Dealer Overhaul

[bec5150]

I have brought this issue up in other threads but decided it needed it's own thread so as to discuss this issue by itself. Ford needs to upgrade it's stores and they need to do it soon.

 

Over the last 10 years, Harley Davidson has taken it's dealers to the next level. They have mandated what a "Harley Davidson" store will look like. They have told the dealers if you don't rebuild AND relocate to where we feel your dealer should go, then we reserve the right to close your dealership. Of course, Harley has a much more popular and profitable product than Ford does right now. That isn't a rub against Ford as Harley is about as profitable as any motorized product on the planet. That being said, I believe Ford needs to take a similar approach to their dealer issue.

 

Ford has, for the most part, taken care of the product. With a drastic reduction in fleet sales, they have taken care of the profit issue. Now Ford still has to throw some money on the hood here and there, but it's NOTHING like it used to be. Yet Ford has made very little progress in showing the public "Hey, we're different now!! The only effort they have made to do this is change the name of their primary products and brought out new "named" products. Yet the vehicles still sit at the same ole dealership. I would even maintain that they still have the same ole badge on the car.

 

So what should Ford do? What can they afford to do? Well, a few years ago Ford mandated the signage outside the dealerships be changed from a square sign to the Blue Oval. This is one of the most volatile points of discussion because all they did was take the same ole' Blue Oval and made it bigger. I question whether it worked or not. So what does Ford do to meet this goal?

 

I think Ford needs to determine how many dealers they need in a given area. If Toyota has "2" and Honda has "1" it would seem counterproductive for Ford to have "5" dealerships in a given area. For the area that I live in, that is the case. Furthermore, of the 5, only one of them comes close to the look and feel of the import dealerships but it's still not the same level. We've discussed this. A showroom with three cars in it, cramped sales area, the 30 year old popcorn machine, two ripped vinyl chairs in the service area complete with a grungy coffee machine and a TV that has two snowy channels available. I don't care if these types of dealerships are selling the best car on the market (and in the case of the Fusion and upcoming Edge, some would argue they do), if it's sitting in a second rate showroom that looks the same as it did in 1975, I maintain it's not gonna sell in the #'s that they need to.

 

I say that Ford needs to make up plans for about three standard dealership setups. Make part of the 18 Billion available to finance said dealership, then award the dealership to the one out of the five that is doing the best job NOT IN THE AREA OF SALES, but in the area of customer service, return business, etc. That may end up being the SMALLEST of the five, and that's ok. Anyway, get this dealership built then simply shut down the rest.

 

Now some dealers would be "exempt" from this. The town I grew up in had 1200 people and two car dealerships. Now they only have one and it's a Ford store, a very small one with an owner that everyone knows. The result is that about 80% of the farmers in the area have Fords on their farm. You would want to leave this one open even though there is no direct import competition.

 

The second thing they need to do, integrated with the first, is change and modernize the primary branding of the vehicles. I know, that's a tough pill to swallow, but Ford killed the name Taurus, Escort, and Pinto for a reason. I maintain that the same reason could be used to come up with a different branding. No, not change the name Ford, but perhaps the look and feel of the brand. Now this is a very EXPENSIVE proposition, having to change the way the branding looks on the cars AND advertise the change. I think that it might be required to go to the next level of turning the company around. It would indicate, both inside and outside the company, that things have changed in a major way.

 

I post all of this KNOWING I am not right about everything in this post (especially the branding idea..I could be completely off my rocker with that one), which is why I offer this up for discussion. It is my hope that Ford reads this and throws some money at this very VERY difficult and pressing issue.

