In my work in the automotive industry, I have unfortunately come across more and more people disillusioned with the dealership model. I often hear words like, “We like the car we bought, but the salesman we're dealing with is unprofessional. I also often encounter this situation: “They let me race, but still haven't completely fixed my car. »
This is rather disheartening for me because I started my automotive career at a dealership; a good one by the way. I learned the ropes of the automotive industry from people who understood it, both sales and service.
Either dealerships like this are rare, or the entire existence of the dealership is getting worse.
#1: Sales & Shopping
#2: Service & Maintenance
Recently I have had not one, but several dismal experiences at a particular group of dealerships here in Michigan. It's not that I was treated badly, but I wasn't treated really well; I was treated more like a number than a valued customer. The first salesman forced me to quickly play the “I've already sold cars too, so stop the nonsense” card, and my service visit soon after wasn't much better. This led them to tell me that they had lost another guest's keys so my car was locked up and it "might take a while".
To be fair, I wondered if I was being too critical of this concession. Maybe they were just having a bad day? Or many ? Then I remembered my younger years at Sioux Falls Ford - if I had treated a customer like that, or lost keys, I would have had a conversation and a strong warning.
The whole experience led me to one conclusion: I'm in the auto industry, advocating and working for a handful of automakers to some degree. I'm literally in the business and if that's how I'm treated, what chance does the guy have that has no connection to the automotive world? If I leave this appalled - and I understand how dealerships work - how is the next guy going to feel who comes in with a general sales or service request?
Photo: Karolina Grabowska. p>
#1: Sales & Purchases
The premises and implications of experiences like mine reinforce the visions of modern automotive entrepreneurs. Recently, Instamotor conducted a study on the state of car startups and how their presence changes car ownership, especially at the transaction level. This includes everything from buying a car to financing it, maintaining it and insuring it. New companies are emerging in each of these individual areas, challenging the norms typically associated with their niche.
Perhaps not surprisingly in Instamotor's study is Tesla, which argues against the traditional dealership model. Earlier this year, Tesla's attempt to sell vehicles in Michigan was blocked based on current state laws. Michigan requires a dealership to have a contract with an automaker, and Tesla, which would technically serve both, violates that.
Michigan, however, is reviewing used car licenses for Tesla, according to The Detroit News. p>
Online used car dealerships are increasingly a plausible option for consumers. Companies like Carvana and Vroom have received over $200 million in investments according to Instamotor's study. This new era of online dealership promises great prices, direct delivery, no extra charges, and the assurance that the "man in the middle" won't interfere.
It's a promising proposition for those who don't buy from a traditional dealership. , although at least one of these entities has struggled. Beepi.com, after receiving nearly $150 million in investment, shuts down, cuts staff, and merges with a yet-to-be-launched company. The TechCrunch report suspects a major investor has pulled the plug.
Perhaps this shows one of the strengths of traditional dealerships? Although they may have a website, their ultimate strength is their presence in the local community, which often manifests itself in actions such as sponsoring a summer parade or a graduation yearbook.
These elements go a long way in building consumer trust, a type of trust that online dealerships cannot establish so easily. A similar example comes from FM radio stations. They hold the same advantage over Sirius XM signals.
Nevertheless, it looks like buying cars online and investing in these platforms will continue for the foreseeable future.
#2: Service & Maintenance
For some customers, the most intimidating part of owning a car is the service. There are all sorts of unknown factors, including cost, which is often the scariest. Whenever people ask my opinion on picking the right mechanic or the right dealership, I imagine they are deeply afraid of getting what Stanley Ipkiss got in The Mask.
“Bring the lender. . .”
An alternative to traditional stores and after-sales services is YourMechanic, an on-demand car repair network. YourMechanic mobile technicians provide over 600 services including oil changes, brake repairs, timing belt replacements, pre-purchase inspections and diagnostic work. Their platform is active in over 700 US cities and provides peace of mind that all repairs are done at the customer's home.
