Customer loyalty isn’t dead. People are just changing the way they communicate and it’s affecting the premise of one of the automotive industry’s most crucial forms of business development: the referral.
Transparency is at an all time high. We have access to more information at a given point in time than the kings of previous centuries. What’s more is that the pace is accelerating; with information becoming more readily available every year. From our computer monitors at home to at our fingertips on our phones. We have tangible sources for determining what businesses are legitimate (see Better Business Bureau), social media outlets like Facebook and Twitter for checking out what vehicles our inner circle of friends are approving, and tools such as CarFax and AutoCheck for checking out the history of pre-owned vehicles. Put simply, the “word of mouth” system of yesterday has become antiquated. We’re living in the “Word of Technology” age now.
Most auto dealerships have stuck to systems that worked fine during the “word of mouth” age but aren’t up to par with the current state of technologies. Everyone knows a foundation of repeat and referral business is important for establishing a career in sales. But with the outdated honor system of “send us a referral customer and if they ask for the salesperson you dealt with and tell him or her who sent them, we’ll send you a hundred bucks” has three major flaws.
For starters, if I just purchased a vehicle from Bob and had a terrific experience, I’ll go home and when my Aunt Cheryl finds out I got a brand new truck and mentions that she’d love to trade her Buick Enclave in for a new Ford, I’ll immediately instruct her to go to Bob. I’ll want her to be able to have the same great automotive ownership experience I did. However, one of three things can happen:
1. After being instructed to go to Ford Motors A, she winds up at the wrong dealership next door and the poor woman buys from someone else entirely.
2. She goes to the right dealership but forgets to ask for Bob and ends up buying from the wrong salesperson.
3. She goes to Ford Motors A, asks for Bob, but forgets to mention that I sent her.
In either circumstance, my aunt purchases a vehicle and I don’t receive the immediate gratification of the $100 referral fee that I deserve. Am I likely to be as enthusiastic about sending Ford Motors A another referral? Probably not.
In the new “Word of Technology” age, we will overcome this problem or we will fall behind as an industry. The salesperson will become extinct.