Edited December 2, 2006 by bec5150

[05fordgt]

Bec, that is an admirable idea, but in these times, with many Ford stores not turning a profit, some won't be able to do this. This I mean, take a loan out, to remodel, and be able to stay in business. Look at Hummer. I know the H3 is out, but once the H2's were hot at biscuits, GM wanted every Hummer store to look the same. A Quanset (sp?) hut style building with a big H in the front. ALot of dealers did this, and when the H2's cooled down real bad, they were mortgaged out their ears, and not selling like they once were. Same with VW. They wanted stand alone stores. I have a dealer near me who not just remodeled, but built a brand new showroom. From what I hear, business isn't strong enough for them to sustain things on a positive level. They have this big note to pay back for the store, with not enough sales.

 

Again, its an admirable idea, but in Ford's current situation, with market share declining, you really can't tell dealers to completely rebuild their building, spend 6 to 7 figures to do so, and not have the traffic you once had. Believe me, if it was busy, and sales were great, I would say yeah, make them do this. But right now, alot of stores are holding on by the skin of their teeth. Alot of stores that own their property, and have no mortgage on the building, are the ones that are doing okay, financially. The Ford stores that are hurting, are the ones that did remodel, or rebuild and don't have the business to help repay the debt.

[bec5150]

First, I am banking that, overall, a good percentage of your dealerships will fold, not a bad thing since, like I pointed out, they have too many dealers anyway.

 

Second, HUMMER took it too far. I am not asking any dealership to go THAT far over the top, but I think we can agree that your typical Ford dealer absolutely HAS to be as inviting and nice in all areas as the competition. Right now, they simply are not.

 

Third, I stated that Ford could offer financial assistance since they are going to have some money (remember the 18 billion.) I still maintain that if they don't invest in the dealers then they can spend the 18 billion on product and it may not matter.

[Max]

You make a very valid point, one that seriously needs to be looked at if it's not being looked at already by Ford. Ford has some great products coming out, in an effort to turn themselves around. There needs to be something done with the dealers, after all, this is where your "new" customers are coming to get your "new" products. So they better be representing...

 

My anecdote from earlier this year, involves me in a waiting room at a very high profile Ford dealership in the area. It is very similar to the one described by you. The TV was pathetic, the chairs were atrocious...not with rips but with huge stains on them. One could only hope they were coffee stains; in my time frequenting this dealership I have seen no attempt to clean or replace these chairs. The chairs are not that expensive. The rediculous old popcorn machine was there, wasn't even working. You ask what was the car closest to the waiting room, less than 20 yards away (waiting room is in open air with showroom), why it was none other than the Ford GT itself. A beautiful specimen indeed of Ford racing heritage and engineering. Forsaken by this dealership's complete lack of caring for the customer experience. When they sold the GT alone, they should've been able to renovate the waiting room to the tune of a new TV and new chairs at the very the least from the GT's sale. However, that was not the case. Ford does need to do something about its dealers...sooner rather than later.

[bec5150]

You live in Troy OH too? <grin>

 

Seriously, the argument that the dealers don't make enough profit to do this illustrate the self fulfilling prophecy. In my example, if you get the five dealers down to one or two, the sales and profits go up for those dealers which would help in the investment.

[Motownr]

The only way any of the Big 2.5 get anywhere with this idea is if they break out the checkbooks.

 

To my knowledge, only GM has a fund to help facilitate the buyout and re-channeling of dealers--mostly into Buick-Pontiac-GMC (BPG). CG has no money to facilitate Alpha (DCJ), would be interesting to hear if Ford has any formal program.

 

GM's approach combines their money with the agreement that the surviving dealer either builds a new store, or renovates the existing store to make it a current "Image" facility. Obviously, all non-GM brands have to go bye-bye.

 

Without big money from the factories to make it happen, this is whistling in the dark. The vast majority of dealerships remain family businesses, and the owners simply hunker down, focus on used sales/service business, and ignore the physical plant. They're waiting for a tide to come in that never will (too much competition from fellow dealers), but they aren't going to sell without a big incentive to do so.

 

Until then, the stained chairs and tired facilities will remain.

 

Updated:

RJ was kind enough to add that Ford does indeed have funds and a program to address dealer consolidation.

