Value Added Dealers (Auto)

Value added dealers

Automobile dealers are front line of customer service in the auto industry yet it is something that manufactures often have too little control of. It was not until Toyota developed the Lexus brand in America did we understand how much dealers can affect the perceived value of a vehicle. The question for many (especially luxury) automobiles makes is how manage and implement better quality dealers. There are multiple examples of turning dealers from sales forces to a value added process even before the car is sold.

Lexus originated their dealer experience to provide something beyond what anyone else had. It started by sales staff training that was regulated by the manufactory and a strict policy on warranty service. They followed up with constant surveys of customers that is the standard today in the industry. They also created a dealership that felt more like Nordstrom's than a Wal-Mart. The result is people began to expect quality for the service of Lexus. People were going to dealerships because Lexus provided of the service not just the product.

The most shining example is BMW. Their first step to increasing the quality of dealers was to increase the quality of warranty service by forcing dealers to guarantee replacements with BMW vehicles. No one wants to drive in with a luxury car and be forced to drive out with a Korean economy car. Today this has even gotten to the point where BMW dealerships will guarantee you will drive out with a BMW that is equal to or better than your car so customers that have a 7 series will not be forced to drive out on a 3 series.

The next move for BMW was to add in guaranteed service. This means that the car is sold with full service expense covered under the warranty (even wear items such as brakes). The result is that anyone who purchases a BMW has already purchases all their service for the first 50,000 miles. It's basically a way of guaranteeing their dealers service revenue so that the increased revenue can be used to improve the dealers. This is all combined with the fact that you will never the