In his latest Thursday Night Insight post, B2B Research Executive Oliver Truman reflects on his own experiences with the automotive industry and concludes that it isn’t just financial assistance that’s needed – it’s also a fundamental reappraisal of what customers actually want and need from their cars.
An awful lot of ink has been spilt in recent weeks and months over the state of the automotive industry, not only in the US, but globally in these times of worldwide economic decline. And since it’s an issue that is an important bellwether of the wider state of the world’s industrial activity, I see no harm in adding to the chorus this week.
The subject of car sales is one that has been brought into much sharper focus for me in recent weeks as I passed my driving test in mid-October. Keen to exercise my newly acquired skills as a qualified driver, I thought I’d have a look at the used car options available to me at a nearby car supermarket.
Ever-the-researcher, I thought I’d head to the car forecourt armed with all the knowledge I’d need to make an informed decision about what to buy. As I pored over magazines, pricing books and websites teeming with data and opinion from self-styled experts in the automotive field, I began to think about what my priorities were for this major purchase. With all the thrift and common-sense that might otherwise be expected of a stoic Yorkshireman (I’m from the Western side of the Pennines), it appeared that straightforward factors like running costs, reliability and resale value were going to be my key considerations.
Even so, I was also aware of other “intangibles” that couldn’t be measured and that these were, in view of a vast swathe of similar-ish options, just as likely to guide my ultimate decision. What does the car look like? Is it built to last? Will my choice result in endless of laughter and cheap jibes from friends and colleagues? These were just a few of the pressing questions I’d asked myself.
Almost without even being aware of it, I was performing my very own trade-off exercise in my head. As it had become apparent that I couldn’t have everything I wanted and that perfection was unattainable (again!) I would have to whittle down my options to those that would best deliver on the criteria I’d set and the priority given to each. This continued until I was left with a handful of cars in my “consideration set”, whereupon I’d planned to set about trying to get the best deal.
This seemingly trivial process is one that’s familiar to most of us, but at the same time is devilishly difficult to pin down, measure or replicate. And to make matters worse, when this computation is put in the context of business-to-business decision-making, the nature of the process becomes even muddier, owing to the complex web of considerations that companies routinely face. Thankfully, in the world of B2B research, we’ve a series of tools at our disposal to cope with this such as SIMALTO or conjoint analysis (which you can read more about here). Unfortunately, the civilian (non-researcher) me would have to rely on ingenuity alone.
Even so, I now felt able to stride into the salesman’s lair with all the confidence of a man whose brain had been swelled with the accumulated knowledge of the world’s automotive press. This, I was certain, would result in me leaving the dealership with a crackerjack of a deal, leaving all parties involved satisfied.
How wrong I was. Aside from initially learning that virtually none of the cars I’d seen advertised online were available for sale in the real world, my will was to be slowly and gracelessly crushed by a salesman with all the tact of a drill sergeant. When it had become apparent that the car I was after (or one at least vaguely matching its description) wasn’t on offer, he resorted to the tactic of browbeating me into buying a larger, older and most expensive car that met virtually none of my needs. This, coupled with several statements that I knew to be complete, verifiable untruths about the car’s specification and performance, resulted in my leaving empty-handed and frustrated.
Was this just an unfortunate, isolated incident? In my case, it seemed not; I went to another couple of dealerships on the same day and experienced largely the same, slimy, smug and, I suspect, underlyingly duplicitous treatment as before. The upshot: I didn’t buy a car and still haven’t.
And although my latest contribution to Thursday Night Insight feels as if it’s descended into a bitter, thinly-veiled rant against used car salesmen, there’s a wider point about the automotive industry underlying all this. You see, even though the current crisis in the car industry may well be caused in the most part by declining consumer confidence and spending power, there appears to be a real issue here in terms of adequately meeting needs.
Chrysler’s and General Motors’ woes in the US are not just a product of people tightening their belts, it is also partly a reflection of their inability, or even aloof unwillingness to offer the market what it truly wants. In fact, GM recently released an advert apologising for their products, acknowledging that they’d "disappointed" and "betrayed" customers. Coming back to the case of my (non-)buying experience, my modest needs for a small, economical and reliable car also went utterly unfulfilled, even though they should have been easily attainable.
And since it is this smaller car segment that will grow most in the next few years, this poses a very serious question for those in the car (or any other) industry that appears perpetually predisposed to under-delivering (and it’s not a pleasant one): If you cannot meet even modest customer needs, what hope is there of survival in these troubled times?