Edited December 2, 2006 by Motownr

[wish4newstang]

seems to me its not what is on the sign, or the building that needs changed, its what is inside that needs some serious change. until customers enjoy the car buying experience all the window dressing wont mean a thing. here in Columbus, we have this yahoo playing a guitar, dressing up in chicken suits,and when you visit his dealership you are funneled into a friggen fortress, it actually is gated. and god forbid you dont buy a car from him. this is where ford should concentrate some energy. let me enjoy buying a car, treat me with respect, i'll always come back. on the other hand we have a lincoln mercury dealership here, where the buying experience is a pleasure. no gimmicks, no one breathing down your neck. as much as the shell of the dealerships need attention, the selling preocess is really what needs attention.

[markfnc]

Well here in NC I can't think of any dealers in the Raleigh Durham area + 50 miles that has not been completly overhauled or is not brand new in the past 5-10 years. Maybe some small town here and there. That is the same with all brands not just Ford. Closed the Pontiac / GMC dealership, and they moved to the Cadillabc /Olds when Olds went out. Closed Jeep moved it to the Chylser Dodge when Plymouth went out. etc etc

[JW]

the selling preocess is really what needs attention.

 

THAT is the key. If the showroom has marble floors, solid oak tables and leather massage chairs, but the dealership staff are all ignorant, arrogant assholes and treat the customer like uninformed crap, it doesn't matter. I'd rather walk into a store that has fold-up tables and chairs and salespeople who don't try to cram things down my throat.

 

Look and feel is important, but there are plenty of little things that can be done to accomodate that, without resorting to a building overhaul or relocation. Cleanliness is huge - I used to service computer systems in new and used car dealers all over California (including a number of FoMoCo stores), and they were some of the most rank, filthy places I'd ever been in. Absolutely disgraceful.

 

If we're going to talk about dealership overhaul, in addition to the above, Ford and its dealers should focus on the following:

 

- Salesperson education. I can't remember the number of times I've looked at a vehicle and asked a question, only to get "I don't know" or worse, an incorrect answer. There's no excuse for a salesperson to not know what they're selling. This goes mainly for the dealer's franchised, new vehicles, since they can't be expected to know everything about every car on the lot. This isn't as bad as it used to be, with the amount of information available to the consumer, but it still shouldn't happen.

 

- Base part of the commission on a sale, on the customer's sales experience. Salespeople would be far less apt to be overbearing from the get-go or try to bamboozle people into accepting things they don't want or dollar amounts they're not comfortable with, if they could get shafted when payday rolls around. Same thing for the F&I guys who act like you're the biggest idiot ever if you don't get the 500% marked-up extended warranty or paint and fabric protector package.

 

- Get rid of the rebates that everyone would get anyway and sticker the vehicles with the true prices. College grad and first time buyer rebates and such are fine, I guess, but if you sticker a car at $30,000 and then give everyone a $3000 rebate, isn't the price really $27,000? That looks a lot more appealing than $30,000.

 

- Take better care of the customer (and the dealers) on warranty issues. If persistent warranty issues would just be dealt with right the first time (or even the second or third time), people like KYSkipper and Jeff Colgrove would be a lot happier. Quality issues are going to happen with anything as complicated as an automobile; just don't turn them into a pissing match where everyone eventually loses.

 

Best vehicle buying experience I've ever had is when we got my girlfriend's Explorer. We walked on the lot (Power Ford here in Valencia), and had a few minutes to browse around hassle-free. When we were approached by a salesperson, he simply introduced himself and said "if you have questions, I'll be right over here", and stayed a safe distance away until we were ready for him. He took us on a test drive, knew the answers to our questions, and never EVER laid any pressure on. The price was a bit outside her budget, so when it came time to write it up, I countered with an amount that was marginally lower but still plenty fair, and the deal was done. Simple as that. We've had one warranty issue with the transmission that had a TSB associated with it, so we took it to the dealer (same one) and I told them the problem and about the TSB, and they fixed it. Simple as that.

