Scott Stevenson in Directors and Executives, Customer service, Automotive Managing Director • SearchPath Automotive Recruiting Jul 11, 2016 · 5 min read · +700

Auto Dealerships: What's REALLY behind the curtains?

"I don't trust them.", "I'll take it to MY mechanic", "They're a bunch of sleazy salesmen", "all they care about is getting my money", "every time I go there they want to sell my all kinds of expensive repairs". These are just a few of the comments heard from consumers every day at your average Automotive Dealership. There is, and has been, a deep sense of dishonesty regarding dealerships whether it's the purchase of a new or pre-owned vehicle, having repairs performed or purchasing parts. Why? Dealership customers may not have even had a bad experience themselves yet they are still reserved about trusting dealers and they believe that at any minute they are going to be fleeced. Is that justified? Well, to be honest, yes and no.

Auto Dealerships: What's REALLY behind the curtains?

When consumers think of automotive dealerships, it often conjures up horror stories they've heard through the Internet, or in the paper or on the news. As a dealership Manager, allow me to be your guide to some insight about dealerships. First, all of us know, or should know, that the Internet is a massive "propaganda machine" that runs unrestricted 24/7. Anyone can post anything, about any subject at any time. That does not make it true. I've seen consumers paste anger fueled slander all over the web and have witnessed the very real damage it has caused and the resulting damage control required by the dealership to try and contain any damages.

Think about it. We all know a person, a friend or neighbor, maybe a co-worker or even a family member that complains about everything no matter what. What do you do when these people start spewing their negative diatribes about an awful person or business? If you're like me, you consider the source and let it go in one ear and out the other. Conversely, when you read complaints and negative reviews on the web, most of the time, you take them at their word (myself included) and have now accepted someone's word without documentation or proof.  We all do that.  Ever hear the old term "that's how rumors get started."? We need to remember that there are three side to every story aka review!

Auto Dealers have been wearing a "Scarlett Letter" for decades. The mistrust may have been justified in the past but for the almost 3 decades I've been employed by dealerships, I promise you dealers are not dishonest. Typically they are very large business entities that employ many people in their respective areas and are usually among the largest single tax contributors in their counties. They are a part of the community and its economy and typically lead the efforts for charitable causes. The owners of auto dealerships are some of the smartest, business savvy, hardworking people I have ever known or met. They are very successful business persons that often own multiple businesses. They don’t condone nor even tolerate dishonest acts at their dealerships and should one occur, they deal with it swiftly. These business owners are keenly aware that customers make and break their business and can do so with a quickness. They have zero tolerance for any employee ripping off consumers, "getting over" on consumers or dishonesty of any kind. But Scott you say, if they really don’t like or tolerate poor treatment and dishonesty from their employees then why do we hear about the horror stories?

The horror stories can sometimes be true. Let’s take a look at the why’s!  Have you ever personally made a mistake? Of course you have and the truth of the matter is that you make mistakes daily. (Notice I said you and not me! lol)   Dealership employees are no different than you or I but consumers still expect and demand perfection. Nevertheless, mistakes still happen. The overwhelming majority of mistakes are honest but occasionally they may not be so honest. In those cases the employee responsible has taken that path on his own accord and I can assure you that when that employees unscrupulous business actions are discovered (not if, but when) that employee faces swift and aggressive action and very possible termination. Consumers, in all due fairness, should keep in mind that the character of a business should never be judged on the mistakes of individuals, rather on how that business appears to handle its issues, issues that may affect the very foundation of who they are.

Dealerships and their staff do their best, every day, to operate a customer friendly business with the highest standards in order to build long-term, trusting relationships. Don't you believe for a second that they are willing to allow a customer's concern to go un-resolved. They have every reason to make their customers happy and to keep them coming back. That one visit the consumer pays to the dealership is only a very small piece of the long term puzzle. Dealers need high levels of customer retention in order to survive. Any business can get the "one and done" accomplished, meaning they fleece a customer all at one time as if the customer is not ever coming back..........which, after the fleece chances are that's probably true!!!! Dealerships are keenly aware that retention is the key, whole families doing business with them is key and the cycle of a customer’s ownership from sales to service & parts and then back to sales again is key.

One last thought regarding what consumers say about dealerships. Many consumers make the false assumption or even statement that dealerships are more expensive than anyone else. I have always wanted to address this on a larger scale but have relegated to do so one customer at a time. That opinion of dealerships is absolutely not accurate!  Yes, dealerships make a lot of money and they make no apologies for that; it's big business. However, they serve more customers annually than most other businesses in their area. They hire, employ and train people to be the best of the best in their respective positions so they (the dealer) can rest assured that the customer is receiving unrivaled, personal and friendly treatment. They invest millions in their business to be more aesthetically pleasing to the consumer, and guess what? It works! Tell me this; why do you walk into a dealership to purchase a vehicle instead of going down the street to Joe Blows Used Car Lot? Think long and hard about that. We all want to do business with businesses that are successful. Service Repairs? Think you can get your oil changed cheaper at an express lube? Dealerships are literally losing money to get new customers to come in for oil changes and tire rotations. Most dealers are offering oil changes from $29.95 all the way down to free. Recently my General Manager and I sent out coupons to 9,000 consumers offering a $1.00 oil change. We do that because we want to get consumers in the door so we can impress them and try and establish a relationship. Dealership service operations MUST be competitive on all of the services that the consumer can purchase at the myriad of other auto shops. Where are dealerships more expensive? When more technical repairs are required. These situations require a highly paid, highly trained, automotive Master Technician who, by all regards, is comparable to an electrical and mechanical engineer these days. Did you know that the vehicles of today have more electric modules than the original space shuttle?  You DO NOT want the lube tech or maintenance tech diagnosing or repairing your check engine light? Sure, you can take that check engine light to an independent repair shop and many times they are able to repair it but more often these days they cannot because they are not equipped with the correct tools and equipment nor the knowledge. Then, they tell you to take it to the dealer. Now you've spent money on repairs that did not fix your vehicle and you're frustrated because you're being forced to take your vehicle to the dreaded dealer. No matter what the dealer charges for the repair, it's going to be too much in your opinion. Funny thing is, you would have spent less money had you gone to the dealer in the first place. I've seen so many instances of mechanics from non-dealer shops who call the dealership for help, or they call a dealership technician they know that will help them when they are unable to fix a vehicle. Of course, the consumer will never know about that!  Over and over again, we have customers come to the dealership and tell us that "their mechanic" told them they had to take it to the dealer. My question to them is always "what do we have to do to become "your mechanic"?

