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Dealerships Are on The Front Lines When Problems Occur
New auto dealerships are not unlike many retail environments ? we make a living by selling products and services to customers who visit our stores. Throughout the course of an average week, there are plenty of interactions with customers.
In a perfect world, each of these interactions would go smoothly: customers would purchase cars that are free of defects or malfunctions; dealership staff would have stress free days; auto manufacturers would be thrilled that we are moving a lot of inventory. These totally satisfied customers would recommend their dealerships to friends and family members.
Alas, we do not live in a perfect world, and it?s a fact of life in our industry that problems will occur. The task of addressing most of these problems, inevitably, falls on the dealerships, which bear the brunt of customer dissatisfaction.
Dealerships don?t engineer or manufacture the vehicles, but we are on the front lines when problems occur. We take the bad with the good. We are expected to find solutions that are fair to the customers, the dealerships and the manufacturers. Yet, our profits on the sales of new vehicles often do not cover the time and resources required in finding solutions to all problems. For example, on the sale of a brand new $25,000 vehicle, the car manufacturer gets approximately $24,000 of your hard-earned money, and we receive approximately $1,000 (roughly 4%).
A service customer will sometimes ask: ?I know my car is out of warranty, but have you seen this ball joint problem on other cars of this model?? If we answer ?yes?, then the customer will suggest that it?s a common manufacturing defect and insist that it should be repaired at no charge. If we answer ?no?, then the customer will tell us that this car is a lemon, and because of this, the repairs should be free of charge. Sometimes, it doesn?t matter what we say, we cannot win.
Although dealership staff will often sympathize with a customer?s request for compensation on a vehicle that?s out of warranty, the staff must be cautious of what is said to customers. If we agree that a customer deserves assistance, that customer will inevitably convey our comments to our manufacturer: ?Even the dealer says that I should receive assistance with my request.?
In other cases, a customer will urge us to contact the manufacturer directly on his/her behalf. The assumption here is that our relationship with the manufacturer will generate a more favourable response for the customer.
If the dealership does contact the manufacturer on a customer?s behalf, it?s all too easy for the manufacturer to tell us to inform the customer that no assistance can be offered as his/her car is beyond the warranty coverage. When we convey this bad news to the customer, we are perceived in a negative light, even though we are simply the messengers in this situation.
At times, customers will contact the manufacturers directly in order to plead their cases. Surprising to the consumer, but not to the dealer, a customer?s call to a manufacturer is, almost always, more effective than a dealership?s call.
If the decisions were up to us, we would love to help every customer who has a problem, by directly invoicing the companies that build the vehicles. This would avoid a lot of stress for customers and for dealerships.
However, consumers need to understand that the manufacturers are our bosses. They call the shots, and we can?t tell them what do to. We don?t always agree with their decisions, and we don?t particularly enjoy conveying bad news from the manufacturer, to our customers.
Please keep in mind that dealerships are on your side ? we really are. We want to sell you vehicles that run problem-free, and we want you to drive away as happy customers. After all, happy customers are the foundation of our future success.
Ken Shaw Jr. is President of the Toronto Automobile Dealers Association and is a new-car dealer in Toronto. E-mail comments to president@tada.ca
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