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Jeffrey Schwartz

Jeffrey Schwartz President and CEO

Exclusive Blog Posts

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Is Certified the New “Organic?”

Like ‘natural’ food labels, has the overuse of ‘certified’ lost its power in the used car market?

Once upon a time, a label of ‘natural’ on food products… or anything else, conjured up images of health and purity and assurances that the product was pesticide and chemical-free – but today, with all things natural in vogue and not a standard or regulation in place, the label has suffered from over-exposure and it has become a far less meaningful brand tool for the food marketing industry. Indeed, not so long ago, the same held true for the organic label, until the USDA stepped in with its seal and relatively strict standards for use of the term ‘organic’.  Should certified be getting the same treatment? 

Perhaps. Because today, the same fate is rapidly befalling another over-used term completely lacking in any standardization –the certification label. Everything from security systems to cars can fall under that rubric with absolutely no guarantee of anything… and, taken a step further in the auto industry, the acronym CPO (Certified Pre-Owned) is in danger of the same semantic ignominy.

When CPO programs first came into being, they were extremely limited and only offered by manufacturers – in fact, back then, the term CPO could only be used by manufacturers (and that is still true in some states today); but gradually others, including many in the online space, picked up the idea of ‘certifying’ used vehicles – and today, more and more automotive programs and individual dealerships are trumpeting the term ‘certified,’ with no real accountability. Random and excessive use of the term risks car-buyer cynicism.

But, just as with ‘natural’, there is a good news/bad news component to ‘certified’.  People like and want the concept of natural foods even if they don’t necessarily believe it on the label, likewise with ‘certified’.  It immediately conjures up something that car-buyers want – and data confirms that consumers are more likely to purchase a vehicle if it is certified.

But where will those numbers go if there is no real standardization? If easily thrown together dealership programs - which are little more than shrink-wrapped warranty programs lacking third-party inspection, buy-back guarantees, or other benefits typical of the best OEM programs – flood the market under the CPO banner, then the best programs will lose their power.  In fact, the definitions of certification are so broad that it could mean nothing more than an inspection or a full tank of gas or a certified mechanic with some sort of competency test.

At SureSale we too use the term ‘certified’…because consumers continue to embrace the term and it still retains a halo that is reflective of the solid elements of our program; but we see an impending dilution to the term, which is why we have focused on ensuring program elements that are robust for both dealer and consumer -- and why we are seeking to redefine not only the word certification, but the category as well. If dealers are going to be able to meet the significant opportunities on the horizon as new and used vehicle sales (and trade-ins) ramp up in an extremely competitive sales market that is peopled with ever-more demanding consumers, they must be able to offer substance behind the certified rhetoric.  And that means not just a good warranty program, but multiple elements that reassure the consumer (such as third party inspections, buyback guarantees, service contracts, vehicle history reports, pricing information and so on) -  elements that adhere to a strict consistent standard that is the same whether the consumer purchases in New Jersey or Arizona.

While we may never be able to move CPO beyond ‘natural’ into a USDA seal of approval, at SureSale, we are doing our best to shift practices across the industry, which, in the end, will provide not only greater consumer likelihood to purchase, but greater profits for dealerships.

 

 

 

 

Follow me on Twitter @jeffreysuresale

http://jeffreyschwartz.com/

 

 

Jeremy Alicandri
Despite all the terminology jargon, OEM CPO programs must offer value to the used car buyer otherwise they are as useless as you implied.

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