Clearly dealers are having less fun these days as auto makers struggle to reinvent themselves.
Part of that transformation involves torturing the design, manufacturing, marketing and distribution logistics until every penny of cost is wrung out. Central to that seems to be controlling the cost at the dealer point.
Manufacturers would have us believe this has nothing to do with a dislike for dealers or the fact that attacking dealers diverts attention from waste closer to the home office.
They like to say that squeezing dealer's margins is driven by the most fundamental of economic theories: that dealers create costs, and as costs rise, sales decline. Since, historically some of the greatest cost variables appear at the point of retail, many manufacturers quickly focus their cuts on the dealer's opportunity rather than on their own operations.
If that sounds fine to you, you likely are a “factory guy.” With enough dealers and others as scapegoats, you can try to avoid responsibility for poor results.
Unfortunately, certain truths tend to go bump in the night no matter how you fix blame. As a cure for those sleepless nights, below is a never-do list that modern manufacturers (and old-school factory guys trying to make new first impressions) might consider.
After all, tossing off dealers and vendors through bankruptcy only works once every seven or so years.
- Never use “mail-in” rebates rather than instant “in-store” discounts if it's just to scam unsophisticated and disorganized customers from gaining the benefit you've used to angle for their business.
- Never create retail prices that only a fool would pay and only for the purpose to propping up discounts.
- Never pretend to charm a dealer by asking his opinion without a sincere intention of changing your own.
- Never threaten a dealer for refusing to participate in a program that no self- respecting businessperson would endorse.
- Never ask a dealer to lose money on one product in order to get more of something else.
- Never ask a dealer to do something that would shock an informed customer.
- Never ask a dealer to deliver a product with a known, undisclosed flaw.
- Never ask a dealer to look the other way rather than fix something under warranty.
- Never ask a dealer to compromise himself or herself in order to do the right thing.
- If you can't explain holdback to a customer or a salesman, don't use it.
- Never expect anything involving quality or money to remain a secret.
- Never ask a dealer to travel to a meeting for the same information that could be shared in the comfort of the dealer's office via the Internet or phone conference. A live meeting should mean interactive and candid.
- Never ask a dealer to commit to something without full disclosure of all the costs.
- Never ask for a dealer to bail you out if you cannot make a reciprocal commitment.
- Never treat the consumer's complaint as a dealer issue or distance yourself from the dealer's solution. When a dealer speaks to the customer, he is the factory; when the factory speaks, it is the dealership. Period.
- Never tell your staff or the public that one dealer is better than another.
- Never enable one dealer to charge less than another for the same product in the same market.
- Never make the customer pay for differences in your treatment of a dealer.
- Never enable one dealer to be bad for other dealers.
- Never publicly condemn sales practices you privately support. Your worst dealer is the most vivid example of who you are and what you stand for.
These will make lovely New Year's resolutions. Follow my advice, and the industry will be a better place.
Peter Brandow is a veteran dealer.
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