OEMs: Give Dealers More Autonomy!

While the automotive industry has seen massive technology changes in the last 5 years, there is a continuing trend where some OEMs partner with specific vendors and then take away the freedom of choice for forward-thinking dealers. Mandates are enforced where franchised dealers must choose between 2-3 vendors for a particular solution.

This practice can be very frustrating for dealers – especially any that specifically wish to think outside-the-box, be innovative and try new things. I have heard of some dealers that have vendors they are forced to use as a packaged deal with multiple solutions, some of which they don’t wish to use. There are even dealers that pay twice. Once for the vendor solution they are forced to use, and once for another solution which they prefer for their individual dealership. This ties up their budgets and effectively handcuffs dealers to vendors, preventing them from trying new solutions.

In my opinion, things would work better if manufacturers would allow dealers to choose which solutions are the best fit within their marketplace and audience. I would rather OEMs set up benchmarks that need to be achieved with very simple measures, but with high standards.

Here’s a simple yet radical thought – get rid of the 15 questions you ask every customer in your surveys. How about just focusing on the Net Promoter Score (NPS) for the dealership? Set the bar high and ask one question, “Would you recommend the dealership to your friend or colleague based on your service experience?” I guarantee this would work better than the current situation where OEMs choose solutions which target different actions such as web-based appointments. Instead the focus should be on the NPS score.

This would avoid the “one solution fits all” model for dealers, and would allow forward-thinking dealers to customize their approaches. A case in point, every manufacturer is going after tablets in the lane. Well, I know of a franchise in Santa Monica where on Fridays a car rolls in every 2-3 minutes and they only have space for 6 cars in 2 lanes. They simply cannot check people in using a tablet and allow the customer stay in the car while that is happening. Instead, they have to use porters to whisk the car away and then walk the customer over to their office to check them in. If you jam this dealer with a tablet, and if it does not keep the cadence of a 1-2 minute check-in per car, you are going to create a backup on the already jammed streets of Santa Monica.

Technology changes so quickly that an impenetrable partnership which forces dealers to use one vendor over another can restrict progress, growth and sales. Freedom of choice and outside-the-box thinking is what fosters innovation and then true game-changing can begin.

What do you think, should dealers be given more autonomy to choose their own vendors?

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