I wish I could say I was surprised. It would be nice to think that in these highly competitive days, Europe’s car dealers were raising their game with customer-pleasing initiatives — as we’re always told they should do. The gurus in the world of customer satisfaction — this guru included — have been preaching the importance of taking care of both present and potential customers with exceptional skill and attention. Regrettably, however, a new survey of 1,120 dealerships in Germany shows that we have a long way to go, writes Karl Ludvigsen.
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Published by auto motor + sport, the survey was conducted by Concertare, a German company that’s experienced in many survey disciplines including mystery shopping on behalf of auto companies. The magazine dramatised its report on the findings by showing the doors of a dealership with a prominent ‘Do Not Disturb’ sign. Though this expresses some editorial hyperbole, it’s a fairly accurate description of the way they found walk-in car-buying intenders treated during a sampling of the dealerships of 34 different marques in Germany, for each of which at least 33 purchases were attempted.
Of the twelve dealership disciplines assessed by Concertare — detailed at the end of this piece — two stood out as being poorly handled. One, which will absolutely distress car makers, concerned test drives. On a scale from 0 to 100, the latter being fully satisfactory, test-drive satisfaction rated only 58 to a low of 25. ‘That dealers offered a test drive on their own initiative,’ said auto motor + sport, ‘represented an exception.’ Even when dealership visitors requested a test drive, this seemed to be far too much trouble for most dealers in Germany.
In response to the article, one would-be real-world Chrysler intender wrote to the magazine to say that he’d been promised a test drive seven days after a dealership visit and given an appointment. On the morning the test was to take place, he said, the ‘salesman’ called to say that he couldn’t offer a test car that day, but he’d be in touch soon to arrange another date. That was, said the letter writer, twelve months ago. He’d received nary a call.
Many car makers the world over are putting major programs into the field to encourage potential customers to try their cars. A test drive is a powerful marketing tool, exposing the customer to the product’s qualities and at the same time giving the salesman a captive audience. It also has the potential to create a small but nagging sense of obligation on the part of the customer. But in this busy world people are reluctant to take the time to test-drive a car, even though all the experts tell them that’s what they should do. With this in mind Vauxhall is backing an ambitious programme to get people into their cars for three-day test sessions. Costly though it may be, I think this has the potential to make a test-drive breakthrough. If it works as well as I expect, it could be rolled out to other GM markets in Europe.
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By GlobalDataThe other area where the dealerships fared poorest was in providing what Concertare called Needs Analysis — whether the interest was in a new or used car, what they were now driving, need for financing, specificity of the advice given and competence of the salesman. Here the ratings of the dealerships were no better than 53 out of 100 for the best and a disreputable 24 percent for the worst. Would-be car buyers had the impression that they were tolerated, not wanted. Sales people made little effort to ascertain their needs or desires, let alone engage in a meaningful discussion about a purchase as important and as costly as an automobile.
‘The service wasteland is alive and well,’ said a correspondent to auto motor + sport. ‘Seemingly no one wants to sell cars. In the last three days I visited seven car dealerships in the Karlsruhe area. In five of them I was allowed to look at cars, climb in and out, check the boot carefully, adjust the seats, etc. without anyone speaking to me.’ In their visits the Concertare researchers were obliged to press beyond this initial barrier, this lack of interest, but would-be car buyers have no such obligation.
Where initial contact was successfully made in a dealership, it was rated pretty highly: 83 to 52 out of 100. But more often than not there was no meaningful follow-through. Said one of the researchers of a visit to a Ford dealer, ‘No inkling of the car I wanted, no recommendation, no attempt at conversation.’ In one Mercedes dealership a salesman handed over a brochure, saying, ‘Just wait a minute, I have to make a call to Poland.’ When he finished his call the salesman vanished, leaving the would-be car buyer clutching his brochure and none the wiser about Mercedes products.
‘The salesman greeted me arrogantly,’ said a researcher of his visit to a Jaguar showroom, ‘put himself out not at all and had no interested in what I wanted. I had the feeling of being unwelcome.’ This was ironic, for in fact Jaguar dealers were among the best that Concertare found. They gained a 75 percent overall rating, only two percent short of the leaders, Volvo dealers. Others ranked at the top were sellers of Skoda, Smart, Chrysler, Land Rover, Mini and BMW, the last at a 72-percent level.
