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Those
who embrace the Internet and address the local markets at
the same time stand to benefit in many ways. Let's talk about
the Internet first. To start with, every dealer should have
its own home page. This should describe everything that is
available from the company--everything: equipment sales and
rentals, parts and service. It should be a functionally descriptive
page. This is not an ego trip, and it is not about history.
Everything available on the page should lead to an enhancement
of commercial activities.
Any of
you who use the Internet today will have examples that you
can look at. For those who haven't had the opportunity, look
at Amazon for a model of a "user friendly" approach.
Secondly,
there is the ability to provide e-commerce through your site.
Customers should be able to process transactions on the Internet--place
orders, ask for prices, check availability, fill in a credit
form, ask for an open account, etc.
This is
a user-driven process. What do your customers want from the
Internet? Better ask them before someone else provides them
with the things that they want. Believe me when I say that
once a channel has been found and is used it will be very
hard to get buyers to change. Many companies are worried that
they will lose business to the Internet because of price.
Don't forget the dealership provides value to customers. We
still can compete through value.
Many dealerships
have already moved to the Internet. They have set up Web pages
for information, communications and transaction processing.
The majority, however, are uncertain as to what they should
do. They have concerns that their major suppliers will provide
a parts order process over the Internet to any approved buyer.
Further, they are unclear what level of participation they,
as dealers will have in this new distribution channel. They
are worried that the dealerships will not share in the profits
in this new channel as they currently do.
Another
concern is that the transactions from the suppliers will be
at published consumer list prices. Many dealers have adjusted
prices above consumer list because the margin provided between
dealer cost and suggested list is not adequate with today's
dealership operating model. This is particularly true with
all of the additional services that are provided.
TRADITIONAL
OFFERINGS FROM DEALERSHIPS
Dealers should already have in place a series of direct entry
processes for their customers. These processes should allow
inquiry into availability, pricing, back-order tracking as
well as a direct order entry facility. Whether via the Internet,
or directly to the dealer computer--you should already have
a vehicle like this in place for your customers.
If the
customer has an open account then the entry of an account
number with a password type protection needs to be established.
There is also a need for a credit card payment process to
facilitate any transactions conducted completely online for
those customers who choose not to use the open account. Again,
this should be true either on the Internet or through a direct
computer line.
In order
to assist customers in placing parts orders it would be beneficial
to have on-line access to the service manuals so that parts
can be selected from drawings. This has been provided from
suppliers on CD's, on systems, and from independent software
companies as well as an offering from AED and CIMA. This is
a very critical item.
In order
for the Internet to be a viable vehicle for orders there needs
to be a provision for easy and effective return of parts.
Companies such as Land's End, Williams Sonoma and Amazon do
this well, but bear in mind they have different products to
handle and the freight costs are very different than those
of the traditional dealership.
There
are several items, then, that dealerships should have in place.
Distributors must embrace the Internet and e-commerce as just
another tool to serve customers. Don't forget the marketplace
drives the processes. Look back at the auction of equipment,
the arrival of the rental business. The Internet is just one
more change that the marketplace is demanding.
DEALERSHIP
"VALUE ADDED" OPPORTUNITIES
The Internet is but one more tool. It fits into an array of
offerings that are customer focused and directed. The following
is a short list of significant elements of a thorough Dealership
"Value Added" customer focus. How does your company measure
up?
A "loyalty"
program designed to address customer desires and increase
sales. This is nothing new, but it is a key tool. Customers
are not all the same. There are needs that can be better matched
by the dealership that are best adapted from a loyalty program.
A program to train employees in commodity features and benefits.
Without good knowledge there is no competitive barrier. If
the customer knows as much about your products as you do then
there is not much "value" to provide from the dealership.
This isn't true is it? A plan for customer coverage. Segmentation
as a marketing tool is the only way to drive retention. The
method of coverage is determined by customer volume and call
costs. Dealers who match coverage properly gain tremendously.
Machine Population information needs to be accurate and up
to date. With product support, the machine is the customer.
Machine hours drive the consumption of parts and service.
Dealerships with current accurate machine population can better
manage the customer relationships.
This is
by no means a complete list. But it gets the idea across.
The Internet is just one of many critical tools for dealerships
and customers. Ignore them at your own risk.
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