General Motors' direct-mail campaigns are undermining dealers' efforts to make customers loyal to their own GM dealerships, some dealers say.
The campaigns have caused dealers to become more suspicious of the way GM fields consumer inquiries from the Internet and toll-free phone lines. As GM requires more detailed sales reports from dealers, some dealers worry the company is using the information to promote rival dealers.
Dealership employees who have bought or leased vehicles from the stores where they work have received letters from GM promoting competing GM brands and offering the address and phone number of rival GM dealerships.
'A salesman who has worked for me for over 20 years got a letter from GM referring him to another (GM) dealer,' said Paul Holloway, owner of Dreher-Holloway Inc. (Buick-GMC-Pontiac-Chevrolet-Cadillac-Oldsmobile-BMW-Mercedes), in Exeter, N.H., and a former chairman of the National Automobile Dealers Association.
The conflict is part of an ongoing tug of war over retail customers. While GM seeks to keep customers in the GM fold, dealers want to create loyalty to their own stores.
GM spokesman Terry Sullivan acknowledged that GM has received dealer complaints. GM has been collecting data to build a GM customer profile, he said. The profile is used to target consumers - including dealership employees - for direct-mail campaigns promoting GM vehicles. But in some cases the company has failed to cross-check the mailing lists for current GM customers. As a result, GM's letters steer prospects to the nearest GM dealer. That dealer is not always the one that sold the customer the vehicle.
Sullivan said GM in the future plans to cross-check mailing lists for GM customers and make an effort to send GM customers back to the dealers who sold them their cars.
When it comes to fielding phone and Internet inquiries about GM products, GM asks if the prospect has a preference for a specific dealership. If the customer says no, the company sends the prospect a letter offering a choice of nearby dealerships.
Some dealers bristle at the way GM handles these inquiries, believing that if prospects are GM owners, they should be sent to the dealer who sold the vehicle. But, said Sullivan, GM believes that in fairness to customers, it should give them a choice of dealerships.