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Mike Gorun

Mike Gorun Managing Partner/CEO

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Transparency: The Key to Customer Loyalty

An associate of mine recently told me an interesting story about their 75-year-old father, who purchased an import, rather than a domestic vehicle, for the first time in over 60 years. This was sometime around 2010.

When it was time to replace his domestic minivan, the first thing my associate’s father did was to check the Sunday paper to see in any big sales were happening. His preferred domestic dealer had an ad that mentioned vehicles listed online. He then got on his computer to see their inventory. However, while online, the import dealer managed to conquest his business away from the domestic dealer, offering more detailed inventory and transparent pricing information.

While online he saw several detailed photos of new vehicles on the import site, but just a red-X-in-a-box next to most of the domestic dealer’s new inventory -- the same domestic dealer that had drawn his attention to their website by bragging about their HUGE online inventory in their newspaper ad. He was impressed with the basic price break down on the import site, compared to the words: “CALL FOR PRICE” on the domestic dealer’s website. He chose to contact both dealers, and ended up at the import dealership in a matter of hours. By the time the domestic dealership called him, there was a brand-new crossover sitting in his drive way.

I’m not sure exactly what the import dealer did to get on his radar, but once they got him, they blew him away with such an impressive shopping, purchase, and follow up experience, that he never looked back.

He continued to be impressed with the import dealership during the two years he owned his first import model, due to the consistent level of contact, service and ownership guidance they provided. Once he acquired a bit of equity in his vehicle, he was even more impressed when offered a new model, at a comparable, if not lower, monthly payment. In fact, he ended up purchasing two more vehicles from that same import dealership.

He left the domestic dealer he had loyally conducted business with for decades, and is now fully and continuously engaged with the import dealer. He even managed to convert a few of his friends from die-hard domestic shoppers to at least visit the import dealer that treats him so well.

My associate was shocked the first time he saw his father behind the wheel of an import vehicle, so different to what he had been loyal to for his entire life. He had thought that his father would never in a million years even consider a “foreign” car, let alone transition from a minivan to a crossover. 

That experience was a real wake up call for my associate. It taught him a valuable lesson about the importance of transparency when it comes to retention, not just for millennials, but also for non-millennial generations. Millennials, Generation X, and Baby Boomers all research purchases, and have the same appreciation for transparency.

The ease my friend’s father enjoyed with this import dealer is enjoyed just as much by every generation, just as every generation shops and researches online. Transparency is an important part of every generation’s decision making. It is in fact no more a marketing fad than the internet itself!

Consider this story the next time your dealership votes against advertising price, or chooses to do the whole “Get ‘em in” routine. Consumers know that game and simply choose not to play it any longer. Ignoring consumer demands erodes trust and could easily push loyal brand – or dealership – customers towards your brand competitors.

Scott Larrabee

Mike, great story. I work in a store where we have two great "foreign" brands under one roof, Honda and Nissan. I see this all the time at our dealership because our GM adopted a very transparent way to do business about 5 years ago and has only continued to improve overall dealership efforts to be easy to do business with! Dealers with loyal customers are losing them all the time to dealers that have their eye on the ball and understand that for the majority of consumers today, the shopping experience begins online. The strength of your online presence is more important today than ever before, along with offering a friction free, transparent experience! 

Mike Gorun

Thanks for the comment, Scott!

Doug Caywood

Great reminder Mike and, you're right, it's not just the automotive industry. Was just looking at a rep mgmt site, clicked on "pricing" and ended up with a "learn more" button. We consistently advise our clients to be transparent especially regarding pricing.

If you have a good funnel then, all along the way, your customer/guest should be learning "why you're worth it"...Race To The Top!

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