Ziegler Supersystems, Inc Automobile Dealership Success Plan

Sales Manager Training - F&I, Menu Training - Automobile Dealership Consulting - Dealership Support

War Paint

YOU ARE REQUIRED TO REPORT TO DUTY IMMEDIATELY!

WE’RE GOING TO WAR!

In case you missed it…there was an article in the Wall Street Journal on October 28^th written by J.D. Power the third. (Text of that article is included below at the end of this letter)

James A. Ziegler is Mobilizing the Troops!

This letter is the expression of my personal opinions regarding personally perceived abuses by J. D. Power…his company and others like them. I am suggesting a course of action for anyone who has similar opinions.

For more than 20 years I have been warning dealers and manufacturers about what I believe to be a sinister secret agenda being carried out against car dealers and our industry by J. D. Power and Associates.

NOW…Dave Power has stepped over the line again. This time he has finally shown the world exactly what I have been saying in speeches and articles for the past two decades. His agenda is clear…he wants to tear down the retail franchise system…effectively putting car dealers out of business. I believe in my heart that J. D. Power and Associates has infiltrated our industry in an attempt to destroy us from within. These people clearly are not our friends. Dave Power’s article clearly states that he is in favor of repealing all dealer protective franchise laws and replacing car dealerships with Wal-Mart models where all cars are sold side-by-side like Cheerios and Post Raisin Bran sitting next to each other on the grocery store shelf.

I have received literally hundreds of letters, phone calls and emails from dealers and managers and even from several industry executives within a matter of the last few days. We are enraged and angry!

I am hearing descriptors such as jackass, moron, idiot, fool and so on and on. Alan Starling, National Chairman of the NADA has fired off an angry rebuttal to the Wall Street Journal as well.

ANGRY LETTERS ALONE ARE NOT GOING TO GET THE JOB DONE

I AM SICK AND TIRED OF EMPTY RHETORIC…AREN’T YOU?

Here’s the deal. I am saying it’s time for hardcore action by men and women of conviction. Get angry and get militant…right now! My challenge to you…all of you…is do you have the balls to fight for your existence?

We have been surveyed to death as interlopers and outsiders and research imposters have invaded our industry.

My belief is that J.D. Power and Associates and others like them have no place in our retail industry.

My opinion of Dave Power is unchanged, whereas others seem to be finally realizing that this man and his company not some kind of benign kindly gentle folks trying to conduct unbiased research and report the facts…NO…I submit to you my perception that J. D. Power and his company have an agenda and it appears to me that they produce this alleged research to support that agenda. AND…amazingly enough…J.D. Power alleged statistics always seem to conveniently support their agenda.

Remember a few years back when Chris DeNove, one of the senior partners at J.D. Power and Associates was quoted in virtually every industry publication…when DeNove was asked about the future of retail car dealers he responded with a Darwin quote… “When a species has evolved to the point where it is no longer able to adapt, it is time for that species to die.”

He was talking about us…the retail car business entrepreneurs. I took that statement to mean that J.D. Power and Associates wants us to die. What other interpretation could there be? He said it…he apologized for saying it…but he said it and I believe he meant it.

People who know Dave Power personally have told me that he is a fanatic, an impassioned zealot for his causes. When J.D. Power and Associates reported back in the early nineties that “One-Price/No-Haggle” was the wave of the future so-to-speak, that agenda was pushed hard nationwide. Friends of Power tell me that “One-Price Selling” is Dave Power’s personal passion. Of course, at the time, I saw an ethical issue when J.D. Power and Associates were allegedly doing research proving this concept was what the public wanted…and at that time they conclusively concluded that trend would take over the industry…all the while, at the same time they were conducting this alleged research, they were selling dealers seminars on how to install the One-Price concept into your dealership. I am so sorry BUT that is a major conflict of ethic to be selling a seminar on what is supposed to be unbiased research. Excuse me; these people are piranhas in my opinion.

