There was a time when I thought every invitation to a national e-commerce meeting was a compliment. My ego was so swollen I felt my participation had been requested by the highest ranking decision makers; that my opinions were valued because they offered efficient, effective and time-tested answers; that my solutions were elegant and that I was smart.
Moreover, I was sure that my vision was global and that I could bring together warring parties with one coherent, cohesive and complete cyber plan. I believed I could do this because I knew how to herd cats. I had domesticated wild and wooly digital critters from cyber space and I had them cohabiting in dealerships alongside of the analog beasts of burden that were commonly found there. I was the cyber cowboy showing the city slickers that it could be done.
What's more, I was willing to share intimate details. I had published a book with all my scripts and game plans. I traveled city to city, manufacturer to manufacturer and dealer group to dealer group to share my experience. I thought my contribution had merit and that my offer to share for free was generous.
Four years later I have deciphered the universal cyber code. I have learned from those whose strategies are labeled “how to serve retailers” that theirs is a cook book not a new religion.
The retailer is being tenderized for the slaughter, not strengthened for the rigors of new age competition. As importantly, I am finding out that customers are so far down the food chain (well below dealers) that even their mention is enough to exile their champions from the insider lists of “folks whose opinion will be considered when real decisions are made.”
I am happy to report that I've done much more than survive a 1,500-day journey through the web, I've grown up while studying the maturation of automotive digital retailing. I'm now hardened to the reality that a coherent electronic strategy is a powerful weapon in the arsenal of whomever deploys it.
Unfortunately, I've witnessed that taming the digital divide is as expensive and disruptive as it is effective. Most advances of new technology are a financial wash; a zero sum game of at least a dollar spent for each dollar gained. Most often the ratio tips against revenue with tens of dollars spent for each buck returned.
Therefore, today's development is almost always supported by self-interest and a fast return, and almost never sustained by a belief in a better tomorrow or superior customer relations.
That is, unless those relations come out of someone else's pocketbook. All launches of new technologies begin with small tryouts call Beta tests. (First tests (Alphas) are usually in the computer lab; the Betas are in the field.) The Beta tests partially answer whether it will function under the strains of the real world. But ultimately the defining question is always, “Will it produce revenue?” If it will, we go on, if it won't, it better have subscription (user) fees to support it.
In a world that lives and dies by quarterly financial results, the prospect of sustained investment against the “maybe” of results next year might be OK for hard product development (new cars and trucks), but it is not at all tolerable for system or process improvements. Dealers may be expected to invest in such folly but the sober world of manufacturing will not.
The last few years of living on airline and fast food has aged and seasoned me. I'll share a few conclusions I've drawn from my travels:
My cyber system (which sold over 1,000 vehicles annually to customers from as far away as 3-4 hours drive) is only of interest to my OEMs to the extent that they might replicate it generally (in diametric opposition to its basic benefit to my dealership which was — incremental, long distance sales for my dealership contributing strong profits to my bottom line). I was not interested in developing more ways for my local customers to hammer me on price. My OEM was interested only in providing as much customer contact and product exposure as they could get.
As web solutions are developed, there is a hesitancy to place dealer profitability in the equation other by straining to show that the Internet doesn't matter when it comes to dealer profitability.
The main view of the Internet by OEMs is to leverage the inventory in the field by diluting the value of being the local dealer. This has the manufacturer benefit of exposing standing inventory to more customers but has the dealer disadvantage of making it easy for customers to negotiate harder with more dealers.
As soon as the offensive threats of new technologies subside, only mid-level management and/or dealer councils will visit OEM meetings on cutting-edge development. Said another way, if the other guys can't use the new computers and software to steal market share away, then its just a bag of sales tools to be dealt with by sales types and marketing folks. Of course, if there's a revenue advantage to be gained immediately (this quarter), that fish can swim upstream real fast, and heaven help the poor soul who lets a strategic advantage slip through his net.
The result is that there is a sluggishness about adopting manufacturers' web-based strategies because there is little real profit advantage for the dealer so far.
But, watch out for growing investment in direct contact with customers through e-mail, direct mail and telemarketers that's being fueled by use of digital databases and mail merge software.
As you read this, someone in Detroit has an idea that puts your customer together with their sales opportunity and you better be prepared to hear all kinds of theories and excuses why you aren't in the deal. If we won't participate in building the gallows by which we hang, they might just build them behind our backs.
As a parting note, consider this scenario that happened to me:
I'm enjoying breakfast with a friend (and best customer) who says, “I got a strange letter from your manufacturer this week. They reminded me that my lease is about due and suggested I see my local dealer. Funny thing, though, they suggested a dealer across town that I've never visited or done business with. Why aren't they sending me to you, my friendly selling dealer for over 15 years?”
What followed was exactly what you might expect and a response that you (and I) can't believe. I called my manufacturer. They had no idea. “Are you sure? Can I see the letter? Has the guy moved? Maybe the letter came from our finance guys. Have you checked with our national advertising agency?”
I then called the captive finance guys. Same questions, but… “Yeah, we've seen this a lot of times and we've argued with them about what it does to our dealer relations.”
It gets worse. My friend gets calls from the factory and finance company, and they make him feel like he's done something wrong. Fortunately this guy has equity, good credit and little fear. He gives it right back to them.
Sad to say, after 15 years of satisfaction with my domestic cars and utes, he now drives an import. I don't sell imports. My luck. A manufacturer that can't control its own marketing and thinks that because they have entered the digital age they can take my customers, mix them up in a digital database and solicit them without putting me in the equation.
Worse yet, they are mad because I brought it to their attention, wanting me to accept that it's just one of those things you have to expect in the technological age.
Keeping track of whose customer it is, is like herding cats. Hmm.
Peter Brandow is a 25-year veteran dealer with stores in Pennsylvania and New Jersey. He is president and CEO of Brandow Companies.
