How to Be Retail Victor

We live in a society that hates short-term expense more than it values long-term customers.

Our markets turn on quarterly numbers of dollars, not on numbers of satisfied customers.

So, by side-stepping doing the right thing manufacturers are often rewarded by better quarterly earnings reports, their mantra being “a penny saved is a penny earned.”

Unfortunately the highway of once great companies is now littered with narrow definitions of the customer relationship and countless stories of the demise of visions that have been sacrificed to the God of portion controls and cost containment protocols.

Perhaps the greatest measure of this fall from greatness is today's frighteningly high marketing cost per retail sale on domestic vehicles. Their decline in margin is only slightly more obscene than the decline in market share.

We can, however, reverse this tide with an infrastructure that we've already paid for. It is in the digital residue of the dearly departed dot-com mania. Yes there is a bright side to all the dollars that were invested in technology. That side is the information highway.

All we need to do now is stop discounting the customer's experience along with the products we vend. We must empower our people to use information to help us to invest in our customers at precisely the time they'll feel it most. We must embrace the precious few opportunities we have to make a lasting favorable impression on folks; we must believe that we cannot recover from yesterday's tight-fistedness through tomorrow's generosity; that doing something generous when it suits you does not overwrite failing someone at a critical moment.

Tomorrow's retail winners will cement lasting relationships by streamlining the decision tree to a point where customers feel that a given supplier possesses a sincere, spontaneous, and vicarious joy in doing right by them. Such moments are few but top retailers will handle them almost instinctively to replace the transactional or situational ethic that preceded such opportunity.

The manufacturers and dealers who dominate this new marketplace will use combined information to satisfy customers through unified decision trees and mutually shared goals.

We already possess more data points than we know what to do with, but have not moved the sales needle for lack of a supporting value system to kick in once the dots are connected. Focus groups and databases cannot show us how to raise the value of relationship above the value of a discount because our cultural foundation is rooted in predicting whether X dollars of investment might produce Y amounts of revenue. This is why we build campaigns, not relationships, even when our programs are like chocolate mints on hotel pillows.

In the case of “CRM,” if our goal is vehicle sales, or more narrowly, profits, then we will treat immediate sales and immediate profits as “good” and immediate costs as “evil.” We will not prioritize the retention of customers over retained earnings.

Until dealerships, reputations and careers are put on the line (as I am willing to do), no strong relationships will be cultivated.

Customers depend on very little beyond the hard reality of a discount while manufacturers run their programs, not for customer benefit, but to coincide with this quarter's numbers.

Nonetheless, it is engaging that the best results seem to go hand in glove with the best relationships, suggesting that manufacturer/dealer/customer satisfaction equals profit. However, it is hard to find a financial advocate for the proposition that such satisfaction is more than the coincidence of profit rather than the genesis of it.

Peter Brandow is a 25-year veteran dealer with stores in Pennsylvania and New Jersey.