Looking back at the 90’s when J.D. Power and Associates (alleged research and technology marketing speeches, articles and seminars conducted by Chris DeNove) concluded that technology sales were the wave of the future and that Internet and technology had made retail auto dealers obsolete. Ford Motor Company and General Motors, as well as other manufacturers, actually bought that bullcrap hook, line and sinker. I believe that Ford Motor Company’s Jac Nasser blew through billions of dollars chasing technology sales and factory-owned stores because of the false soundings he was getting that he believed to be valid research. Read through some of the J.D.Power press releases and newsletters dating back circa 1996-97-98-99 and you will see, as I did at the time, a pattern supporting the personal agenda of the researchers.

In my heart, I believe that J.D. Power and Associates alleged research …more than any other single factor…is responsible for the financial problems Ford is experiencing today.

So…I am saying I believe the time has come to throw these people out of our industry…all of them. Every one of these research interlopers who inflict these apparently bogus factory survey-driven programs upon us. I am talking about Blue Oval Certification…Honda Excell…and anything that stinks of this type of bullcrap.

HERE’S THE PLAN

We are not going to participate anymore...period!

You got it. I am saying we need to get militant about all of these programs.

You Honda Guys and Gals…So far, as a very powerful group, you haven’t had the balls to come to the party yet. I get all of these emails and phone calls from you crying the blues about this Honda Excell Abortion…but then you don’t take appropriate action. Get angry!

STOP filling out any J.D. Power and Associates surveys…send them back unopened with the words “GET OUT OF OUR BUSINESS!” written across the outside of the envelope.

REMOVE all J.D. Power and Associates literature, advertisements, and logos from your dealerships. Don’t use any J. D. Power alleged research as a selling tool, even if it says nice things about your product. We are not going to give these people any credibility. If a customer should even mention J.D. Power and Associates, tell them they are free to use any of that material in their buying decision, but personally, we don’t believe their research is valid.

DO NOT allow any J.D. Power and Associates representatives to set foot on your property or to speak to any of your employees.

CHECK AND SEE if J.D. Power and Associates has gotten access to any of your dealership databases out of your company system. Be aware, your management might have given them permission to access your data and you might possibly be unaware of it.

DO NOT allow these people…or any company like this to access your company data. Don’t you feel there could be a possibility they might actually be compiling your customer data for their own purposes?  If J.D. Power and Associates has access to your customer data, get these people out of your computers immediately!

CALL…WRITE AND EMAIL to all the manufacturers, the industry media, the NADA, your state associations and all of the other dealers. Spread the word that we are as “Mad as Hell” and we are not going to take it anymore. Please send this message to fifty other people while you have it on your mind. I would like to see the top executives of every manufacturer receiving hundreds or thousands of copies of this letter.

SPREAD THE WORD…Talk it up! Get on the phone right now and call somebody and get him or her involved in this revolution. Be aware there are always going to be some kind of weak sucks who are afraid to make waves…light a fire under them…our survival is being threatened here. This is a major issue. Get your 20-groups involved! Tell your field representatives exactly where you stand…be out front and militant. We tried being nice and you people (factories that hire these companies) didn’t listen…you still kept hiring these scoundrels and making us answer to them. We want them out of our dealerships and out of our industry.

FACE THE MANUFACTURERS DOWN… I would like to see every dealer and manager tell the factory folks it’s over…turn out the lights…we’re not participating in any more of these hair-brained programs.

STOP attending any events sponsored by J.D. Power and Associates.

UNSUBSCRIBE to any newsletters or correspondence these people are sending to you or your employees. Cut the head off of the snake by cutting their cash flow.

And to you Honda Excell Guys and Gals…I have spoken to dozens of Sales Managers and other Dealership employees who say they are quitting and going to work for other dealerships because they refuse to continue to put up with Honda Excell. You’re losing some good people because they won’t jump through these hoops anymore. There is rarely a week goes by that I don’t get a call asking me if I know of Car Manager Positions in their area.

I have also spoken to many Honda and Acura dealers who say they plan to refuse to renew Excell. Like you tell your kids about drugs… “Just Say No!”

In closing, let me say this. It’s time to circle the wagons and for car dealers everywhere to make a united stand. These outsiders being brought into our business and forced down our throats by manufacturers who haven’t got a clue…we can put it end to it right now if we get mobilized on this issue. I submit to you that Dave Power and his anti-dealer article just pushed us right over the edge and he has released a whirlwind. The genie is out of the bottle and we’re ready to fight…aren’t we?

