Smith's Goldman Sachs diatribe could be any dealer's story
|Jamie LaReau covers auto dealers for Automotive News|
The op-ed by Goldman Sachs' Greg Smith in The New York Times rattled me.
The overall message is important: Put a customer's needs before profits. Doing so builds trust and without trust the profits won't mean a hill of beans in any business.
Many dealers work hard to deliver impeccable customer service and build trust.
But Smith's piece made me wonder if more dealers need to offer better price transparency or hire salespeople from outside the industry to revamp dealership culture.
Smith used the op-ed on Wednesday to resign as Goldman Sachs' executive director and head of the firm's U.S. equity derivatives business in Europe, the Middle East and Africa.
He describes the environment at Goldman Sachs as "toxic." The prevailing culture at Goldman Sachs, he wrote, is to make a lot of money even if it's done, in some cases, at the expense of customers' best interests.
Smith wrote: "I attend derivatives sales meetings where not one, single minute is spent asking questions about how we can help clients. It's purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client's success or progress was not part of the thought process at all."
A spokesman for Goldman Sachs denied Smith's allegations.
Smith's words sound familiar.
I've talked to consumers who feel that some dealership salespeople did not listen to their needs, but instead pushed products -- especially finance and insurance products -- on them that they did not want or need. Those customers felt hoodwinked if the store padded its pockets without considering what benefitted the customers.
That may be why a Gallup poll released in December showed 47 percent of Americans still rate the honesty and ethics of car salespeopleas "low" or "very low."
Lobbyists and members of Congress are the only professions that rank lower in Americans' eyes, according to the poll.
So is it surprising that customers aggressively use the Internet to research vehicle pricing and look up costs associated with finance and insurance products before they come into a dealership?
That signals a lack of trust.
And it's why Smith's op-ed resonates. Because the op-ed is not just about a big firm on Wall Street, it's about every business on Main Street.
You can reach Jamie LaReau at email@example.com. -- Follow Jamie on