For nearly a century, the way automobiles were sold in the US was through a franchised dealer network. Despite early dalliances with selling vehicles directly, through mail-order catalogs, and even traveling salesmen, the dealer model was initially one of convenience for the manufacturer and ultimately one enshrined in law in most states during the 1940s and 1950s.
This model distinctly separates the manufacturer of a vehicle from the entity that actually sells the vehicle to the customer. You can’t purchase a Jeep Wrangler directly from FCA (Fiat Chrysler Automobiles), for example; rather, you must make the purchase through a Jeep dealer that has a franchise agreement with the manufacturer. Similarly, you could not purchase a vehicle from the manufacturer’s website until upstart Tesla upset this model, in some cases in direct violation of state franchise laws.
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Ask any of the manufacturers publicly whether they preferred their traditional franchise arrangement to the “Tesla model,” and they’d loudly proclaim the superiority of franchised dealerships; however, customers indicated a preference for a Tesla-style online shopping experience, as did some industry insiders. Some manufacturers attempted online sales in partnership with their dealers, but they were often half-hearted efforts since the legal and logistical difficulties of facilitating a transaction among three distinct parties created a convoluted buying experience that consumers didn’t exactly embrace.
Blowing up “normal”
Arguably, the big reason for the failure of online sales efforts by traditional automakers was the standard way of selling vehicles as good enough, and the effort and investment required to create an online channel wasn’t perceived as worthwhile when no one (aside from Tesla) offered a similar capability. People had been buying cars through dealers for a century, and designing and implementing the technology, relationships, marketing, and execution required to create an effective online sales channel was perceived as throwing money at fixing a process that wasn’t broken.
A time-tested business model centered around driving customers into an enclosed space full of strangers and ideally getting them to sit in an even smaller space with a stranger, with no idea when that space was last cleaned, suddenly doesn’t look that great during a pandemic brought about by a virus that spreads primarily through human proximity.
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Suddenly, dealer networks that saw vehicle delivery as “too expensive” and online or phone purchasing as distractions were able to implement these practices in a matter of weeks. Manufacturers that dragged their feet or saw technical integrations with dealers as too costly and complex figured out ways to get the job done in record time. An existential threat to their business model suddenly blew up longstanding objectives and made hurdles that seemed impossible to overcome mere speed bumps that could be resolved in an afternoon.
The auto industry is obviously not the only one that has long-held beliefs on how you do business that are being questioned and revised out of necessity. The mass transition to remote working is another obvious example that most organizations are familiar with. There are likely dozens of other company logjams, unquestioned assumptions, and “ways we’ve always done it” that once seemed like impassable mountains, and perhaps have turned into insignificant anthills.
Question the (previously) unquestionable
There is more than enough doom and gloom being penned about the post-COVID-19 era, but one extremely positive aspect is that it allows leaders to question even the fundamental assumptions about their businesses, including century-old business models that were regarded as industry gospel just a few weeks ago. All of us likely have a set of “if only” initiatives that we’ve attempted to advance, only to be met by significant resistance. It might be political, historical, or based on reasons that no one could actually articulate, but everyone assumed were immutable truths.
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Dust off some of those initiatives and look for those where the objectives are even more relevant in the new normal. Ideal candidates allow your employees, partners, or customers to engage differently with your organization. They were probably perceived as good ideas pre-COVID, but lacked traction since they were too expensive or complex, or the current ways of working were “good enough.”
While it might be somewhat flabbergasting that momentous objections that derailed your initiative are now readily dismissed trivialities, timing is sometimes the key to success. You’re probably tired of hearing about how we’re in “unprecedented times.” Why not use that to your advantage to build up your business?