 

Everyone's experience should mirror ours.

[StevenJ]

First, I am banking that, overall, a good percentage of your dealerships will fold, not a bad thing since, like I pointed out, they have too many dealers anyway.

 

Second, HUMMER took it too far. I am not asking any dealership to go THAT far over the top, but I think we can agree that your typical Ford dealer absolutely HAS to be as inviting and nice in all areas as the competition. Right now, they simply are not.

 

Third, I stated that Ford could offer financial assistance since they are going to have some money (remember the 18 billion.) I still maintain that if they don't invest in the dealers then they can spend the 18 billion on product and it may not matter.

 

Okay, get a plane ticket to Ft. Lauderdale international airport. Go to Sawgrass Ford off the Sawgrass Expressway and Sunrise Blvd. You want to see a good Ford dealership that is world class? You won't see a better dealership in your life. Yeah the service is a bit pricy but talk about spic and span! Excellent showrooms too and the service areas are top notch with a nice customer longue! I don't know what part ot the rust belt you are from but down here in South Florida, we got some kick ass Ford dealers. Hell, World Ford of Pembroke Pines and some of the Maroone Fords down here are damn good too. My friend works at one of the Maroone Fords off Linton blvd and I95. That's a good dealer too. Showroom is a bit small and the service area is a bit older looking but not bad. There are great Ford dealers out there. You just got to find them.

[akirby]

Ford tried to improve their dealer network with the Blue Oval Certification program. The dealers sued, Ford lost and that was the end of it. The dealers won't allow Ford to do anything - they use the automotive franchise laws to do whatever they want, and unless they do something really terrible or illegal Ford just can't stop it.

[markfnc]

Okay, get a plane ticket to Ft. Lauderdale international airport. Go to Sawgrass Ford off the Sawgrass Expressway and Sunrise Blvd. You want to see a good Ford dealership that is world class? You won't see a better dealership in your life. Yeah the service is a bit pricy but talk about spic and span! Excellent showrooms too and the service areas are top notch with a nice customer longue! I don't know what part ot the rust belt you are from but down here in South Florida, we got some kick ass Ford dealers. Hell, World Ford of Pembroke Pines and some of the Maroone Fords down here are damn good too. My friend works at one of the Maroone Fords off Linton blvd and I95. That's a good dealer too. Showroom is a bit small and the service area is a bit older looking but not bad. There are great Ford dealers out there. You just got to find them.

 

Crossroads Ford in Cary, NC . at the time it was built 4-5 months ago, largest indoor showroom.

 

 

http://www.crossroadsford.com/

 

web site , look at that show room

[campbell53]

Ford can't just close dealerships. State laws are too strong for that. I am a Ford dealer in Michigan who just spent 1.3 mil last year on a showroom expansion and renovation. The local Lexus dealer has benchmarked my store for his renovation. So...not all Ford stores look like a dump! I believe in this franchise and this company. I'm willing to risk my financial future for it. My customers and my employees deserve it.

[retro-man]

THAT is the key. If the showroom has marble floors, solid oak tables and leather massage chairs, but the dealership staff are all ignorant, arrogant assholes and treat the customer like uninformed crap, it doesn't matter. I'd rather walk into a store that has fold-up tables and chairs and salespeople who don't try to cram things down my throat.

 

Look and feel is important, but there are plenty of little things that can be done to accomodate that, without resorting to a building overhaul or relocation. Cleanliness is huge - I used to service computer systems in new and used car dealers all over California (including a number of FoMoCo stores), and they were some of the most rank, filthy places I'd ever been in. Absolutely disgraceful.

