Out of verve to fight out the crisis? Come and buy a new car in one of the toughest markets in the world! Around here, an Audi A4 1.8 TFSI costs twice as much as it does in Portugal and the “right to purchase” must be requested to the Government… We wonder if the Sales Forces compensate this really dissuading context thus providing fantastic purchasing experiences. “World Shopper” visited Audi, Kia and Mitsubishi Dealerships in Singapore. In our luggage, we brought confirmations and, most of all, new leads to support the building up of an ideal dealership experience!

A hard time for Customers; piece of cake for the Dealerships

Singapore – Besides other taxes, if somebody wants to buy a new car in Singapore, one must get a “Certificate of Entitlement” (COE), which costs between 14.000 and 16.000 local dollars (1SGD=0,5EUR). This value may vary several times a year and it results from the local biddings that are presented by buyers to the State, with the support granted by Dealerships. Currently, the latter carry out most of the red tape work, transforming the COE into a “simple” tax that the Customer must pay. Since the COE is part of the vehicles final price, the latter is constantly changing. This taxing policy bureaucratises the process of purchasing a new car and strongly inflates prices. In an automatic transmission gas run models dominated market, let us consider the example of Audi A4 1.8 TFSi Attraction. In Singapore, this model costs 139.000 SGD (69.500 EUR), whereas, in Portugal, the equivalent model costs 33.795 EUR (in Singapore, there’s not the concept of minimum wage, but the average monthly income was around 2.000 EUR, in 2008).

The COE is valid for 10 years – by then, the vehicle ought to be scrapped. There are several lanes with electronic tolls, the speed limits are very strict and there’s a point based driving license system. If all this policy boosts the use of the excellent public transportation network, the combination of Singapore being the third most densely populated country in the world (4,48 million people and 710km2) with the fact that most brands are represented by only one Dealership creates the ideal retail setting, which is much less exposed to competition in the brand itself.

On Sunday, June 14, ’09 we went on a field trip by Alexandra Road and we bumped in Kia Dealership (Cycle & Carriage) – open and busy. Could it be an open house campaign? Not at all! Mitsubishi, right next to it, showed an identical buzz. Other Dealerships, such as Hyundai, Peugeot, Volvo and Audi also counted on an attendance which is not at all usual if compared to the current European levels… In Singapore, Dealerships work everyday, being weekends the privileged periods and causing most Consultants to take their days off during the week.

The population multiracial profile and the existence of a resident European community make it easier for the crediting of a setting in which a foreigner shows up at a Dealership as a potential buyer for a new car. Besides that, we acted the “hot” Customer role, determined to close the deal within a week.

Audi

In Singapore... just like at home

It was 14:13, on Monday, when we went in the Premium Automobiles Dealership, the sole Audi representative in Singapore. The buzz at the Dealership didn’t look very different from what we had observed on the day before. We showed our interest in Audi Q5 and the Consultant immediately showed a warming and nice approach, offering us a drink and even asking us if we wanted something to eat.

The dealership seemed to be quite devoted to the dynamic demonstration of vehicles. By the door, there was a receptionist, with a valet-counter looking desk, who controlled the non-stopping in-and-out going of the demo vehicles. A middle-aged European man approached a Consultant, saying he was looking for a second car for his wife. After 10 minutes, he was by the door trying his golf set in the A3 boot that he was getting ready to test-drive. Our Consultant immediately suggested a trial, too.

Catalogue sales

While the Q5 2.0 TFSI S-tronic was not available – we had two testers ahead of us – the Consultant started the first static presentation, performed in an identical unit to the one exhibited. However, both this time as in the case of a second static presentation done for a Q5 3.2 V6 FSI, the occasion was clearly wasted. For the first model, the Customer was invited in, but the Consultant only showed the driving position, while mentioning some of the vehicle’s features. For the V6, we weren’t even invited in – the Consultant used a catalogue to show us the features, although we were right in front of it! On both cases, features such as the backseat habitability, modularity solutions, boot functionality, quality, adjusting and texture of materials were left unmentioned.

While we were waiting for the trial, the Consultant invited us to sit down. On that moment, we noticed once again the surprising buzz around us: it came to a point where there were three Consultants simultaneously doing the static Q5 presentation to their Customers. Despite the trial pace, we had to wait for 45 minutes for our turn – all this time was not used by the Consultant, besides the short Q5 3.2 V6 FSI static presentation. A pro: going past an R8, the Consultant went around it and evoked the brand’s values, namely regarding technology.

