Why everybody loses

DrivingSales detailed the customer dissatisfaction and unpleasant experiences in a recent post.

AutoTrader provided an exceptional example which really drives this point home. According to their news release: Lynn V., an avid online car shopper, drove this point home in a recent conversation with AutoTrader.com where she said, "I went online and narrowed it down to two different dealerships. One was very good about communicating with me via email, was explicit in putting out an offer—very detailed. [They] included a price in the offer and invited me to the dealership. The other dealership, which actually had my first choice of color "wouldn't give me specifics in email."

She continued to try and work with the dealership that had the exact vehicle she wanted, but they would not communicate with her effectively the way she wanted, and her in-store experience led to her decide against doing business with that dealership:  "I will never go to that dealer again, even though they were probably 40 miles closer to my house. I was willing to spend the time and make the drive for a dealership that honored its word and treated its customer right."

Lynn V's frustration that her local dealer would not share detailed pricing information illuminates why dealers continue to resist online retailing. Dealers price people, not products. Their goal is to maximize the profit from the sale of a car, trade-in value, financing and aftermarket products for each customer. This means sharing as little information as possible and 3 to 4 hours in the dealership. While adequate pre-internet, this process is the root cause of declining dealer profitability. Customer and employee loyalty both average around 25%.

Stated in a more pragmatic way, customer churn (customers who buy the same make vehicle but from a different dealer) and salesperson churn (on an annual basis) both average 75%! The current sales/purchase experience isn't working very well for either side!

Dealers embracing the internet (or just encouraging you buy a car online) would significantly increase their profitability, and more importantly, customer loyalty and satisfaction.

repost from vinadvisor.net; not written by me