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To Have a Positive Brand Identity on the Outside, Dealerships Must First Build Brand Integrity on the Inside

Thursday, December 15, 2011 - Ira Silver, CPA

Many auto dealerships have big marketing budgets. They use these funds to bombard the local airwaves with slogans designed to establish their brand identities with the public and, of course, to boost their sales.

Consider these messages: "Customer for Life;" "Home of Unparalleled Luxury;" and "Experience the (Your Dealership's Name) Difference."

While they develop ad campaigns, what are dealerships doing to train and encourage employees to live up to these sorts of lofty slogans? What are they doing to ensure that people truly accept these sound bites as their brand and image?

The task on the inside of the dealership is to create "Brand Integrity," a newly popular phrase for the internal mind-set that a business must embrace in order to attain its desired brand identity with the public.

Meeting internal and external branding goals depends first and foremost on the reputation that sales and service personnel have built with customers and with prospects.

Many dealerships realize that reputation starts on the inside. Thus, they have become more pro-active on internal branding by establishing programs of "dos and don'ts" for employees in their dealings with the public. These programs range from classes to basic handbooks, and they are designed to help employees know and understand the purpose of the company and to empower them to do whatever it takes to serve the customer.

A brand integrity program should have measurable targets and incentives, so that employees can see that it works. As part of the program, a "plan for every customer" should be developed. The key rules for each customer should be:

  • Have a standard and sincere way to tell every customer "thank you" for the opportunity to sell him or her a vehicle or to repair a vehicle.
  • Never lie to a customer. Violation of this rule should be a cause for firing.
  • Listen to the customer's needs. Don't try to oversell.
  • For sales or service, deliver the car to the customer's home or office, if necessary. Make sure they know that you will e-mail or text them that "the car is ready."

Dealerships should emphasize that employees cannot commit any of the following mistakes with customers: rudeness: slow resolution of problems: lack of product knowledge. When these mistakes are made, the result is almost always "no sale," and in many cases disgruntled non-buyers will tell family and friends to not buy a vehicle from the dealership. Through social media, that bad publicity can be multiplied several times over as customers use Facebook and Twitter to spread the word about a negative experience, and thus hurt the dealership's identity.

The concept that branding starts from within was the focus of a presentation by management strategist Gregg Lederman at the recent CPA Auto Dealer Consultants Association (CADCA) convention in Chicago. Lederman is the author of Achieve Brand Integrity: Ten Truths You Must Know to Enhance Employee Performance and Increase Company Profits. At the CADCA event, he explained that brand development starts with the task of defining an experience that you expect customers to have. From this point, you can build a positive spirit among dealership employees to achieve that level of brand integrity through dealings with customers.

The process includes pre-determined financial rewards which are based on revenue growth and which can be attributed to processes that employees follow in a brand integrity program—such as rules for making follow-up calls. The key, Lederman said, is for employees to have a mind-set of "what is the desired outcome of the customer and what are the obstacles that might prevent the outcome?"

He said employees should develop a list of "wants" for each potential sale as if they were that customer and make sure that they "out-behave the customer."

Employees must do all they can to make the customer feel that the dealership and its services are special, Lederman added. Not every dealership or other business has the resources of a Ritz-Carlton. But he said that businesses can use Ritz-Carlton as an example for employees to build brand integrity that revolves around service.

The Ritz-Carlton Hotel Co.'s brand statement is: "Let Us Stay With You."

Lederman cited Ritz-Carlton research showing that 68 percent of its guests say they really can't afford to stay there, but they are treated so well that they stay anyway, and plan to return.

On its Web site, Ritz-Carlton notes that it requires employees to perform "Three Steps of Service":

  • A warm and sincere greeting, Use the guest's name,
  • Anticipation and fulfillment of every guest's needs,
  • Fond fare-well. Give a warm good-bye and use the guest's name.

The Ritz-Carlton steps of service reflect the definition of "integrity" in Webster's New World Dictionary. That definition states, "the quality or state of being of sound moral principle; uprightness, honesty, and sincerity." For a hotel, auto dealership or other business, reminding employees constantly to live up to this definition is key to successfully building brand integrity.

Integrity can be vital in the often-contentious processes of selling a vehicle and of negotiating repairs and other services.

The sales person or service advisor who is upright, honest and sincere can often overcome that contentiousness and other obstacles to achieve the sale of a vehicle or services.

That result can help turn a slogan like "Customer for Life" into a reality.

To contact Ira Silver, email isilver@mbafcpa.com or call 1-800-239-1474.

The purpose of this newsletter is to provide general information on tax, audit and other issues related to the automobile dealership industry. The information contained herein may not apply to all businesses or organizations and their specific circumstances. Dealerships are encouraged to consult directly with an accounting expert before making tax and accounting decisions.