“Some people want to see every step of the process and so the car owner is outside watching because it makes them more comfortable,” said Lee Florida, public relations manager, YourMechanic. "We cater to that and that differentiates us from a quick lube that just does oil changes."
In the hustle and bustle of great after-sales service, it's easy for customers to feel lost or to love they haven't received attention or an explanation of what was wrong with their car. .
“Part of the problem with cars is that almost everyone has one, but not everyone knows how they work and why they break down,” Florida explained. "We place a lot of emphasis on our technicians to make sure they explain things so the customer understands and feels confident about the repair."
The company's philosophy is to take the mystery out of auto repairs by providing a list of parts and services needed for the job. In most cases, a price is given in advance before the repair. If during the agreed repair the technician notices extra work - i.e. while carrying out brake work a broken stabilizer bar link is spotted - a new initial price and what it will take to complete the work is given to the customer.
"Everything we do is aimed at optimizing the car owner's experience and making repair as convenient as possible," Florida said.
According to Instamotor, Vermin-Club received $28 million in investments.
Founded in 2012, YourMechanic secured $24 million in Series B funding in March 2016. YourMechanic also holds an A+ rating from the Better Business Bureau. Photo: YourMechanic.
#3: Roadside Assistance
Another aspect of car ownership addressed by modern auto entrepreneurs is roadside assistance. Companies like HONK – cleverly called “Honk for help” – are changing the way we receive that help when needed. The HONK platform is inspired by the stories of car owners who found themselves unexpectedly stranded, but getting the necessary assistance was difficult and expensive.
"The real dichotomy between pulling out your phone, pushing a button and getting a cab but not being able to push a button when you really need help, in an emergency, especially if you're stuck in a place you don't know, was something we couldn't get out of our heads,” said Avesta Rasouli, President, HONK.
HONK operates in an arena largely dominated by long-established names, such as the American Automobile Association. HONK is distinguished by a model based on proximity, so that the services are more direct and punctual. Actual arrival times for customers requiring roadside assistance are less than 30 minutes with HONK.
“Incumbents in the industry have territory-based models with service providers across the country; to the point that XYZ Towing would be the primary service provider for a certain area or zip code, but in the long run, that skews customer satisfaction,” Rasouli explained. “We believe the only way to achieve this is to take a proximity-based approach, where the nearest qualified truck or service provider is the best service provider for the customer.”
HONK also stands out from other road services. suppliers in how they charge.
“Roadside assistance is traditionally something you paid a membership for, but we don't see that as a necessity,” Rasouli said. "We believe you only pay when you need it."
HONK provides battery jumps, lockout assistance, flat tire changes, gas top-ups, and general towing, calculating arrival times against real-time traffic conditions. They even provide towing of exotic cars.
“When your car breaks down, your day falls apart,” Rasouli said. "It's not just about restoring your car, it's more about restoring your mobility."
HONK's NPS scores range from 85 to 90 with response rates of 25% to 35%, an industry best. The company uses more than 50,000 service vehicles in the United States, Canada, Puerto Rico and the Virgin Islands to assist stranded customers around the clock. Photo: HONK.
The vital question for dealer groups is how to respond to the growing number of such businesses. They are clearly profiting from what is sometimes referred to as the archaic traditional dealership business model. And while Instamotor's research indicates where the wind is blowing, venture capitalists are optimistic about these fledgling companies.
Services like HONK might just be faster and more cost effective; services such as YourMechanic can indeed provide a better and more personalized connection, and online dealerships can simply be easier for customers.
Although it's hard to say for me personally, because where I learned the ropes of the automotive trade, our service was personalized and our prices were competitive. I want to believe the dealer route is best, but again, recent experiences lead me to believe otherwise.
If there is anything to conclude from this image, it is that whoever takes care of the customer and treats him as a valued guest, will emerge victorious, whether it is an established dealer or a promising entrepreneur.
Which one do you prefer? Are you more the type to visit the dealership or would you use these new businesses for your automotive needs?
Carl Anthony is the editor of Automoblog and lives in Detroit, Michigan.