Page 14 - GIADA-Feb-2018-Final

SALES

Car Dealers, Be Like Southwest Airlines,

Not United

By Aaron Krane
From the notorious forcible removal of it, like United. Embracing transparency is When you embrace transparency, you build
Dr. David Dao in April, to revoking a good for business. It fosters brand loyalty trust. Once you’ve done that, customers
two- year-old toddler’s seat in June, to and increases profitability. will be more likely to add accessories,
four blown tires on a Newark landing in upgrades, extended warranties and service
November, it’s been a difficult year for Southwest has embraced transparency from packages.
United Airlines. Its lack of transparency the start in spite of industry norms. With
in handling these incidents has only made campaigns like “Transfarency,” it continues More than 80% of people say trust is the
matters worse. to increase profits and brand loyalty. It most important factor in earning loyalty –
has operated profitably for 44 consecutive even more important than price, quality or
It’s no surprise the stock price is down, but years, an impressive feat in an industry that convenience in making purchases.
it’s not just because of this year’s incidents. has been plagued by bankruptcies and other
challenges. In contrast to United’s 6.5% It’s not just buyers. When management is
Despite being a leading U.S. airline, United forecasted long-term decline, Southwest’s open and communicates well with staff,
has been struggling with decreasing long-term forecast is 10.5% growth. It has employee engagement and trust increases
revenue and poor operating margins for produced greater earnings than United in as well, decreasing turnover and improving
years, and it is projected to decline 6.5% three out of the last four years with only performance.
in the long-term. In reality, much of the half the revenue.
poor performance and reputation can be Collaboration between departments helps
attributed to a chronic lack of transparency A study says 94% of customers will be staff members see the big picture, enabling
and the resulting erosion of consumer more loyal to a brand that offers complete them to work more effectively towards
trust. transparency. Dealerships that embrace it achieving common goals.
will gain an advantage over the competition
United is by no means alone in this and be rewarded with more loyal customers Learn from Southwest’s example and
regard. For decades, airlines have resisted and increased profits. incorporate more transparent practices
transparency, using hidden or add-on fees into online and offline operations, across
for checked bags, flight changes, in-flight How does a dealership embrace all departments. Doing so builds trust,
entertainment and other amenities to line transparency? Does it offer realistic pricing increases brand loyalty and drives better
their wallets. and payment information online? Are business results.
the Internet, F&I, and sales departments
But the market is changing. Customers collaborating to deliver the best-possible Improving the customer-retention rate
crave transparency. With more access to customer experience? by just 5% can increase profitability by
information than ever before, they will as much as 95%. Loyal customers spend
find it, even if businesses don’t provide it. Offer the information customers seek in more, shop more often and refer new
a way that fosters trust. Ensure staffers customers.
How Dealerships Can Learn from communicate consistent messages to the
United’s Mistakes customer. It’s easy to see from Southwest, positively,
and from United, negatively, how much
Much like the airline industry, automotive Engage buyers online with a completely transparency matters. So embrace it.
retailing has a history of resisting native experience. A website or Customers and staffers will thank you and
transparency. Many dealerships still list e-commerce software shouldn’t redirect your business will thrive. n
only MSRPs online, despite the fact that users to third-party websites or competing
embracing transparency by providing experiences. Aaron Krane is the CEO and founder of
realistic pricing online actually increases Drive Motors, which offers dealerships
total gross-profit per car by $785. Customers are more willing to trust you e-commerce solutions and online buying
when a website offers transparency, which tools.
Dealerships should embrace transparency, can be achieved through realistic pricing
like Southwest, instead of running from and a native experience.

12 | GIADA Independent Auto Dealer FEBRUARY 2018