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Once Upon A Time


Out there in the marketplace a car manufacturer makes a car that is generally held by the car buying public as the car they would like to own most. But it’s seen as a little more expensive and difficult to acquire due to longer delivery times than most other cars, and so most people don’t buy it. The manufacturer advertises the car a lot, but virtually always about what a good car it is, which people already know, so the advertising does little to shift cars, and they sit on the lots. A group of dealerships across the country that overall have the best sales of the car get together and ask the manufacturer for some support. They point out that the trick in shifting cars is moving the customer from desire, which has been produced in large part by the advertising and word of mouth, to actual purchase, and just having the cars sit there looking good doesn’t do that. They suggest their trained and very experienced salespeople can motivate purchase, as some sales figures already show and even upsell the customer on a lot of additional features. They ask the manufacture to team with them with support in the way of seminars, marketing support, product training, information, incentives and so on, something above the level of dealerships that sell just a few of the cars. They feel strongly that with the backing of the manufacturer they can increase sales to the benefit of both, but mostly for the manufacturer who gets the largest chuck of money from a sale. The manufacturer thinks about it, and is generally against the idea. But, it decides it will support the dealerships, but on a couple of conditions. First, any such support must be paid for by the dealerships so it costs the manufacturer nothing; it must come out of the small percentage the dealerships make selling the cars. Second, the manufacturer doesn’t want to have anything to do with the support, so they outsource to another company that knows nothing about the car. That company makes a profit of course, the profit coming from dealerships’ payments to the manufacturers.

The dealerships took all this in, then looked across at several other car manufacturers. It seemed they were actually providing their dealerships with incentives to sell their cars and offering considerable support, rather than charging the dealerships for any support while using none of their own money to provide any, as did this manufacturer. The other manufacturers regularly published full page ads about their high production dealerships, took them to Hawaii and offered other incentives. Strangely, this seemed to be pretty standard in most industries. These other manufacturers seemed to actually want dealerships, and to work with them and to strongly support their best dealerships. It seems the other manufacturers thought that this increased the sales of their cars, which is what their company was all about. They didn’t seem to think that cars sold themselves. And it turned out the sense of belonging and loyalty inspired those dealerships to try even harder. It seems they liked feeling wanted, and part of the car’s world, rather than being made to feel they were a problem for the manufacturer.

The dealerships also noticed that a lot more of these other cars were being sold, even ones that cost more, and had longer wait times for delivery. They began to wonder if they should try selling more of the other cars, basing their business decisions on financial statements rather than mostly on how much they liked the car.