Automotive Training & Consulting

The Need for Certainty

Certainty is the Antidote for an Overdose of Variety

The automotive market offers a phenomenal number of choices to vehicle buyers.  This choice includes the number of makes and models, as well as the number of dealerships to buy from, the financing options and choice of financiers.  Additionally, there are more secondary sellers (brokers) and vast amounts of Internet (mis)information and Internet advertising.

With so many varied choices, most customers simply don’t have time to properly investigate every choice.  They don’t even have time to thoroughly consider every choice that’s relevant to them. Such an excess of choice causes confusion for most customers.  The easiest way out of this confusing information overload is to make a ‘safe’ choice.  In these circumstances, most people tend to go with what gives them a sense of certainty.

Furthermore, as vehicles become so technologically complex as to be beyond the understanding of many customers (and salespeople), the unknown becomes a risk and customers look to reduce their risk.  Manufacturers and dealers could help reduce the risk in many ways, including better trained salespeople, but most defer to the easy short-term focus of reducing price.

An intriguing aspect of the challenge in this for the motor industry is that the definition of certainty is not the same for all customers.

How is the Motor Industry Trying to Deliver Certainty?

Most manufacturers and dealers try the easiest approach to give their customers a greater ‘certainty of value’ by dropping their price.  Ever since supply started exceeding demand, manufacturers have been creating ways to ‘bribe’ customers to buy their cars – discounts, rebates, subsidised finance offers, value-adds, cash-back incentives and others.  Almost every manufacturer engages in this lazy form of marketing.

The problem with this strategy is that now almost every brand is engaging in it, the customers are faced with even more information, causing even greater confusion.  Escalating price wars create more uncertainty, not more certainty, for most customers.  Many customers sensibly delay their buying decision to see how high the discounts and incentives will go.  When so many manufacturers are employing this strategy on such a large scale, it becomes counter-productive to it’s goal of getting customers to make an easy choice of one product.

The luxury vehicle market has not been exempt from this practice, which was historically a strategy in the higher volume, lower quality market segments.

When and How Can a Vehicle Distributor Deliver Certainty?

In terms of a customer’s buying cycle, a manufacturer/distributor can deliver or try to deliver certainty before the sale, during the sale and after the sale.  Some examples of these include:

i)    Before the sale:

  • Maintaining or promoting the Company/Brand/Model image
  • Advertising & Marketing ( including price, as above ) / PR
  • Providing consistently high quality product

ii)    During the Sale:

  • Availability of accurate consistent information, e.g., brochures, websites, stock availability
  • Establish & Maintain dealer requirements for level of service to customers
  • Providing consistently high quality product

iii)    After the Sale

  • Providing consistently high quality product
  • Timely and accurate provision of parts and service / information
  • Established dealer requirements for level of service to customers

 

Need for Certainty

1 comment… add one

  • Owen

    April 21, 2014, 9:34 pm

    I also explain to my sales team that with more complexity in our industry, it helps to offer our customers more simplicity around what we can do for them.

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