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Mike Roscoe Dealer magazine 1116 W. 7th Street Suite 239 Columbia, TN 38401 (931) 388-1800 ext. 203 Fax (931) 388-4881 e-mail: mroscoe@dealeronline.com
Dealer Advocate
Dear Editor:
Jim Ziegler hits the nail squarely on the head when he says that one-price selling is so much garbage. Whoever told automobile manufacturers they had the remotest idea of how to retail cars? Every factory store I have ever seen was a loser. The factory stores didn't know how to retail cars when I was a kid growing up in the car business 40 years ago, and they sure don't know how today. I was a GM dealer in California for over 25 years and watched GM destroy the profitability of the California GM franchise with their "Value Pricing" scheme. It failed to increase market share or increase customer satisfaction, but did manage to reduce the new car profit per GM car sold by a significant amount. Mercedes is going to do the very same thing. The thing that is going to change the most at MB is the dealerships' gross profit. Whoever got the idea that one-price selling or short markups sell cars is totally ignorant of the real world. Just look around. Everyone who flies commercially today sits next to a person who paid a different price for the same flight. Every supermarket with scanners and matrix pricing can change the price of what the consumer buys on a day-to-day or even minute-to-minute basis if they wish. The rental car companies charge different rates to different customers at the same location, on the same day and for the same car. So where did this demand for all prices to be the same on new cars come from? From auto executives that don't have a clue as how to sell a car at retail or recognize what goes on during a retail sale. Customers have told us they don't like the WAY some dealers negotiate, not the negotiation itself. Just look at the success of Internet auctions like Ebay.com. Everybody pays a different price. My Lexus dealership negotiates the price on every new car we sell and maintains a very high 98.5 CSI score. If you negotiate the right way the customer is happy with the transaction. The industry does not need one price selling any more than the airlines did. Remember when American Airlines went to a simple four-tier ticket pricing plan? They got off that program in 90 days because the customers went to the competition to try to get a better price. Customers like to shop. They shop every "no-haggle/one-price" deal they get. The way to improve the industry selling standards is to better train salespeople to spend more effort on selling and less time on dealing. Improve salespersons' working conditions, methods of compensation, benefit packages and hours. Build an owner base that is loyal and provide your customers with the products they want. Public ownership is not the answer, either. These bureaucratic monstrosities have only made money for a few original investors and a few lucky dealers who sold out at prices only an insane person could refuse. I want to be in Norcross, GA when Ziegler skateboards across the deserted display yard. Until then I'll keep reading Jim's column and laughing my butt off.
Robert R. Longpre President, Lexus of Westminster Westminster, CA Riled Radio Rep Replys...Writer Responds
Mr. Sprague: Being in radio myself, I found your article in DEALER magazine ("How Radio Reps Get the Best of You", May/June '99, page 23) most interesting. I have been in radio for 8 years and have never pulled any of these "tricks". For you to imply to the dealers that every radio person is trying to pull these "tactics" only discredits yourself. In the future, before you decide to write something so one-sided, please remember this. Thank you! Dean Morgan, WXRS AM/FM
Dear Mr. Morgan: Thank you for responding to my article. You sound concerned about my experience in radio, so here it is. I am a Certified Media Expert, with 17 years of media buying and advertising experience. I have graduated from the Media Buying Academy and the Marketing Education Center. I have bought all forms of media from coast to coast, for Fortune 50 corporations and small retail operators alike. I am also a Certified Qualitative Research Director, a Certified Direct Mail Expert and hold a graduate degree in Corporate and Real Estate Law (with Honors). I was a research and PR expert for the California State Legislature and I do, in fact, have a book in the works on "media planning for the executive." I have also contributed material to two other marketing-related books and have been quoted as a marketing and advertising expert by the Los Angeles Times on numerous occasions. Now, about your specific comment. First of all, I never said or intimated that "all" radio reps use these tricks. I said "a rep may" and "another trick often used" My friends that are radio reps and station sales managers would never let me live it down if I said "all reps." I thought I was actually very gentle on the radio reps in this article. The actual war stories I can tell go way beyond the surface that I just began to scratch in the short article. My friends in radio can tell even better war stories than I can. When is the last time you said to a client, "You should not buy my station because our listeners do not fit your target demo, our signal is weak in your secondary market, our morning drive only ranks seventh in the market and/or our Arbitron ratings for the last four quarters have not shown near the growth that our competitor has?" NEVER! You would never say this. As a salesperson, you would starve to death if you pointed out with equal zeal and truth your station's negative points as you do your positive ones. Not with an average of 30 to 50 competitive radio stations in your market chomping at every buy they can get. I will also say, for the record, that radio is the most competitive traditional media there is. You know it and I know it. Why? Because a typical market has one or two daily newspapers, four or five television networks and thirty to fifty radio stations. So what radio rep makes a living telling it like it really is? Sincerely, Duane Sprague Sprague·Fanaday Marketin Sandy, UT
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Kudos
Dear Mr. Roscoe: At a 20 Group meeting last week, one of the members shared with the group an article from your magazine. He went on to say that almost every issue has something that he uses in his dealership. The 20 Group consultants here at NADA would appreciate receiving complimentary copies of your magazine. I have included a list of our 20 Group consultants. Dave Allen, NADA Dealership Management Consultant
Dear Editor: A neighboring dealer has been receiving your magazine and highly recommended it to me. I am, therefore, requesting that I be added to your mailing list. Should you require any additional information, please contact me. Ed Mullane, President, Mullane Ford, President & Founder Ford Dealers Alliance
Dear Editor: I would like to obtain a copy of Duane Sprague's book, "35 Tips For Successful Direct Mail Marketing", in addition to seeing more articles on media buying. Most of us in this business are woefully underprepared to negotiate media purchases, making a difficult process even harder than it should be. Thanks for the help.
Kedge Cook General Sales Manager Twin City GMC, Pontiac, Buick & Honda Port Arthur, TX
Hello Mike! I am hooked as a reader. I thought that I knew a lot about the retail auto business, because I am a lawyer and ex-dealer. I really love the business with all of its heartbreak, sham and disappointments. I never knew that there was a publication like yours. Many years ago, I was a faithful reader of Maynard Gordon and then the Insider Newsletter. Your columnists collectively are much better. I have had the pleasure of meeting George Pavylak and Sheldon Sandler. I have spoken with Bob Dilmore and I love the stuff from Dave Anderson (I thought that I was the only one who respected the "process".)
Tom Ratcliff, Wall, NJ