 

If we're going to talk about dealership overhaul, in addition to the above, Ford and its dealers should focus on the following:

 

- Salesperson education. I can't remember the number of times I've looked at a vehicle and asked a question, only to get "I don't know" or worse, an incorrect answer. There's no excuse for a salesperson to not know what they're selling. This goes mainly for the dealer's franchised, new vehicles, since they can't be expected to know everything about every car on the lot. This isn't as bad as it used to be, with the amount of information available to the consumer, but it still shouldn't happen.

 

- Base part of the commission on a sale, on the customer's sales experience. Salespeople would be far less apt to be overbearing from the get-go or try to bamboozle people into accepting things they don't want or dollar amounts they're not comfortable with, if they could get shafted when payday rolls around. Same thing for the F&I guys who act like you're the biggest idiot ever if you don't get the 500% marked-up extended warranty or paint and fabric protector package.

 

- Get rid of the rebates that everyone would get anyway and sticker the vehicles with the true prices. College grad and first time buyer rebates and such are fine, I guess, but if you sticker a car at $30,000 and then give everyone a $3000 rebate, isn't the price really $27,000? That looks a lot more appealing than $30,000.

 

- Take better care of the customer (and the dealers) on warranty issues. If persistent warranty issues would just be dealt with right the first time (or even the second or third time), people like KYSkipper and Jeff Colgrove would be a lot happier. Quality issues are going to happen with anything as complicated as an automobile; just don't turn them into a pissing match where everyone eventually loses.

 

Best vehicle buying experience I've ever had is when we got my girlfriend's Explorer. We walked on the lot (Power Ford here in Valencia), and had a few minutes to browse around hassle-free. When we were approached by a salesperson, he simply introduced himself and said "if you have questions, I'll be right over here", and stayed a safe distance away until we were ready for him. He took us on a test drive, knew the answers to our questions, and never EVER laid any pressure on. The price was a bit outside her budget, so when it came time to write it up, I countered with an amount that was marginally lower but still plenty fair, and the deal was done. Simple as that. We've had one warranty issue with the transmission that had a TSB associated with it, so we took it to the dealer (same one) and I told them the problem and about the TSB, and they fixed it. Simple as that.

 

Everyone's experience should mirror ours.

 

Excellent post.

[retro-man]

Ford can't just close dealerships. State laws are too strong for that. I am a Ford dealer in Michigan who just spent 1.3 mil last year on a showroom expansion and renovation. The local Lexus dealer has benchmarked my store for his renovation. So...not all Ford stores look like a dump! I believe in this franchise and this company. I'm willing to risk my financial future for it. My customers and my employees deserve it.

You too. I wish you luck with your franchise.

 

Only advice that comes to mind when reading JW's post above, is organize some kind of weekly employee meeting to discuss new products, features, specifications - whatever - to keep sales staff up to date with the product. And if anyone insults the customer's intelligence, show them the door. I had a sales manager feed me a line of bullsh*t once. It drove me to another dealer and another make. For four successive purchases. Bad move.

 

Anyway, good luck, and I hope Ford sends plenty of product your way that you can get behind 100%.

[Mark B. Morrow]

Crossroads Ford in Cary, NC . at the time it was built 4-5 months ago, largest indoor showroom.

http://www.crossroadsford.com/

 

web site , look at that show room

 

 

WOW that is incredible. Its the biggest showroom I have ever seen. I wonder what that place cost.

[markfnc]

WOW that is incredible. Its the biggest showroom I have ever seen. I wonder what that place cost.

 

 

Here is another in the area that is really big, and new.

 

http://www.wakefieldfordonline.com/

 

 

Maybe 25-30 miles from the previous one.

Edited December 6, 2006 by markfnc

[akirby]

Ford doesn't need the authority to close dealerships. All they need to do is just stop selling cars to the dealers that get too many complaints. The dealer will either straighten up, or go out of business.

 

But that's just it - they can't. The state franchise laws won't let them. They tried to hold back around 1% from dealers who don't measure up (Blue Oval Certification) and they were immedately sued and lost. Don't underestimate the power of the state automotive franchise laws.