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DEALERS SEEK LOYALTY, TOO SORE POINTS EXIST WITH MULTI-FRANCHISE OUTLETS OVER MERCHANDISING

By Published on .

The emphasis by carmakers on the manufacturer-consumer bond has jeopardized efforts by auto dealers, especially those with multiple lines, to develop customer loyalty.

Dealers want buyers to return to their outlets for whatever brand. Manufacturers want customers loyal to the make alone.

"Traditionally, the manufacturer built the product and marketed the product on a national basis, and we marketed the product on a local level," says James Lust, a former National Automobile Dealers Association president and owner of Lust Chevrolet-Buick-Geo in Aberdeen, S.D. Those traditional roles have become clouded, Mr. Lust says.

Automakers fear their brands' images will be blurred at a dealership with more than one franchise, says Christopher Cedergren of the auto consultancy AutoPacific Group. What manufacturers want right now is a tightly defined brand image, he adds.

The prime example of a multi-franchise site is the auto mall, where several brands are sold under one roof. But auto malls don't pull consumers from one brand toward another, argues Robert Ebert, general manager of Reedman Corp., which operates Reedman Auto Mall-World Car & Truck Center in Langhorne, Pa.

"I don't think that changes the customer's urge to buy what he wants," he says. People will comparison shop whether it's at an auto mall or another dealer, says Mr. Ebert.

More than 75% percent of dealerships have more than one franchise, according to the March 14 Automotive News census of dealers.

Among the ways carmakers' efforts to build relationships with customers are putting pressure on these dealers, pricing is a particular sore point.

Print and TV advertising at times features the price of a car, but usually a small-print disclaimer says prices may vary and to see the local dealer.

Despite that fine print, customers will expect the low price from the ad.

Mr. Lust says the best way to avoid potential conflict is dialog between dealer and manufacturer: "We need to agree on a method of merchandising."

The relationships built through marketer programs also pave over dealers' own loyalty-building efforts, some retailers say.

Mr. Lust's dealership has funds set aside to pay for repairs that aren't covered by a customer's factory warranty.

"In the customer's eyes, the manufacturer might be helping them when in reality it could be the dealer," he says.

The customer doesn't always know how much the dealer is responsible for.

Some observers suggest marketers remember that their marques are aided by good consumer-dealer relationships.

There is more than one type of loyalty, and it often helps carmakers to have a customer loyal to a dealership or salesman, says Doris Ehlers, a consulting and training services account director at market researcher J.D. Power & Associates.

Consumers are slightly more loyal to their dealerships than their car makes, according to the Power survey on loyalty done for Automotive News and Advertising Age. The survey indicated 62.6% of car owners intend to buy the same marque again, but that 65.2% of respondents will return to the same dealership.

In fact, Ms. Ehlers says Power research has shown that auto malls are what customers want, since they offer one location and competitive information about what they sell.

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