The dealer’s role

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Despite product differentiators, more responsibility for the customer’s overall brand experience must lie with the dealer and automotive brands are ultimately reliant on their dealer networks to manage customers’ in-store buying experience from start to finish.” –Fabrizio Arena, senior manager, Arthur D. Little’s Global Automotive & Manufacturing Group

There’s a new study out from global consulting group Arthur D. Little about the critical role car dealerships still must play in sustaining the global automotive market – but there’s a lot in here that I think heavy truck dealerships and their customers might find interesting, too.

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According to the group’s new study – entitled “Delivering the Brand” – nearly 80% of all car purchases are still done face-to-face, and the report’s author, Fabrizio Arena, warns that as the global automotive industry faces a growing number of new competitive pressures, OEMs must develop dealership management initiatives to ensure their retail networks are building and reinforcing brand loyalty from the test drive through to after sales service.

"Dealerships have a major role to play in delivering an excellent brand experience that will attract new customers and retain the existing base,” Arena said. ““Customer satisfaction is an urgent concern for OEMs looking to move ahead of their competitors in an environment where simple survival is every brand’s primary objective for the year ahead.”

He also noted that one local dealer his firm worked with not only improved its customer satisfaction performance by approximately 16% in a single year, it helped the car brand they represented move up several places in the New Car Buyers’ Survey, a key industry benchmark.

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OK, so what does this have to do with trucking? Car buyers, as we all know, are a lot less brand loyal than truckers because they simply don’t rely on their vehicles for their livelihood to the degree a trucker does.

[Photo courtesy of Christopher Ziemnowicz]

That being said, I know from my own experience in talking to fleets and owner-operators that many are loathe to consider making a brand switch if they are getting good product reliability and service, no matter the sticker price savings. Yet I also know service means a tremendous amount to truckers – and woe to the OEM or dealership that stumbles in that regard.

Let’s face another reality – very unpleasant levels of pressure are being applied to the bottom line of OEMs and their dealers from all directions. With 2008 new car sales having reached record lows in most developed markets, global automotive companies are under more pressure than ever to avoid collapse, noted Arena in his report, with a bevy of other issues banging away as well: regulatory pressure on carbon dioxide emissions, tougher international safety standards, high oil prices, and changing customer lifestyles, just to name a few.

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Competition amongst global players has been pushed even further as a dramatic increase in overall vehicle quality over the past decade had progressively weakened the role of the product itself as the key differentiator, said Arena, so dealerships are going to play an ever more critical role in attracting and retaining customers from now on.

“Ensuring results and investment decisions are consistent with customers’ expectations and its dealerships’ capabilities are key to implementing an effective global brand strategy that will reinforce the products’ desirability through a positive customer brand experience,” he said.

"To be successful, a global customer satisfaction improvement program for the automotive industry requires a clearly defined relationship between the OEM headquarters and its local [dealer] branches,” Arena added. “Defining roles and setting consistent, measurable targets will allow local branches to adapt the corporate brand strategy into the local market context in a meaningful way.”

I’m sure heavy truck OEMs and their dealers can relate to these issues in a big way.

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