Auto dealers have a golden business opportunity -- to become their customers' favorite merchants.
Here's my take. Several trends in business and technology favor local merchants, including auto dealers, over national conglomerates in terms of treating customers right.
I've watched dealers clean up their act. But the door is open to gain even more ground because so many other businesses choose subtle deception as standard practice -- things such as hard-to-avoid fees that aren't illegal but rely on customers not noticing.
That wasn't always the case. I remember when new cars had no factory price stickers, when "car salesman" was a punch line on rueful jokes and the most respected businessman in any town was a banker.
My father, a salesman who negotiated for a living, was never sure he got the best deal when buying a car because he didn't know the dealer's cost.
I, too, felt freshly shorn buying my first new car in the 1970s. But my attitude has long since changed. Dealerships are doing better and other businesses less so. Many friends and neighbors have noticed the same thing.
All merchants and lenders claim they want to engage and please customers. Then many undermine their positive efforts by adopting dubious back-office practices that irk their customers.
Take banks. Four decades ago, most people did their banking in person. Banking hours were inconvenient and so was waiting in line, but your banker knew you by name.
With ATMs and longer hours, banking is easier. But as they consolidated, banks went fee crazy: account-maintenance fees, hidden charges and a huge spread between interest rates paid and charged.
Credit-card issuers spend heavily to acquire new customers, then hit them with high interest rates and sky-high late fees and over-limit fees.
How did dealers gain esteem while others slip? I see three factors.
1. Auto pricing transparency: Everybody researches vehicles online, including pricing, and arrives knowing dealer cost. With less negotiating drama, dealers can sell on features. Buyers know they got a reasonable deal.
2. Proximity: The closer retailers are to clients, the greater the focus on satisfying customers. The farther removed from customers, the easier for companies to focus on maximizing revenue and profit.
Chains and banks went national for economies of scale, but top managers rarely see customers. Locally owned auto dealerships are too close to customers and employees to forget them.
3. A crucial shift in ethics: In my youth, most businesspeople believed they had roughly equal responsibilities to customers, employees and investors. Increasingly, today's mantra is "shareholder responsibility."
It can be a convenient cover. I hear high-level execs excuse iffy policies by saying "I have a responsibility to my shareholders." Mathematicians may calculate that the extra revenue outweighs customer attrition, but I don't believe milk-the-customer is sustainable.
By contrast, I see auto dealers and other local retailers focused on customers. If you have to look your customers in the eye, if you'll see them later at the grocery store or church, you treat them well.
Dealers depend on satisfied customers for service business, repeat purchases, trade-ins and word-of-mouth. Social media encourage and amplify openness.
Sure, dealers know all that instinctively. But the self-damage other industries cause themselves creates opportunity for auto retailers.
History is moving toward dealers. Embrace it and become favorite merchants.