Keep Clients, Make Money

The long-term business effects of the recent disaster in Japan are only beginning to be felt, and no industry is immune, least of all the automotive industry.

Yet how dealers handle the expected delays and product shortages can affect their performance and success well into the future.

When Japanese auto makers such as Honda and Toyota first started selling cars in the U.S., a limited supply of “hot products” resulted in waiting lists of consumers ready to buy.

Dealers could set the terms — price (non-negotiable), color, pick-up date, priority and other factors — because demand outstripped supply. Building relationships with customers was secondary. Profit was king. The image of car salesmen suffered.

In the years since and as inventory became more available, this industry made great strides in creating structures where customers come first, where relationships built on service and trust bring repeat and referral business.

For dealers who embraced this mindset, a tough economy and inventory shortages have been less painful.

Focusing on first helping customers select the right car — one that meets their needs, wants and desires — and only then talking price, has helped them survive as their loyal clientele remain faithful.

Once customers fall in love with a car, price becomes secondary, especially higher prices. Even in the early days of the Toyota Prius hybrid, most customers who had to wait for delivery were treated fairly, as dealers understood customers could easily buy elsewhere.

With shortages and delays caused by the natural disaster in Japan, dealers may once again find themselves in a situation where demand outstrips supply. The challenge is to maintain a focus on customer relationships while maximizing profits. These are not mutually exclusive goals.

Certainly, every dealership should take advantage of the opportunity to set prices to meet demand and maximize profits.

However, if price and profit become the primary focus, personnel educated on the importance of building and nurturing relationships will become mere order takers, not professional sales people.

When this happens, the focus becomes selling as many cars as quickly as possible for the highest price. Building customer relationships becomes the last thing on their minds

This is extremely short-sighted. Dealers and managers must avoid the lure of putting profit ahead of people.

Clients, like elephants, never forget bad treatment. While customers may not always go out of their way simply to save money, they will to get better treatment.

Long-term, dealers who give in to temptation, who sacrifice relationships while demand outstrips supply, will suffer.

The goal is to both strengthen customer relationships and maximize profits. Dealers and managers must ensure that everyone:

So how do dealers and manager keep customers and maximize profits? By helping customers find the exact product or service that meets their needs. And making sure their experience is positive.

By recognizing customer perceptions must rank high, you will maximize profits and retain loyal clientele.

Richard F. Libin, author of “Who Stopped the Sale?” (www.whostoppedthesale.com) is president of Automotive Profit Builders, with more than 42 years experience of fostering customer satisfaction and maximizing profits through personnel development and technology. He is at [email protected] and 508-626-9200.

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