The Car-Buying Experience: What Are Dealers Thinking?
We're barely through "that time of the year" -- the endless deluge of holiday season automobile commercials complete with red bows, winter scenes, and "limited time special offers." Having just bought a new car with my wife, I have a suggestion for the automobile companies: spend way less money on the one-after-the-other television ads and more resources on fixing the dealer experience, which I'm sad to say remains terrible. According to Borrell Associates, U.S. advertising for new cars will increase in 2010 to some $19 billion dollars, still less than than its $22.1 billion peak in 2008.
Meanwhile, the Better Business Bureau reports that it gets more complaints on automobile dealers than any other type of business -- even more than cell phone companies, who ranked #2. The web is filled with blogs and posts describing the unhappy car purchase experiences which seem to afflict virtually every make and model.
In understanding what goes wrong -- and why -- when people visit car dealers, all sorts of companies could benefit from existing research. Here are my analysis and suggestions.
A large body of research literature that shows the truth of the adage: you only get once chance to make a first impression. First impressions are durable because people assimilate new information in ways that confirm their initial ideas and also stop seeking new data to conserve effort once they think they have something appraised. So get the beginning right. If you can find tackier furniture and more uncomfortable chairs than those in most car dealerships, let me know. And many of the sales people are poorly dressed. You are making an expensive purchase -- it would be nice to think you are dealing with an establishment that cares about how it presents itself.
More importantly, emotions are contagious -- watch what happens when you smile walking down an airport corridor. Berkeley Professor Arlie Hochchild has documented the importance of positive emotions to the sales and service process in her research on "emotional work" -- jobs that require expressing positive emotions. It doesn't hurt to smile. Most the salespeople we encountered were sitting around looking dour when we arrived and, I'm sad to say, our arrival didn't seem to cheer them up. One's enthusiasm soon falls by the wayside in the presence of people with low energy, negative affect, and few conversational skills.
Another disappointment: Questions from what interior and exterior color combinations were available to the differences between current and recent models of the same car mostly drew blank stares, which doesn't inspire much confidence. I'm sure car dealers could find some individuals more excited about having a job and learning about the product, especially given the high unemployment rate.
So why not treat customers with respect and flatter their intelligence? That entails getting rid of the old, hackneyed sales "techniques" that mostly just irritate and intimidate people. The website Edmunds.com had one of their employees, Chandler Phillips, go "undercover" and get jobs at two Southern California car dealerships. His description of the sales techniques taught to car salespeople mirrored what we experienced. We had done our research on the Internet-many people do-so our objective was to see what the car actually felt like when driven under different conditions. Instead of putting us in a car and letting us experience it, however, many of the salespeople we encountered wanted to prolong the dealer visit experience, asking many irrelevant questions, walking us around looking at cars we weren't interested in-in general, trying to "escalate our commitment" by making us waste a lot of time so we would, having invested that time, be more likely to purchase a vehicle from them. Phillips describes this tactic as establishing control. But research on the process of psychological reactance shows that people rebel against attempts to control or limit their behavior. That was certainly our reaction -- the more the salespeople tried to get us to do what they wanted, the more we got irritated and started to leave.
A better approach would be to use the influence tactics of liking and reciprocity, nicely described in social psychologist Robert Cialdini's book on Influence. Reciprocity entails doing a favor for someone so they will reciprocate -- which, in the car buying experience, involves more than just offering coffee or water, but also trying to accommodate customers' schedules and requests. People are more likely to comply with requests from someone they like, and people tend to like people who flatter them, smile, and are pleasant -- not people who try to bully and intimidate.
Car dealers do seem to have one thing going for them -- in our many visits to dealers of various makes and models, we had virtually uniformly horrible experiences. I guess the companies figure if you're going to buy a car and the dealers are all equally bad, one of them will get your business.
It would be interesting to know if a better car buying experience might help perk up car sales. Meanwhile, fixing these problems wouldn't take much. And it would be a lot less expensive than the massive advertising designed to get you to go to a car dealer only to soon wish you hadn't.