Entries in Mercedes-Benz (39)
Why is a Mercedes-Benz worth more at an Audi dealer than a Mercedes dealer?
In this auto business there is all the talk of social media, accompanied by a myriad of systems and software. Dealers are encouraged to have a presence here, there, and literally of over the place, and convert leads into a prospect, at least a showroom visit.
What closes a deal is the "moment of truth" in the showroom.
Here is the "true story"
This Mercedes-Benz customer visits his local M-B dealer on a Saturday morning where the current vehicle is serviced. The tentative deal is to trade in the current M-B for a newer model.
After the initial small talk, the promotion/incentive of the month is offered on the new vehicle, an individual appraises the used vehicle, and offers a low price.
We all know that when a trade in is involved its either a smooth process, or a level of "intellectual friction" starts arising. On this morning the "friction" started arising, reinforced by some questionable arguments. The dealer mentions "if a transaction does not make business sense for the dealer they will not entertain it further".
If you conclude that there is a strong level of arrogance in such a statement we agree with you. Perhaps their success clouds their showroom thinking, empathy, understanding, and desire to do a deal.
The dealer made it abundantly clear that they had absolutely no desire to do a deal that morning, on that new vehicle, with that particular trade in.
Obvious that when the trade in went for service this same dealer was very motivated in the service work, and taking the money.
We could keep on going, suffice it to say that the customer leaves with a bitter after taste.
The reality in 2014, if a customer leaves the showroom without doing a deal, and a bitter aftertaste of enduring "intellectual friction" it will be difficult to get this customer back in the showroom.
A few hours later at the Audi showroom, with no "intellectual friction" the Mercedes-Benz trade in is worth 20% more than at the M-B dealer, and the Audi incentives of the month have a higher value proposition than the M-B incentives.
Its a foregone conclusion where the deal was done.
We all know, in an age of social media, blowing a deal out of your showroom can take on a life of its own.
Why was the Benz worth more money at the Audi dealer?
The M-B dealer was "low balling" and insisting on low balling the trade. The Audi dealer paid a fair wholesale price for the trade. The monthly incentives on the Audi have more value than the incentives on the M-B.
The Audi dealer has an innate understanding that in 2014 an individual in the showroom deserves a genuine team effort (sales person/appraiser/business manager) to remove any and all intellectual friction, and close a deal.
Its only 1 customer, 1 deal, 1 trade in on a Saturday morning, the Mercedes dealer walked the customer driving a Mercedes, the Audi dealer acquired an Audi customer.
This morning we have The Colonel with us, he seems to be in a good mood, lets ask him a few pointed questions.
Q- Colonel Good Morning, you literally grew up with GM, are we correct?
A- Good Morning guys, I'm doing great thanks for asking, yes...grew up with GM.
Q- How long have you been driving a Benz?
A- What a silly question, a few decades as you know, and lets leave it at a few decades.
Q- How did you gravitate to Benzes, from being immersed with GM?
A- Great question, it all started in the mid 1970's ( a few decades ago) when it became increasingly obvious that GM and Detroit were basically just slamming cars together.
Q- Those were the days of catalytic converters, 5 MPH bumpers, emission controls, and sitting on top of the mountain after decades of success for the Detroit manufacturers.
A- The Japanese knew how to assemble cars correctly with impressive fit and finish, and Detroit know how to meet emission and safety standards. The actual car was an afterthought.
Q- You were probably familiar with Benzes, but what caught your attention at that time?
A- Sometime in the early 1970's sold a Riviera to an individual that was debating between a Riviera, and a 450SLC for double the money of the Riv at the time. Prior to that getting into some sort of a Benz taxi. Observing a fellow repair a 190SL.
Q- But what caught your attention?
A- Must have been in the late 1970's I had an opportunity to drive a 450SEL, and another time a 300SD with a turbo. Incredibly solid cars, phenomenal brakes, the car drove like nothing else on the road.
Q- You had a thing about brakes...
A- Big time thing about brakes, the challenge was that the cars of the day could go faster than they could stop, which is a huge problem...was a huge problem.
Q- That 450 SEL caught your attention, the way it drove, handled, stopped.
A- Precisely, it did what a car was/is supposed to do, and did it very well.
Q- How about the diesel, that must have been clunky?
A- I was in the truck business, diesel engines were noisy, clunky, cumbersome to start, it was all normal back then. The 5 cylinder Benz diesels of the day are a story in itself.
Q- That was an S Class car, how did the features compare to a Cadillac?
A- No power seats, lethargic power windows, strange cruise control, mediocre HVAC system with a GM a/c compressor, immense steering wheel, the features were rudimentary, the interior was solid, the drive was superlative.
Q- We heard that at the time you could drive a Benz hard.
A- Big time, you could drive the snot out of them, which was a redeeming feature due to the lack of features.
Q- Do you still get aggressive with Benzes?
A- The driving environment has evolved, the moments when it all comes together the car must perform. Lets leave it at that.
Q- Did those older Benzes accelerate hard.
A- No...they had a tall rear axle ratio for autobahn use, acceleration from a stop was not a priority.
Q- Do you still have issues with cars that have less than a V8?
A- Yes...I'm old school, I need a V8, I prefer RWD.
Q- Today most folks assimilate Benzes and luxury.
A- As Detroit especially Cadillac lost its sheen, folks acquired a Benz because it was a good car, while giving up on numerous features (luxury) to have a good car. If you could afford a wonderful driving good car, you got a Benz.
Q- Were they maintenance intensive?
A- What do you think...yes...and if they were not maintained they performed and drove like sh*t
Q- Did those cars have issues?
A- Start with an over engineered Teutonic car that is maintenance intensive, with fragile transmissions, weak differentials, bullet proof engines, amateurish catalytic converters, mechanical fuel injection...and expensive parts. Its costs money to have a Benz runs strong like a Benz should.
Q- At some point we should continue this conversation.
A- Anytime guys.