Germany’s volume sellers, Ford, VW and Opel, languished back at 61 percent in the research results, right in the heart of the ‘less than satisfactory’ bracket. At VW dealers, more than any other, the researchers reported the greatest ‘complete uninterest’ in walk-in car buyers. Surprisingly Lexus, often held up as an example of customer coddling, was at 57, while others at the poorer end of the scale were Fiat, Kia, Saab, Hyundai, Chevrolet (ex-Daewoo), Suzuki and Daihatsu. The last two were at 51 percent, just short of the ‘unsatisfactory’ break point of 50 percent.
Most lacking, concluded Concertare, was a sense of professionalism among the more than 1,000 salesmen that its people met. This is consistent with the findings of my book, Creating the Customer-Driven Car Company. In America salesman turnover exceeds 50% a year, hardly conducive to effective training and development. Yet this is happening at a time when the customer has more time and is being provided with much more information to develop his own ideas about the information he needs to make a car-buying decision. Only an intelligent conversation with a knowledgeable salesman will satisfy the demanding ‘professional customer’.
To fight high salesman turnover, the American car dealer association (NADA) launched a salesman certification programme. Its objective is to train and certify dealer salesmen to give their job more real and implied professionalism. Better professionalism on the part of salesmen helps substantially to improve their rates of success, the dealers believe.
In my view, the system of paying car salesmen a commission tends to work strongly in favour of the needs of the salesperson as a priority over the customer’s needs. One proposal to adjust the balance is that a salesperson should be paid a fixed rate of commission on all his vehicle sales. If he’s paid a fixed amount, whether or not he is selling a new or used car or whether the profit is large or small, he will be selling the car that is best for the customer and for the dealer.
Crucially important in the development of sound customer-satisfying techniques is that any financial rewards offered for good performance are fully compatible with the values that are taught in parallel. ‘Despite all this training,’ says one analyst of dealer systems, ‘most dealers haven’t changed their pay plans and the employees will do what they’re paid to do. The manufacturers are sending two messages and the dealer will always pick the one that makes the most money — incentives are usually stronger than training.’
Coddling salesmen is not the answer, suggests the experience of Longo Toyota, America’s largest car dealer. When they join Longo, salesmen sign a code of ethics which is rigorously enforced. ‘If they lie to a customer, we fire them,’ said Longo president Greg Penske. ‘Our staff are not allowed to smoke or wear sunglasses at work and they have to adhere to a dress code. All these things give the right impression.’
Another successful dealership, Sewell Village Cadillac in Texas, practices balance in its relationships with its employees. ‘Treating employees with respect doesn’t mean you have to be weak,’ said dealer principal Carl Sewell. ‘You can be firm without being rude. We don’t have to swear at people to get them to do something. We ask politely. If that doesn’t get them to do the job, we’ll get someone else who will. After that happens a couple of times, everybody gets the message.’
Whatever the solution, the findings of the Concertare survey must alarm car makers who are relying on their dealers to represent their interests in the intensifying war among both major and minor marques. The basic problems have been known for decades. That no company has convincingly solved them is the clear finding of this research. That’s a devastating verdict on the efforts of car makers, dealers and their organisations to advance the art and science of auto salesmanship.
Concertare’s Dealership Judging Criteria:
- External Impression — customer parking places, presentation of display vehicles.
- Internal Impression — ease of access to customer area, cleanliness, orderliness, greeting.
- Front-Desk Employee — friendliness of greeting, engagement, waiting time.
- Initial Contact — availability of sales advisor, presentation, determination of customer’s desires.
- Discussion Atmosphere
- Needs Analysis — interest in new or used car, what now driving, need for financing, specificity of the advice given and competence of the advisor.
- Quality of Advice — interruptions in the discussion, active offers from the advisor.
- Product-Feature Demonstration
- Progress to Conclusion — sales arguments, discount offers, taking of a deposit, recording of customer details.
- Impression/Behaviour of Sales Advisor
- Test Drive
- Overall Impression
– Karl Ludvigsen
Karl Ludvigsen is an award-winning author, historian and consultant who has worked in senior positions for GM, Fiat and Ford. In the 1980s and 1990s he ran the London-based motor-industry management consultancy, Ludvigsen Associates. He is currently an independent consultant and the author of more than three dozen books about cars and the motor industry, including Creating the Customer-Driven Car Company.
