What Car Dealers Can Learn from Amazon

Build a moat around your best customers, says Dealerware’s Russ Lemmer.

Steve Finlay, Contributing Editor

January 10, 2020

1 Min Read
amazon
“Amazon is the best example of consumer economics,” Lemmer says.Amazon

Consumers don’t wake up hoping to spend more time at a car dealership, just as they don’t awake hoping Amazon will ship merchandise slower, says Russ Lemmer, founder and president of Dealerware.

He draws that analogy during a session entitled “What Retail Automotive Can Learn from Amazon” at a recent J.D. Power Auto Revolution industry conference in Las Vegas.

Lemmer is a fan of the Amazon business model (especially its rapid 1-day Amazon Prime shipping service) and thinks auto dealers can learn from the online retailing giant.

Dealerware uses technology to help dealer clients run their fleet operations, from loaner cars to vehicle-subscription units. Dealerware says it manages tens of thousands of vehicles for hundreds of dealerships, including major auto groups.

Largely because of the Internet, the U.S. marketplace is moving from sheer transactional economics to so-called consumer economics, and dealers should hop aboard that train, Lemmer says.

Transactional economics fixates on maximizing profits whereas consumer economics centers on “splitting value with customers who are in it for the long-term,” he says. “Amazon is the best example of consumer economics. It’s building a moat around your best customers.”

Towards that end, Lemmer advocates dealers do these three customer-friendly things:

  • Upgrade courtesy-car operations to prevent long waits for service department customers who are getting loaners.

  • Upgrade the “out-of-dealership” experience. “The product comes to you, not the other way around,” he says. “If you give people their time back, they open up their wallets. People are willing to pay more for convenience.”

  • Upgrade the communication experience. Lemmer recommends dealers use text messaging more, saying 98% of sent texts are opened within five minutes, yet only 10% of dealerships text customers. “Get a text platform.”

About the Author(s)

Steve Finlay

Contributing Editor, WardsAuto

Steven Finlay is a former longtime editor for WardsAuto. He writes about a range of topics including automotive dealers and issues that impact their business.

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