How do dealers stay in business?

I have been to the NAFTA Show many times. I have seen the money that dealership spend on web platforms and marketing and advertising...all to get people to contact their dealerships. They send out endless mailers and e-mails, enticing you to come to them for service. They have chat buttons and SUBMIT buttons on their websites, all to make it easy to reach out to them.

It's all a waste.

Every time I have used any of these devices, it has gone into a black hole. I have never received a response from an e-mail inquiry or form submission. The phone is the only thing they know how to use apparently.

This week, I am looking to put an LSD into the FiST and since it is a Ford Part# and they know they car, I figure they might be a good place to get the work done. I ask for a price quote from my local dealer...nothing. I reach out to the #1 rated dealer in the area...nothing. I reach out to three other area dealers...nothing.

(I also reach out to several area car shops, but got no replies from them either. )

So I have to wonder why companies put money into lead-generating activities, only to ignore the leads? Hey Pittsburgh, I have money and want to spend it...anyone interested out there?

Be careful what you wish for. I clicked on the contact button for a bike at a dealer in upstate NY inquiring about a used bike and they responded in 5 minutes. Now they won't leave me alone.

pinchvalve wrote: I have been to the NAFTA Show many times. I have seen the money that dealership spend on web platforms and marketing and advertising...all to get people to contact their dealerships. They send out endless mailers and e-mails, enticing you to come to them for service. They have chat buttons and SUBMIT buttons on their websites, all to make it easy to reach out to them. It's all a waste. Every time I have used any of these devices, it has gone into a black hole. I have never received a response from an e-mail inquiry or form submission. The phone is the only thing they know how to use apparently. This week, I am looking to put an LSD into the FiST and since it is a Ford Part# and they know they car, I figure they might be a good place to get the work done. I ask for a price quote from my local dealer...nothing. I reach out to the #1 rated dealer in the area...nothing. I reach out to three other area dealers...nothing. (I also reach out to several area car shops, but got no replies from them either. ) So I have to wonder why companies put money into lead-generating activities, only to ignore the leads? Hey Pittsburgh, I have money and want to spend it...anyone interested out there?

Probably a moot point, but have you tried Smail in Greensburg? They've been really good to me with the miata and the Vic, and are right at the end of my street, I could even go talk to them for you.

Huckleberry wrote: Be careful what you wish for. I clicked on the contact button for a bike at a dealer in upstate NY inquiring about a used bike and they responded in 5 minutes. Now they won't leave me alone.

My grandmother in Ontario gets unsolicited magazines from a high-end motorcycle dealership in the area...no idea why. I've sent car parts to her house a few times and peered into the dealership window from the highway, that's about it.

In reply to pinchvalve:

Huh, we spend small money in advertising (at least in the big picture for software) and I'm always crazy happy to have a lead come through. Even more so after I spend half a day carefully researching and answering all their questions, providing my contact information, and inviting them to call or email me back with any more questions and they actually do.

I get a response maybe.... 15% of the time. It goes both ways I suppose. I can see dealerships figuring if you're really interested you'll call. Most of that nonsense is just because someone else is doing it and they figure that they need to as well (aka: I have piles of money to light on fire.)

The Mazda dealer here in the Lehigh Valley is pretty good with communications. They're pretty much the Mazda dealer with whom I've enjoyed doing business or haven't been super pissed at when I picked up my car.

I've been on the opposite end of that spectrum. I handled the initial feeling out of my Focus RS purchase online (email) back in December. I've gotten multiple calls/emails (after purchase) asking if I'm still looking for a vehicle, asking if I've been contacted about the vehicle in question, telling me that they want my trade, etc.

Non-warranty LSD replacement is not high margin opportunity for your dealer service department. You'd probably be better off (quality of work for the price) at a specialist shop.

A good specialist shop will have more business than they can handle and isn't looking for a low touch / low return method such as social media or website to solicit your business.

The telephone and your feet are your secret weapons.

Edit: the answer to the original question. Dealers stay in business because people want new cars they can't afford.

I too have received multiple responses from each inquiry I have ever made via web or phone to dealers to buy a car. I think your problem is you are shopping for non-warranty service. Many new car dealers seem not to be interested in the service side of the business beyond how much revenue they get in processing through as much fast, simple service (like an oil change) that they can in a day and screaming at their staff about how the service department is losing them money. I have had Chevrolet dealers decline to do simple repairs on older cars before. For example, replace a fuel pump on a 20 year old Corvette, local Chevrolet dealer wouldn't touch it.

Recent experiences have shown me that the ONLY thing that matters is new car sales. Everything else is done reluctantly and only because it might generate a future new car sale.

To answer the question in your thread title, see the thread below.

I cant wrap my head around the price of new trucks

Service provides the base to keep the doors open and all sales is gravy.

Dealerships are in business to sell cars. They aren't too concerned with installing an enthusiast's limited slip.

Adam ruins Car Dealerships

This could give a better background as to the how and why of dealerships....

