How far is too far when it comes to factory/dealer relations?

Some manufacturers require the use of specific DMS systems. Others require websites that meet specific design and compliance standards.

Obviously, all have logo requirements, signage requirements, and less often now that a decade ago there was more flexibility with some bending of the rules on a few of these issues. The goal is to protect their brand, and ensure that standards are in place and there is some consistency in the way their product is marketed, sold, and serviced.

However, a recent trend has me a bit worried.

Many manufacturer’s are becoming technology and marketing “experts”. Recently I sat through a presentation by a well known and well respected representative of Google. A lot of people have high regards for his work and understand the responsibilities to both represent the Google brand and expand its base of clientele. Let’s face it, the manufacturer’s spend a ton of money on advertising and promotion. More and more of that has been spent on the web in recent times and of course much of that came from major factories, not dealers. Slanted opinion? Some may say, some may say not.

Up until now, the manufacturers have never been able to get into the “advertising” business, although through the use of some template designs, some have done similar things. But the manufacturer never got a “cut of the action” or a commission to so speak.

What has changed? Large manufacturers have developed “relationships” with technology vendors, search marketing providers, and other consultants who are looking out for the dealer’s and manufacturer’s best interest by ensuring compliance. How is this compliance ensured? By monopolizing the dealer’s choices by taking away some important assets, namely co-op funds, and linked pages from the manufacturer’s website. Or, golden leads, as some dealers will tell you.

Some manufacturers have gone so far as to offer “free” websites, which in turn are stripped down crippled websites that are nearly unmanageable. No choice- take the site, or get no leads. Very little SEO benefits, very little ability to post good deals or market the right cars, and often no ability to list non-manufacturer used cars or even non-certified brand cars (another forced deal might I say). These free sites are then accompanied by “upgrades” which end up costing as much as the original site they had. The dealer takes the bait, swallows the hook, and gets reeled in. Say goodbye to ten years of search engine links because the new manufacturer site has removed all those links. Traffic drops from the thousands to the hundreds, calls drop from the hundreds to the dozens. I’ve seen it, I have the reports, from more than one dealer. The data is out there if you know where to look.

To go further, the manufacturers are getting into the search marketing business. Buy Google Adwords from us they say, we will manage it, and you do not even have to look at it. Just pay the bill, we will get you some leads. So, the manufacturer is now a web developer, search marketer, and lead provider, and they are charging the dealer for the leads by both selling them the website and charging the dealer to market that website. Isn’t that the manufacturer’s job? This is bordering on Tier 1 advertising which is not the dealer’s responsibility. Any responsible manufacturer should be doing this anyway, to benefit their dealer base. Dump *your own* money into marketing not the dealers.

Some dealers will argue that the manufacturer is their best friend, and is looking out for the dealer’s best interest. Others may say they seek every opportunity to push them out of business by reaching into their pockets at every opportunity. The truth is somewhere in the middle but I happen to be leaning towards the side of the dealer, because they are getting the short end of the stick here.

Spend your money where you see fit, which returns the most on your investment. Do not bow down to pressure to let go of ANY source of quality leads that cost less than two American dollars per lead. Leads that result in 15-20% closing ratios. Leads that result in hundreds of calls per month, in favor of a crappy template that looks like every other template which returns just a fraction of the leads your previous site did. Seriously, if I walked in your dealership tomorrow and said I had a few hundred high quality, two dollar leads, which will close higher than any lead source, would you say no? TONS of dealers have already said no, and may not even know it because they do not track their business or leads properly.
Sure, you may have to battle a 500 lb Gorilla to get somewhere, but it is better than watching the manufacturer take money for each car for advertising, money for each car for your local ad group, money for your website, and money to promote that website online. Hey at least you can still buy paper from the local Staples and aren’t required to use “manufacturer endorsed” paper.

As a final note, how much money exchanges hands between these major vendors and the manufacturers? I have no idea, but private companies do not need to reveal their P&L although public companies do.

So what do you think? Is this an ongoing trend we will see more of in the future? Or will we need a bunch of dealer’s to stand up and not take it anymore. Or are we too numb right now to take on such a task? Have dealer’s done so poorly in the past that they need this level of assistance?