What Happens in Vegas . . . 

I recently attended the Remarketing Conference in Las Vegas.  It was held at the Red Rock Resort, which is an incredible Hotel and Casino.  Everything is done first class and the staff  at the hotel is amazing.  They work very hard to provide a great experience for their guests.

I started thinking how the experience is becoming more and more important every day and was looking at the auto buying experience in the  way the hotels look at treating their guests.  There are always lots of conventions and conferences in Las Vegas.  Room rates are all over the board, so what drives visitors to stay at one hotel over the other.

If there is a conference in the hotel, it’s convenient to stay there. But what if there were a hotel just 5 minutes away that was half the price of the conference hotel and it had comparable amenities.  That is, both had nice comfortable rooms, flat screen TV’s and a generous size bathroom.  Here is where the little things start to  matter in the buying experience. If a hotel changes just a few little things could it have a major impact and be a powerful differentiator from the competition?

In a car buying transaction the prevalent thinking is the dealer with the lowest prices gets the deal.   However in this new day, with fewer dealers, fewer cars and higher transaction prices there is pricing parity between competitors.  Auto retailers have told the public in a loud and repetitive way that they will meet or beat any price in the market.  So when a buyer sees the ad in the paper for  that $299 payment, they know any dealer can meet that deal.  Again at this point the little things start to matter.  Consumers look at convenience, reputation, inventory, trade-in values, etc. All these things and more will influence where consumers shop.

What will drive prospects to YOUR store?   Do you really think it is because you have a “low” price in your newspaper advertisement?  Will customers avoid your store because you don’t have a brand new showroom?  Some manufacturers think an older showroom without the latest in showroom furniture and technology  is hurting sales.

A clean, updated and neat showroom is important, but I believe most car buying consumers know the difference between buying the car and buying the showroom.   Customers want a great buying experience. That might mean a competitive price, some added value, and a fair price for a trade-in.  Notice that I did not say they always want the “best rock bottom price you can provide.” Our industry is not losing sales because a retailers showroom is a bit dated.  And if it is, they often don’t need a million dollar new showroom makeover, just maybe a cosmetic makeover costing substantially less.

I think manufacturers and auto retailers would be much better off if they worked together to develop a customer friendly buying process.  At my recent conference in Las Vegas I spoke with an executive from one of the luxury OEM brands about customer satisfaction.  He admitted to me that manufacturers will often ignore a dealerships’ CSI rating if they are selling a lot of vehicles. I have a feeling that is probably the case at many of the OEMs but I wonder if that policy is actually doing more harm than good to the brand.  And if just about everybody in the industry knows factory CSI programs aren’t fully transparent, why haven’t we modified the process to really achieve a true CSI goal?

Let’s return to my recent visit to Las Vegas. As I indicated most of my experience was great, that is until it came to the Internet access.  The hotel charged a daily resort  fee of $28 which I was told included Internet access.  These days I travel with a wi-fi enabled smartphone, a tablet pc, and my laptop.  I logged into the hotel network with my phone and then was getting ready to logon with my tablet pc, but something made me call the front desk to confirm all my devices could access the network.  I was told the $28 fee was for only one device, and that each additional device is $14 a day.  So if I used each of my devices each day I would be paying $56 a day for Internet Access.  I felt that was a bit excessive even for the Red Rock Resort.  So in the end, while most of my experience was great, I focused on the one negative and it soured my entire stay.   At this point I must say,  that when I told the front desk that no one explained I would have to pay for multiple devices when I checked in they did waive all the fees for my additional devices during my stay.    But what about the other guests and conference participants who didn’t ask and just got hit with the fees?  How much ill will  was created by this policy?

We know their actual cost for guest Internet  access is less than $5 per day, so why wouldn’t they tout the fact that their “Resort Fee” includes Internet for all the devices of the guests.  After all you can only use one device at a time anyway.

Are we doing the same thing with the auto buying experience?  A consumer goes to the local dealership to buy a great car, then all the surprises start popping up.  Additional fees, dealer add-ons and the trade-in game.  I know it’s not easy being a car dealer these days, and even tougher making a profit.  Auto dealers are being squeezed by the manufacturers on one side and consumers on the other side, and then sales and service people at the store are trying to make a living. It gets very challenging on a daily basis.

If only OEMs encouraged dealers to provide a great experience, updated their CSI programs, started treating dealers as trusted partners, and built stronger relationships our industry would be light years ahead in building a better reputation and we would attract and retain true professionals in our industry.

 

Mark Dubis

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