I just ask that consumers be objective and fair when dealing with your local auto dealerships. They are located in and a part of your community. They employ many of your neighbors and those employees then reinvest money in your neighborhood. They are built and operate on utilizing good people who build good teams that truly want the best experience for their customers!

I invite all to share your thoughts and your own experiences!



Harvey Lloyd Mar 24, 2017 · #7

#6 I must say of all of my purchases and experiences none have been more gratifying than those experiences on a Harley. The friends the interesting folks and specifically the dealerships have all been part of a lifestyle that is rich in people.

We were out in Utah headed to Idaho (From Virginia), my bike started blowing a fuse that would just shut the bike off, intermittent. Sending someone ahead to buy a bunch of fuses we went over the bike with a fine tooth comb. Couldn't find anything. Sadly i have forgotten the dealerships name but they were in a old potato warehouse in Idaho.

We strolled in and they didn't take five minutes to get my bike back on the rack. The mechanic was a big burly guy and fielded some question from some locals about why we got ahead of them. Big burly guy was not pleasant concerning our distance from home and locals need to call his wife for a diaper change. (They new each other). Three mechanics swarmed the bike and came to the same conclusion, i asked if we could come back and look with them, invitation given and accepted.

We found a wire between the seat and the frame had slipped out of the harness and rubbed raw. The most amazing thing, no charge. I tipped the mechanics the value of the bill.

Harley is amazing.

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Brian McKenzie Mar 24, 2017 · #6

#5 it is spring - I will gin up a post for HD Dealership experience (nearly 10 years in that market)

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Harvey Lloyd Mar 15, 2017 · #5

#3 Maybe a case study in Harley Davidson would help dealerships understand the complex systems of travel and why the dealership offers such a rich experience? HD has been successful in creating the dealership as a destination, seems some recent models of cars have created the same.

Well before long AI will replace the driver and then their will only be mass corporate sales. The age of robotics is upon us.

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Scott Stevenson Mar 14, 2017 · #4

#1 Michael, sadly it still happens but the majority of dealerships and dealers and the people they employ are good and honest, hard working people. A dealer principle makes a "gold mine" of money from his/her dealership and to get over on a few customers for a couple of thousand dollars even is just not worth it and I know from experience that when it happens the dealer principle wants heads to role. "How dare you risk my reputation and my future and that of your do-workers?" is the actual phrase I heard.......... of course addressed to a member of my department at the time who was stealing and charging customers WAY too much! That dealer even let me know that that had better not happen again in my department or I may be the one headed out! He was pissed. As a good dealer should be!

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Scott Stevenson Mar 14, 2017 · #3

#2 Harvey Lloyd I agree with everything you said and inside the business we know that the "Average Joe", or "Jane" if you will does not understand the vehicle and does not understand what we are telling them...........IF we are speaking to them in "industry talk". Unfortunately that is what the majority of customer facing employees tend to do and do not break it down until asked questions. I always trained my teams not to use acronyms and industry specific language.
This article was intended to bring only one side of the issues dealers and customers face when servicing vehicles. Some dealers get it and some don't. Even more dealers are keenly aware of this and say that their people communicate well and in a manner that is understood by the customer when those same dealers have more than likely never been to the Service Lane and listened to their "people". They just assume their message and beliefs carry on down the slope of the management team!

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Harvey Lloyd Mar 12, 2017 · #2

The complexity of an automobile is shear magic when you look under the hood. Many consumers, including myself, have no concept of the digital world that is at work when you drive your car. This is the challenge in marketing the mechanics at the dealership. When the thing a mo bob is diagnosed as broken and its 500 bucks to repair, you have a customer who doesn't understand the concept. A disconnect from the mechanical process in such complex systems.

I don't think you can change this aspect of the perception. I do think that dealers could better tie sales and service together. The salesman should be selling the service at the time of purchase. Sales tends to sell a character attachment while mechanics let you know your character is broke.

Really appreciated your post as you described a very complex social view of dealerships candidly.

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Michael O'Neil Mar 11, 2017 · #1

Toyota New Zealand has just been sanctioned by the commerce regulator (the Commerce Commission) for charging over NZ$500 for a replacement for a key remote. http://www.stuff.co.nz/business/90293847/raging-businessman-takes-toyota-to-tribunal-over-525-key
Sadly, this sort of behaviour is not limited to the automotive industry. My own experience in obtaining a replacement part for a paint sprayer where the replacement part had a similar multiple applied illustrates it also operates in the retail end of the Building Supply industry here.

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