TADA

Trillium Automobile Dealers Association

Serving the interest of Ontario New Car
and Truck Dealerships for over 100 years

Car dealership’s success relies on relationships

Published on Friday, 13 April 2012

Sandy Liguori - Tada President 2011-2012

At a recent industry conference, someone asked me a rhetorical question: “What makes for a successful car dealership in 2012?”

At first, it seemed like a simple question, with an obvious answer. Great products and services, coupled with great people and processes, equals success. But the more I thought about it, the less obvious the answer seemed.

Decades ago, it might have been enough to offer popular vehicles and good customer service. Customers always showed up, and when they didn’t, new customers would take their place.

Besides, cars had a life expectancy of only three or four years back then, and if you didn’t like your vehicle, you could replace it within a few years. Today, cars last 10 years or longer. Car shoppers are more discriminating and they expect more from their purchases.

Of course, having great products and great people is an important prerequisite for any dealership to be successful. But nowadays, that’s not enough.

Competition among automakers has become too fierce for one brand to really stand out. A recent survey conducted by the Consumer Reports National Research Centre showed that the perceived difference between the top car brands and the challengers is shrinking.

In a recent J.D. Power and Associates Vehicle Dependability Study, overall vehicle dependability showed an improvement of 13 per cent from 2011, which is the lowest problem rate since the introduction of the study in 1990.

So, with car brands so competitive, what’s the single biggest factor behind a car dealership’s success in 2012? In a word: relationships.

Relationships are the heart and soul of most successful businesses and dealerships are no exception: relationships with staff, manufacturers, partners, suppliers, competitors and customers.

The focus on relationships to attract, nurture and retain customers was born in the 1980s, when database marketing was established to keep track of customers and to tailor services to meet their individual needs.

In the 1990s, relationship building got elevated to an even higher level with the introduction of Customer Relationship Management (CRM) tools. Dealerships (and other businesses) adopted CRM tools to communicate with customers in new and sophisticated ways.

Since the advent of CRM technologies, dealerships have gotten very good at fostering relationships with new and existing customers to ensure their continued loyalty and business. Digital technologies have enabled dealers to learn even more about customers’ desires and motivations.

In my career, relationships that I’ve formed with many great people have helped to propel my businesses forward. I’m proud to report that some of my customers have been buying and servicing cars at my dealerships for 22 years, based in large part on relationships.

In 2012, relationships in business are more relevant than ever, especially with the rise of social media and review-based websites. Today, car buyers have access to more information than ever before, and that information is influencing what and where customers buy.

The old axiom still holds true: a happy customer may tell a few people about a pleasant experience, but an unhappy customer will tell 20 or more people. Moreover, in the digital world, negative messages reverberate everywhere.

If a customer has a problem with a vehicle, or with a dealership, they should contact the general manager or the dealer principal. Most problems or complaints are resolved quickly and fairly.

After you have done your research and are ready to purchase a vehicle, give your local new car dealership a chance to establish a relationship with you. A good relationship will yield many benefits to you over many years of vehicle ownership.


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