Huckleberry wrote: Be careful what you wish for. I clicked on the contact button for a bike at a dealer in upstate NY inquiring about a used bike and they responded in 5 minutes. Now they won't leave me alone.

This. I try not to click on a "submit" button or do anything that will give them my e-mail, because they will start calling usually within an hour and keep bugging me.

The one frustration I have is they'll offer a "live chat", which I have used sometimes. A lot of dealers send those chats to an off site (probably off shore) person who knows nothing about the car and can only take my name and number. What's the point of the chat? Some dealers have actual sales reps handle those, which is great.

My shop (independent repair and sales dealership) spends 10's of thousands of dollars each year to generate phone calls and emails. We take them very seriously.

A few bucks made to install an LSD can turn in to a lot more with repeat business and word of mouth. They are wasting money by not getting back to you.

mazdeuce wrote: Recent experiences have shown me that the ONLY thing that matters is new car sales. Everything else is done reluctantly and only because it might generate a future new car sale.

Hm. My understanding is that, statistically, new car dealerships actually make most of their money in the service department, doing regular service (oil change, brakes, tranny flush, etc) on first-owner vehicles. Profit margins on new car sales are only a couple percent, so a $35K minivan is $700 in profit. Given the prices I saw at the Honda dealer, they probably make that much with one brake job on that minivan...

Not unlike the government, most car dealerships are run by rich, old, white guys who are remarkably out of touch with the workings of the modern world.

EvanR wrote: Not unlike the government, most car dealerships are run by rich, old, white guys who are remarkably out of touch with the workings of the modern world.

Oddly enough - the only acquaintance of mine I know in that business is a wealthy, old, white man who is generally out of touch will all manner of things such as the invention of the fax machine, the notion that 7 Manhattans might impair driving, and that a lot of people have never taken a helicopter to go skiing before.

His checks cleared though so he does know how to make money.

Huckleberry wrote: Be careful what you wish for. I clicked on the contact button for a bike at a dealer in upstate NY inquiring about a used bike and they responded in 5 minutes. Now they won't leave me alone.

I still get e-mail from a dealership in Dayton after I had contacted them regarding a unicorn they had listed. Every time I get off their mailing list, they put me back on a few months later.

No, I am not interested in a new Flex. I am interested in a 13 year old Mazda. When Ford starts making 13 year old Mazdas, I'll be all over it.

(next month: Ford announces that they are reproducing the Mazdaspeed6 with the 2.3 Ecoboost with an MSRP of $8k)

NEALSMO wrote: My shop (independent repair and sales dealership) spends 10's of thousands of dollars each year to generate phone calls and emails. We take them very seriously. A few bucks made to install an LSD can turn in to a lot more with repeat business and word of mouth. They are wasting money by not getting back to you.

This. I have a Ford that is new enough to need ongoing service, recalls, warranty repairs, upgrades and an eventually upgrade to a Focus RS and then a Ford GT. The idea that no one will return an e-mail is crazy.

BUT

One dealer got back to me right away today, so fingers crossed.

I'd started with "speed shops" but there really aren't any around here. The one that I know of hates new customers and Pittsburgh isn't exactly SoCal when it comes to options.

Most of all the "dealer contact" gimmicks are run by outside companies. If the yahoos running the dealer think they are making $1 more because of this contact company than it costs them they are happy. They don't actually care about the quality, just that they can show their boss they made an extra dollar. Most of the people running dealerships are not good business people....They had enough money to buy into the partial ownership of the dealer and now they get to make the big boy decisions. Most of the general public does not realize that the dealerships of the past that were built from the ground up by actual smart business people are almost all gone. It's all large dealer groups now that just keep passing a big lump of money from one to the other.

Another FYI for everyone. In reference to "wrapping your head around the price of new trucks" the manufacturer is really the source for the prices. Most dealers make their money in the finance office. For example the dealer may buy a brand new XX from YY manufacturer for $35K. That car will probably be on the lot for $35,5-$36. At $1500 a car (at best) the dealer could not afford to keep the doors open. The small mark up, finance kick backs, finance upsells, and your old trade in that they can make another $1k is where the money comes from.

For your own entertainment tell them you're paying cash and watch the squirming begin. And PLEASE don't tell them what you want to pay per month. The shark's mouths start watering then. Ever seen a $45k subcompact? I have seen way to many.

Knurled wrote: No, I am not interested in a new Flex. I am interested in a 13 year old Mazda. When Ford starts making 13 year old Mazdas, I'll be all over it.

An RX-8?

You have a part number, I would just call the parts department directly.

codrus wrote:

Knurled wrote: No, I am not interested in a new Flex. I am interested in a 13 year old Mazda. When Ford starts making 13 year old Mazdas, I'll be all over it.

An RX-8?

Non-sunroof Mazdaspeed6. With full service history dating back to new, ignore-me Generic Dark Gray, and the unicorn part: NO SUNROOF.

It's important enough to say it twice.