The speech was always kept on a very pleasant tone, allowing the discovery of the Customer’s main needs in a subtle, but effective way. Professional activity, usually driven vehicle, desired delivery date for the new car, paying method, members of household and competing models on the Customer’s shopping list were some of the checked needs. When we showed our interest in the BMW X3, the Consultant said it was a good option too, even encouraging us to try out this model. However, on several steps during the visit, she mentioned objective Q5 arguments that fought this competitor, namely regarding the differences in terms of series equipment and each project age.

Left-lane driving in Singapore’s traffic? Peanuts!

Throughout the test drive, we had one more confirmation of how this dealership was devoted to dynamic demonstrations: predefined and diversified course, considering the obvious limitations of a city-like country.
Regardless of our relative adapting to left-lane driving and the wheel on the “wrong” side we drove along wide avenues, winding roads and even got to experiment the vehicle maneability and the parking helping systems effectiveness on a driving parking lot.

At a certain point, we drove by an A5 and the Consultant said that the Q5 “also had day LEDs, though with a different shape”. Now that the headlights and tail lights play such a strong influence on the car aesthetics, it would be frankly desirable that, at any moment, the Customer would see the vehicle with the lights on. Detail? When fighting for seducing throughout the Dealership experience, details may make a difference! At the end, the Consultant started the dynamic mode of the Audi Drive Select System. The commands assumed a firmer touch, and the Consultant explained (unfortunately, with not much detail) that this position favoured the dynamic behaviour. The presentation of the fabulous S-tronic gear box only showed two types of manipulation too – using the lever or the shift paddles on the wheel.

Negotiation: DIY

In spite of, throughout the visit, we showed interest in getting financing simulations, the price negotiation process was cut down to one proposal with the Q5 2.0 TFSI S-tronic PVP and the price of the several available options. “Do you want to know the final price? You only have to combine the desired options with the car’s price and… that’s it!”. Being an SUV, especially being a Premium brand, Q5 has an endless set of options that are worth to be sold, for profitability purposes of both the Dealership and the brand itself. Regarding discounts, the Consultant categorically said no, with the non-challant way of somebody who dominates Audi sales in the territory… The only goody would be the bike holder, valid for all the Q5 line.

Conclusion

You only need to go through the catalogue for us to have a clear idea of the amount of product that was left unmentioned: equipment, habitability, modularity and all those details that show the accuracy in the modern Audi construction. The negotiation step couldn’t be much worse either. Lack of information, price selling and financing simulation. However, the south-west Asian warm hospitality, a promptly offered test-drive – performed during the visit and complete enough – and an appealing product were enough to create seduction in this purchasing experience: we left the Premium Automobiles Dealership more willing to buy a Q5!

Kia

Invisible Customers

On the following day, Tuesday, we went in Kia’s dealership, Cycle and Carriage, at 14:29. This company represents, besides this brand, Mitsubishi, Citroën and Mercedes-Benz, in Singapore.

The venue was very busy, which was no longer surprising given the local context. We were not promptly greeted, though more than one attendant went past us. When we were finally granted some attention, we were asked if we wanted something and, as soon as we showed interest in a Picanto, the Consultant handed out a price table. He then explained that the price listed included a discount of 2000 SGD, without having shown any negotiation attempt.

The Customer’s needs were not minimally explored and the Consultant only answered our questions. Cheap on smiling, he always seemed uninterested.

We offer the “nap”

The static presentation was pretty much inexistent. The Consultant only said the leather seats (awful quality covers…) were offered and he opened the driver’s door and the boot. He partially pushed down the backseat backrest, but he left it leaning on the seat. He didn’t worry about showing that by pushing down the backseat, it was possible to have a flat surface. Without removing the package tray, he only said that “it could be removed, too”.

When confronting it to competition (Mitsubishi ‘i’, a 5 door version of smart fortwo), the Consultant said, and correctly we might add, that Picanto had a larger capacity engine (1.086 cc vs. 659 cc) and that it was wider than ‘i’.

Though Picanto’s joyful and florally decorated fleet by the door, the test drive not only wasn’t spontaneously offered, but it was granted with some resistance too. Basically, the trial ended up consisting of a 800m straight road in front of the Dealership. During the test, the Consultant continued in a very not-communicative mood, although he fluently spoke English. Among the few articulated sentences – this argument seemed simply breathtaking – he said “Picanto is not one of the best cars, but it’s economical and practical”.