PLEASE…resend this letter to hundreds of others. I want to see this circulate fast and furiously throughout our industry.

JAMES A. ZIEGLER

This is the article J. D. Power wrote in the Wall Street Journal…

Next Exit, the Auto Megastore

By J.D. POWER III

When people ask me to predict the future of automotive retailing, I'm tempted to say, "Let's ask the 50,000 or so U.S. automotive dealers." Only there aren't 50,000 new-car dealers in this country anymore. There are less than half that. Competitive and economic forces have squeezed that peak number down to less than 22,000 outlets owned by only 14,000 individuals.

By that measure, every day fewer people have a stake in how I answer the question. I do have an answer, though, and the short version is "Wal-Mart." I'm not predicting that Wal-Mart is going to enter the insular automotive retailing business, although if our current outdated state franchise laws were reformed, they could. I'm using Wal-Mart as an example of how dynamic retailing can and should be. The Wal-Mart model foretells how much power the retailer and his customer can wield over what, when, where and how goods are purchased when the barriers of inefficient distribution are removed.

That same power has never been present in automotive retailing for several good reasons that have outlasted their merit. The franchise system was designed in part to preserve the manufacturer's control over vehicle distribution and pricing while entrusting sales and service to local entrepreneurs who would do it best. To counter-balance control by the manufacturers, dealers joined forces to enact protective state franchise laws. Today, there is a hefty price for those artificial and anachronistic controls, and they add about 30% to the base cost of a manufactured vehicle.

Over the last 30 years, manufacturers have become quite adept at excising the inefficiencies out of the manufacturing process. If distribution costs don't diminish, they will consume an even greater share of the consumer dollar. You might think that the consumer wouldn't tolerate that. You'd be right. There is a battle brewing in automotive distribution. It is a struggle that will transform automotive franchising into automotive retailing.

Franchise laws are overdue for overhaul, and increasing numbers of dealers would like to lead the change. These are the multi-franchise dealers, who suffer greatest from the inefficiencies of the current system. In the vernacular of the automotive industry, these owners operate more than one "store," none of them true stores where customers can comparison-shop across makes under one roof. When the European Union's antitrust commission repealed old rules preventing dealers from selling competing brands, Virgin Cars flew out of the gate with the world's first multi-brand auto department store, which opened just this May in Manchester, England.

The 30,000 square foot "Megastore" offers 25 automotive brands under one roof at very competitive prices in a friendly, relaxed atmosphere. Vehicles are not grouped by brand, but by themes such as "crowd pleasers," "thrills," "first class" and "adventure."

They sold 150 vehicles in their first six weeks. Not surprisingly, they predict a glorious future selling up to 60,000 cars a year through 12 stores within seven years. Imagine what American consumers would do if, heartened by product quality, assured of price discounts, completely informed and confident in their choices, they could shop for cars the way they've always wanted to.

Dealership ranks are declining, and not just among the small and under-capitalized. To be sure, some dealers are simply cashing out of their high-value real estate. In any event, it is difficult for any enterprise to thrive when profit margins shrink and inventory costs rise. Our own studies show that more than one-fourth of the people who walked out of a new-vehicle dealership without buying said they did so mainly because they didn't like the way the salesperson handled their business. With its high costs and high pressures, the current system hardly serves or satisfies anyone.

Changes like these don't happen quickly, but it will seem like overnight to the inattentive or unprepared. In another 10 to 15 years, consumers will have many more choices of where they can shop for new vehicles. The dealers who prevail will be those who have the wisdom to understand and the initiative to adapt to these unstoppable forces. What happens when information and access are finally unleashed to empower the retailer and his customer to control what, when, where and how goods are purchased? Ask Wal-Mart.

Mr. Power is founder and chairman of J.D. Power and Associates.

Was that the babblings of an impassioned zealot or the wisdom of a kindly industry observer? You be the judge! Of course, he used Virgin Car Sales as an example where they sold 150 units in six weeks out of a 30,000 square foot location. Excuse me; many of my dealers sell that many cars on a good weekend from a five-acre lot. It reminds me of an Old Cheech and Chong movie quote… “Is this guy on drugs or something?”

Email Jim at: [email protected]