Digital Dealer
By Peter Brandow
Many people, from inside and outside of our industry, seem to be riveted on the technology that will drive e-commerce. I, on the other hand, am focused on the new culture that is evolving between manufacturers, dealers and customers. You see, I believe that the narrow end of the funnel is not bandwidth, baud rate or how much heat you can put through a chip before it melts. I believe the limiter in this new frontier is the relationship that must be in place before any real commerce will happen: the trust that must exist before any meaningful number of customers will commit to purchase complex and expensive products online.
A few months ago, I spoke about the cultural gap that separates manufacturers from retailers. At that time, I suggested that the gap is probably the result of the pride that manufacturers have for their products. That logic sprang from the adage: "If you build a better mousetrap, the public will beat a path to your door." The better mousetrap paradigm suggests that retailers are neither necessary nor desirable. In their stead, manufacturers should simply build better products. Were that the case, it would be easy to understand why some manufacturers harbor disdain for retailers whose mission it is to undermine the just rewards of the better product producers simply by crafting "schemes" to lure the public from their doorstep onto the path of lesser products wrapped in marketing hype.
The interesting thing, which flies in the face of all this, is that the greatest market share belongs to those manufacturers who are closest with their dealers. Why? It's simple. Dealers are not simply marketers on a mission to push poorly conceived products. Rather, dealers are the final step in the distribution process. Dealers are the face and handshake of the deal; the difference between the cold abandonment of "caveat emptor" and the warm comfort of "you're in good hands."
Many manufacturers now are efforting mightily to embrace their dealers in hopes that greater market share will follow. Some are hoping to direct their efforts by use of third-party "satisfaction indexes," thereby allocating their resources to wherever the weakest score points them. Unfortunately, it will not be long before those manufacturers learn that selfish motives breed self-serving strategies, not partnership. Besides, managing a score will continue to keep them one step behind the wave rather than ahead of it. You have only to look at the progress that Chrysler has earned by de-emphasizing the score and encouraging a "process" driven solution. This is not intended to discourage the polling of dealers to publish what's on their minds. I simply pose the question: when was the simple wisdom of paying a visit and asking dealers how things are going replaced by third-party mail-in surveys? The manufacturer who is fearful of getting close enough to ask, is not likely to progress very far in establishing a great relationship any more than the retailer who avoids contact with customers is likely to succeed in boosting sales (cyber or otherwise).
Recently I attended a regional conference of over a thousand dealers of a particular manufacturer. During the conference questions from the audience were solicited with verbal assurance that every question would be followed up with a personal call. I am still waiting. The idea was great, but the follow-through hollow. You see, ultimately, trust is built upon relationships. And relationships are built upon human contact. It stands to reason that dealers who are treated in a detached and sterile way will not likely embrace their staff and customer in the best ways. Conversely, great market performance is the natural consequence of great dealer relations.
As important as up-close and personal contact is, they are nothing without integrity, trust and just a touch of generosity. The numbers of manufacturer-to-dealer promises that prove empty are as many as the lies that are printed in the Sunday auto section between dealers and customers.
Manufacturers that wave a "partnership" banner while in dealer meetings, but shy away from dealer contact, create mistrust, not partnership. So too goes the result of project 2000 plans that assist certain dealerships to the disadvantage of surrounding dealers. This goes equally for affirmative action that is doled out after all other options are exhausted and never with sufficient resources to integrate the marketplace.
Positive dealer relations demand fairness at the ground level, not simply broad mission statements that look good at 40,000 feet up. I wonder how many of those slogans would survive if the audience of dealers where equipped with hand-held devices that could register a level of audience confidence "real-time" as the talking heads on the dais were spinning their yarns.
Ultimately, the dealers and manufacturers who are able to join in the task of providing a seamless shopping and buying experience on the Web will be those who trust one another. This trust will be honed from the knowledge that each will be there for the other in the hard times. The litmus test of manufacturer trustworthiness will be how they bear up under Wall Street pressure. Nothing is more likely to corrupt the dealer-manufacturer relationship than the pressure to produce numbers for this or that critical "quarter." Those pressures are the stuff that induces a manufacturer to constrain budgets and withhold programs at precisely the time when their dealers' financial healths are hanging by a thread. Imagine how dealers must feel seeing their manufacturing "partner," swollen with unprecedented profits, but hesitating to back programs that would move the market. Now think of how much worse the scenario becomes when they hear that the reason their partner is so disposed is because of a chance to beat this quarter's expectations on the Street; or because a few "top dogs" are anxious to hit their bonus benchmarks.
We all have weighed in on the great debate of who owns the customer, how much information should be exposed on the Web and what information technology system will tie all this together. We all have strong feelings about whether the dot-com world will play out to dealer advantage, manufacturer advantage or customer advantage. After millions of hours and billions of dollars we are little further along except for one immutable fact that is as ancient as civilization: commerce is built on people and trust. It's not about technology. It's about people. So, before you invest a piece of your future in a path to the new horizon, ask yourself whether your "partners" are on that same path.
Stay tuned. Next month I'll clue you in to the five questions (and answers) that will tell you if your manufacturer is likely to leave you behind in the cyber wars; the one argument that lawmakers are not likely to resist in the direct-selling wars between dealers and manufacturers; and the truth about lead generators like Autobytel.
Peter Brandow, nationally known for C.A.R.S. (Cyber Auto Retailer' s Success) e-commerce seminars, is one of the top five Internet new car dealers in the country. He is the dealer of the Brandow dealerships, the national dealer technology chair of e-GM, a board member of NADA's IT committee, and an attorney in Pennsylvania. pbrandow@dealeronline.com