Conclusion

If the setting used at Audi hadn’t provided clear signs of working in terms of reliability, we could have been seriously demotivated after this visit to Kia. The experience at this Korean brand dealership was really bad and the Customer wasn’t at all enlightened on the product.

Mitsubishi

Introduce yourself to the Customer!

Cycle and Carriage also represents Mitsubish in Singapore and the Japanese brand dealership is right next door to Kia. So, we left the latter and went in Mitsubishi’s holding the Picanto catalogue. When we were approached by a Consultant, we didn’t deny the obvious and explained that, initially, we had gone and looked at Kia Picanto, but added that Mitsubishi ‘I’ was also a possibility.

The smiley Consultant went totally past the Customer’s needs and moved right to a very poor presentation of ‘i’, always focused on comparing it to the Korean model. He explained that the ‘i’’s engine was smaller, that the price was higher (we wonder if he was selling us the Picanto…); and he only said that Mitsubishi benefited from the Japanese construction quality and that it was more reliable. Afterwards, the Consultant handed us a price table and asked us to go in one of the models on exhibition, while he reached for the catalogue – Mitsubishi ‘i’, please introduce yourself to the Customer!

Despite the credibility factors – decision to be taken within a week so as to purchase a new second car, besides purchasing an Audi Q5 – and the presence of a fleet of ‘I’ demos in front of the dealership, the test drive was not suggested.

Conclusion

What can we say about this dealership experience? If a wide open Dealership is no good when it comes to informing the Customer about the product, to connecting his needs to the car’s features, to granting sensorial contact with the car and to presenting several options for financing it, what’s the point of this whole structure? The Customer can get a better service by gathering information over the Internet and contacting, in markets where this is possible, different Dealerships so as to determine the one with the best offer.

Eastern lessons

The car industry must take a critical decision towards the sustainability of its distribution model: it may recover the concept of Dealership as the true car expert, able to transform the whole car purchasing process into a totally appealing, satisfying and valuable experience for the Customer, or it may stop investing in structures that are often wasted.

Despite all that, World Shopper brought some good ideas from Singapore to feed the “ideal concept of car purchasing experience”.

The surprising buzz at the dealership depends a lot on the local market features and on the flexibility of labour law, but the truth is that considering the weekend (Saturday and Sunday) as the privileged period does make some sense. It would be as if at the end of each week an open house event was to be set up, thus creating on people the habit of visiting the dealerships so as to see the latest news, gather information, clearing doubts or, simply, to talk about cars.

By the door, at Audi, in Singapore, there was an ambiance much similar to the one by the boxes in a race track, on a Driving Experience day, with the potential Customers getting in and off the test drive vehicles.

Couldn’t it be that granting an even greater role to the dynamic demo at the current attending structure would enhance the seduction component that is lacking so much throughout a dealership experience? Rethinking the retail model as the real car world tester could automatically induce efficiencies in the attending process. Always suggesting a test drive at the first contact, persuading the Customer to take it, creating convenient solutions, restructuring the attending process, so as to make it happen only after the dynamic presentation, perform the static presentation of the product on the test vehicle, limit the activities inside the dealership (this space would only be used to provide comfort solutions for the Customer, configure the desired model on the computer and negotiate prices and financing solutions ), eliminate the extended exhibitions of vehicles inside the dealership and promote test drives, rather than the traditional contact gathering, may work as reflection prompts to consider towards a new attending model that is able to consistently produce positive and seducing purchasing experiences.

Retail’s mission will always be selling cars, but to make it come true in a sustainable way, we might have to rethink our intermediate focus, objectives and processes.

Ricardo Oliveira

Would you like a World Shopper to pay a visit at your Dealership?

“World Shopper’09” is a worldwide Mystery Shopping tour devoted to looking for new ideas to redefine the showroom customer’s experience. Nowadays, discount is the most common resource so as to persuade the Customer.

“World Shopper Service” is a fast and effective program to share our experience with Dealers around the world and to motivate sales teams to enhance their own ability to  consistently produce a positive customer’s experience.

Automotive retail urgently needs a more sustainable business model and the quality of the showroom customer’s experience plays a crucial role.

Please contact us to know more about World Shopper Service!