Being essential to your customer: How to give your car dealership a bounce

During these unprecedented times when our robust consumer economy has abruptly changed, all business as usual is out the window. While our government has named essential and non-essential enterprises, all going concerns need to re-evaluate their reason for existence during this time. When coaching business leaders to write a mission statement, the father of management Peter Drucker used to point out the most important question that companies can ask themselves is "what does your customer find valuable?" because "the purpose of business is to obtain and keep a customer."

This post is written with car dealers in mind. However, the principles apply to all enterprises that have been disrupted by the current shelter-at-home situation. Whatever we individually choose to believe about it, the reality is that as business leaders our operating assumptions have changed dramatically, and for some maybe permanently. Consumers are now home bound for their own safety. They are already conditioned to order online for most shippable consumer packaged goods and increasingly groceries. Major retailers like Walmart and Target have created robust online ordering experiences with easy pick up at their local retail locations. Yet the car dealer community has mostly stayed away from this concept. Now dealers that expect to thrive in the service of their customers must create and promote easy-to-follow online ordering processes for service, parts and cars.

Local dealerships provide, support and service basic transportation needs for all communities. Those include fleet maintenance for essential public services of all types as well as legitimate individual transportation needs. In talking to auto dealers, I have learned that it is unclear what should be done during this time. A few have shut down completely. Either the reality of the economic shock pushed those with marginal profitability over the edge, or they believe that shutting down is the prudent thing to protect employees. It is unclear whether those employees are being paid. The majority of auto dealers seem to have closed the sales departments and kept service and parts open with skeleton crews. If our new state of affairs lasts for a few weeks this may suffice. However, if weeks turn into months it is completely appropriate for auto dealer leadership to ask Drucker's question of themselves; "What does your customer find valuable?"

During the last two decades, Ebay, then Amazon revolutionized ordering online and shipping. Both have clearly disrupted auto parts with their entries but not car sales. Another early entry, CarsDirect.com, visioned a consumer ordering their vehicle online and having it delivered to their home on a flatbed truck. The auto dealer community, threatened by the new and innovative competitive entry, fought CarsDirect tooth and nail citing violation of franchise laws among other things. CarsDirect delivered on the promise of online ordering for a short time but never profitably or at scale. CarsDirect still exists because their shrewd and disciplined leadership revisited the Drucker question and pivoted to a different model to service other pressing consumer needs profitably. As it turns out the CarsDirect original concept of an online transaction with home delivery is now an especially important value proposition.

Some car dealers will do online scheduling and home delivery for service. My local Lexus dealer will dispatch a loaner, pick up a car for service and return that serviced vehicle to their customer later that day or the next day.

Online ordering and home delivery is a service whose time has come for auto dealers and most essential consumer products. How to fulfill that need is going to be different for every franchise dealer. Each has its own economic reality, constraints, competitive structures and market demand levels. However, one thing is clear. Car dealer customers and prospective customers are staying at home, ordering online and taking advantage of home delivery now more than ever before. Even if we experience the most optimistic economic bounce after the current shelter-at-home episode, consumers will increasingly adopt an order-from-home habit and some dealers will fulfill that need at the expense of those who don't.

In closing, yesterday I did a search in my area for online ordering and home delivery of parts, service and cars. I am in Southern California which is the largest car market in the world. I found a handful of dealers that could fulfill an online order. It was enough to get mostly what I would need, but a scant few. In some cases, I already knew that a dealer had online buying and delivery tools, but they did not show up in a search and were buried so deep in the business website that I needed to use the site map to find my way to the page. This left me scratching my head. If a dealer has already adopted online tools, trained their staff and created a process for consumers, why during these extraordinary times aren't they making it a primary feature of the website that can be easily found through search engines?

These unprecedented times have created much uncertainty as we move forward together. There is one thing for sure. Dealers that thrive in the service of their customers will create and promote easy-to-follow online ordering tools for service, parts and cars.