential there is and to make an investment back in your franchise,” he says. “We have 820 dealers, we’ve had over 400 major facility renovations over the last three years, and we’ve done it without the dealers kicking and screaming about it. They saw the value in it and they’re seeing the returns on those investments.”