INVESTING IN GOODWILL WILL PAY OFF AT YOUR DEALERSHIP
In an era of ill will towards business and populist leaders pandering to such sentiment, it has never been more important to invest in “long-termism” and to place the customer’s interest at the heart of everything we do.
To most dealers and their staff, putting the customer front and centre comes naturally. But we live in a world in which the slightest slip up or questionable tactic can be recorded and broadcasted around the world in an instant.
In such an environment, doing “the right thing” has never been more important.
In accounting, “goodwill” is an intangible asset that shows up on the balance sheet. Though it refers to something closer to intellectual property than the good will we seek to engender in our business practices, this concept remains a vital part of the equity of any business.
Similarly, investments in the good will of our customer bases will yield real dividends, even if at times it means sacrificing short-term gains for the long-term health of the firm and the industry.
Business, writ large, is often criticized for “short-termism,” for putting a quick buck ahead of the greater good or long-term shareholder value. Some of this criticism is well-placed, not just in our industry but also in most others. If automobile dealers are to shield themselves from such criticism, we must promote a culture of customer service and accountability in our businesses that is second to none.
New car dealers transact nearly three million new and used cars every year, and they also see their customers for service on a daily basis. It is inevitable that not all customers will be 100 per cent satisfied every time.
Indeed, some customers are impossible to please, a reality that’s been faced by anyone selling anything to anyone else since the dawn of commerce.
But to ensure the long-term health of our industry and dealer body, to insulate ourselves against high-profile criticisms from the “Automobile Protection Associations,” and other hidden-camera gotcha artists of this world, we must conduct every single one of these transactions as though they were the most important ones in which our business engaged.
We must be truthful in our public statements and we must not pull the wool over the eyes of the consumer, who is deciding to make such a significant retail purchase.
Members of the Canadian Automobile Dealers Association opt to receive CADA’s Dealer Code of Ethics, a document that makes plain the case for ethical business practices that serve the consumer, as well as the dealer, for the long haul.
The code states, inter alia, that “The role of the new car and truck dealer is to assist in meeting the motoring needs of customers in a knowledgeable and professional manner. With this position comes the responsibility to uphold and evolve the standards of the profession for the continuing benefit of customers, employees and business partners. A dealer’s success is rooted in integrity, competence and accountability.”
Automobile dealers operate in a brutally competitive industry with tight margins and across-the-street competitors. Operating in such an environment makes it tempting for dealers to squeeze revenues from unsuspecting consumers, but that contravenes the Dealer Code of Ethics.
Apart from new car dealers, Canadian retail is going through perhaps the most challenging era it has ever faced, with online behemoths and other aggressively cost-cutting competitors grabbing market share at alarming rates.
In this harsh environment, car dealers have continued to thrive because of their continued and resolute focus on customer service and long-term thinking. Let us continue this manner of doing business, and our customers will thank us.
