One of the biggest problems facing retail automotive dealers in the information business landscape is that they spend most of their time being reactive. If we are being brutally honest retail automotive dealers have probably always been reactive as the post-industrial business model was all about sitting around waiting for things to happen (SAWFTH pronounced like forth); SAWFTH is a characteristic of primary marketing areas and a world where local advertising generates enquiry, there’s not much you can do differently.

With the shift to the information business landscape we run the risk of losing customers completely and having to deal with buyers in everything we do if we ignore the empowerment of the customer in this new world and continue to SAWFTH.

With the growing number of professional “aftermarket” servicing organizations and the inability of (or lack of direct focus by) the manufacturers to deny warranty to buyers who don’t use dealer-based servicing it is conceivable that brand purchase within primary marketing areas will not even guarantee the dealer the service business of the car owner.

I know that currently these “non-dealer-based” service operations cannot provide warranty service or carry out warranty repairs but is this enough for a retail automotive dealer to disregard this threat? Will manufacturers continue to adopt this “dealer only” warranty position, will statutory and regulatory requirements allow this “restraint” in trade to continue, is the gamble that it will enough?

If the trend that is moving customers to buyers continues (I would stress that this is not a problem specific to the retail automotive industry, just about every industry is exposed to and effected by the Information Revolution) you can see a time that a dealership structure might become redundant.

You could be forgiven for thinking that the difference between a customer and a buyer is just an exercise in semantics but in my world they are quite different;

• a customer – is someone who has a continued relationship with the business. They have established a position of trust and comfort with the business and may have established customer value propositions that see familiarity with and confidence in the business more important than cost, a customer is likely to continue to be a customer; and,
• a buyer – is someone who is looking to purchase or consume a product or service and is prepared to seek out a product or service provider and would be likely to deal with that provider without any care or concern to the trust and comfort issues a customer might consider important, a buyer is unlikely to become a customer.

If you accept the two definitions then you would probably agree that we need to create and nurture customers. If so, why is everything we do in the retail automotive industry in 2013 geared to creating and servicing buyers?

How can advertising on carsales.com create customers? How do manufacturer controlled national advertising campaigns create customers? How does valuing trade-ins by phoning wholesalers who have valued the same car for ten other dealers in the past two days create customers? Or do I have this wrong; does the modern retail automotive business want to deal with buyers at the expense of customers?

I deep dive this conundrum in book one and argue that to survive the transition to the information business landscape we have to start doing everything we can to generate customers and convert buyers into them as well.

What are your thoughts? Do you think dealing with buyers is a high return strategy?