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Jared Hamilton
From: Jared Hamilton
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Jim Radogna

Jim Radogna President

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I get it. It’s tough out there. Customer access to information on the internet continues to squeeze margins. Dealerships are just trying to make a buck in a fiercely competitive marketplace. You have to do whatever it takes to stay ahead of the competition.

I also get that some may view compliance as unnecessary, overrated, annoying, a waste of time and money, and downright harmful to profitability. These are perceptions and as they say, perception is reality.

Some employees may be tempted to step over the line ethically when trying to make a deal. After all, the chances of getting caught are pretty slim, right? That’s one way of looking at it. Another way is to ask yourself what’s really more important in the long run - flying under the radar or satisfying your customers? In my view, when it comes to compliance and ethical behavior, the true payoff is customer satisfaction and retention. It really comes down to one simple premise - your customer’s perception is the only reality that should matter.

“We have to advertise aggressively and do whatever it takes to drive traffic to the dealership.”
Customer Perception – “I hate the way you advertise. Why is it that the deal is never what it seems? Like when you advertise a car for $7,000 and when I get there I find out that the $7,000 is only the up-front payment for a pre-paid lease and the residual is $11,000. Why can’t you just advertise the real price with no tricks?”

“Customers make ridiculously low offers. If we don’t pack the payments they won’t feel like they got a deal. It’s all part of the game.”
Customer Perception – I hate that damned “four-square” thing you do! It really tempts me to do something uncivilized with your green sharpie. I didn’t come here for a shell game – I came here to give you the opportunity to give me real numbers and perhaps sell me a car. If I didn’t like your car, I wouldn’t be here - why do feel it is necessary to play games with me?”

“If a customer is willing to pay more than the ad price, I’m not going to talk him out of it.”
Customer Perception – “It’s ridiculous that you have multiple prices. Why is it that you advertise one price on the internet and a different price on the lot? Why must I have to try to negotiate down to the price that you have already advertised? I’m not Inspector Closeau – I just want a fair deal and don’t want to be treated like an idiot because I failed to turn over every rock to find your “best” price.”

“Whatever you do, don’t sell the ad car, it’s a big loser. Get the customer down here and switch them to something we can make money on.”
Customer Perception – “I saw an advertisement for a great price so I called you and asked if the car was still available. You told me ‘Yes, c’mon down’. When I got there a short time later, I was told ‘the car was sold last night but don’t worry, we’ll give you a great deal on something else’. Why did you lie to me?”

“The only reason we advertise those loss leaders is to get people on the lot. No way am I going to sell a car and lose money.”
Customer Perception – “I tried to buy a car at the price you advertised in the paper and you told me that the ad was a mistake and the real price is higher. I don’t believe that for a second.”

“We need to close the customer at the highest payment possible so we can make some money.”
Customer Perception – “You told me that the service contract and other accessories were included, but when I read my contract I see that you charged me thousands more.”

“This customer is credit-challenged, she’s lucky to get approved at all.”
Customer Perception – “You told me that the bank won’t finance me unless I pay a higher price for the car and I buy a service contract to “protect the loan”. I’m willing to pay a higher interest rate, but I don’t think it’s fair that I have to pay more for the car too.”

“Your customer’s debt-to-income ratio sucks. We need to give him a raise and hope the bank doesn’t stip for income.”
Customer Perception – “You lied about my income on the credit application and told me not to worry because the bank won’t ask for proof. What else are you lying about? And what happens if the bank calls me, do you expect me to lie to them too? It doesn’t seem like the right thing to do.”

“That’s the perfect car for your customer. Do whatever it takes to send her home in it.”
Customer Perception – “You told me that the car I bought is a ‘one-owner creampuff’, then I find out that the ‘one owner’ was Hertz Rent-a Car! Why did you lie to me? I still might have bought another car from you if you had told me the truth.”

“I’ll over-allow on the trade to make them happy, just close them at this payment.”
Customer Perception – “You told me you would pay off my trade then I found out you added thousands to the price of the car I bought. I would have sold the car myself if I knew you were going to charge me more.”

“We need get rid of those grounded demos.”
Customer Perception – “I was told that the car I bought was new and had a full factory warranty. When I asked why it had 7,000 miles on it, I was told that the manager drove it back and forth to work. Then I found out that a good portion of the warranty was used up.”

“If a customer asks about that painted fender, just say it was key-scratched and repaired.”
Customer Perception – “When I asked you if the car have ever been in an accident, you said it hadn’t. Then my neighbor, who runs a body shop, checked out the car and told me tells me that it’s been wrecked.”

“Let’s just roll the deal. Once they fall in love with the car and show it to all of their friends, they’ll re-write at a higher payment.”
Customer Perception – “You told me my loan was approved, and then you called me back and told me that I need to put more money down and agree to a higher payment or you’ll take the car back. I never would have taken the car home if I knew this was going to happen.”

This article is intended as food for thought. You may agree or disagree. One final thought though - a consumer law firm or attorney general’s perception of the above scenarios probably wouldn’t be pretty.

Jim Radogna
Thanks Jared. If we can get more people thinking about doing business the right way, everyone will win. Thanks for all you do with Driving Sales. You inspire us all to be better!
Gary May
Great post Jim. The opportunity is to get dealers out of the fear and reaction mode in doing business in spite of customers and get into (in many cases back into) doing business WITH customers. Perception is reality but only if you know, care and can act on it. Dealers operate their businesses the same way they advertise, for the most part. How many times does one example (for example) need to be brought up: dealers spend more money trying desperately to attract new customers rather than taking care of the ones they have (or completely ignoring them). Another example: If you believe in the customer and a great experience, then let them know. They will enjoy their time with you and share it with others. Today that means, more often than not, online. Once that happens again and again, the results will be monumental. For the past year, we've seen this one example work over and over and over. It works if you work it, period. But dealers fail to treat the opportunity with respect, let alone process, while failing to treat the customer with respect. Reputation management today is what obtaining emails was 3-5 years ago. What will the majority of automotive retailers tell you (especially away from the East Coast, where reputation management now dominates) when asked if customers will take the time to write an online review? Well, this audience already knows the answer. You can tell by visiting Yelp, DealerRater and the rest. The numbers speak for themselves. If dealers BELIEVE in what retail is about today, the results would be different. Everyone must change the way they do business. And we're damn lucky we've not been hurt as badly as the industry could have been over the past few years. After you thank your lucky stars, go do something positive for your business. Please.
Jim Radogna
Thanks Gary. Appreciate the feedback!
Catherine Edwards
Great blog Jim! One way to be transparent while changing the conversation with the car shopper from price to a more consultative discussion about options is to present multi-vehicle price quotes based on the model and trim requested: conservatively equipped, comfortably equipped and generously equipped.
Michael Midgley
Jim, remember that the salespeople hate these ads as much as the customers. I'm glad our dealership doesn't believe in loss-leaders. The ones I hate the most are the bad credit ads. I think they are a waste of time.

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