General Motors has embarked on what it believes to be the most substantial dealer image transformation in the automaker’s — and possibly even the auto industry’s — history. By 2016, the automaker expects 2,500 of its 3,000 Chevrolet dealerships to complete a set of voluntary renovations, an undertaking that is expected to total a hefty $3 billion collectively. Similar programs are in place for Buick, GMC, and Cadillac dealerships.
According to Alan Batey, who until recently served as President of Sales and Service at Chevrolet, the sheer scope of the non-compulsory program shows just how much Chevy stores need it. In fact, back in 2009, when the program was first launched, only five percent of Chevy dealers met corporate standards — the lowest in the industry; what’s even more eye-opening is the estimate that 60 percent of Chevy stores were built before the mid 1970s, putting Chevy at a competitive disadvantage when compared to close competitors such as Toyota, Honda, and Volkswagen.
“We were well overdue for this massive network makeover. We needed to transform the look and feel of our franchise,” Batey told Auto News back in May. It was definitely one of the key strategies we needed to implement to be successful.”
Voluntary… Or Not So Much?
While GM is touting the program’s optional nature, dealers who choose not to participate may not receive extra bonus cash from GM — giving them less leeway in bringing down prices when locked in a bidding war for customers. This can directly translate to possible lost sales of customers who would purchase an automobile from a direct competitor. Those dealers that fulfill the new dealer image program get incentive money that can range from $50,000 to $100,000 a year for smaller stores and be as much as $1.5 million for the bigger stores.
Another disadvantage for the stores that opt out of the changes will likely be the general impediment seen by customers who are cross-shopping a competitive brand with what could be described as “nicer” and “better” showrooms that improve the overall image of the vehicles and the brand. And while some dealers completely support the renovations and agree that the changes are necessary to remain competitive — despite the temporary inconvenience to customers in the form of construction and renovations — others are still opposed to them.
The Requirements
According to internal documents obtained by GM Authority, to comply with the dealer-image program, Chevy dealers are required to have a bright-blue archway with aluminum panels and a silver fascia. That seems like a reasonable requirement, but how about the fact that all signage — such as the printed “Chevrolet” marque as well as the neon-blue signs with the dealer’s name — has to be ordered from the Pattison Sign Group in Knoxville, TN? Stringent requirements like these make some dealers resistant to the program.
Specific facility design guidelines don’t end there, as a plethora of other requirements are often vendor-specific:
- The light gray floor tile needs to be a specific shade of gray and be a minimum of 12 inches by 12 inches in size; ideally, the tile should by 16×16; the striped pattern that runs perpendicular to the showroom facade is preferable.
- The light wood furniture should be supplied by non other than Herman Miller.
- The greeter station is a non-negotiable requirement across the board, even if it won’t have anyone sitting at it.
- The distance between the sales desks and the main customer entrance needs to be at least 20 feet.
- Sales offices need to have glass fronts and glass doors while an explicit shade of blue, silver, or orange paint needs to adorn the rear walls of any offices that face the showroom.
- At least five framed images must be present in the showroom, preferably installed in pairs or groups. Walls 12 feet or longer should contain 3 frames; walls between 5 and 12 feet in length should have 2. These can only be purchased from one vendor — DCI Marketing of Milwaukee.
- DCI is also the sole provider of display stands for wheels and other accessories that are part of the program’s requirements.
- Customer lounge chairs must be ordered from a supplier that charges $1,500 per unit.
- Dealer awards of any kind should not be in the showroom, while a special kind of halogen light is called for in order to “present the Chevrolet vehicles to customers in the best possible light”, read the guidelines
The Opposition
Some dealers call the demands of the dealer image program micromanaged, demanding, and inflexible, especially when it comes to vendor-specific requirements and control over the renovations. Those not in favor of the GM-arranged prerequisites say that they could save money by obtaining items from other vendors; furthermore, GM Authority has also received several letters from dealers, with those in small towns reporting a negative sentiment towards “the new and shiny stuff” from their patrons, who are used to the homely, small, family-owned business feel of their local dealers.
In retrospect, many stores that have already completed renovations have written to GM Authority stating that the results looks great and that they are proud to have excitement, again, in their store as well as the rebirth and the plethora of exciting new vehicles from their brand.
The GM Authority Take
Barring a few outlying exceptions — such as the small town instances — GM’s dealer image transformation program is a vital necessity that has been a long time coming.
Moreover, the tightly-controlled nature of the renovation requirements set out by GM is a substantial positive in our book, as it will present the Chevrolet brand — as well as other GM brands — in a consistent and homogenous fashion around the nation, and we assume — eventually — the world. This is a vital part of building brand value, trust, and credibility — aspects that should be the cornerstones of every product and brand offered by GM going forward.
Sure, some dealers could have obtained certain items for less; but we have a hunch that the savings would be minuscule in the grand scheme of the renovations and it’s very possible that the savings would have even resulted in an inferior product — because, let’s face it, dealers aren’t interior designers or decorators — while GM undoubtedly did the leg work on its end to set the specifications of the program in motion.
Ultimately, it should be all about the customer and the customer experience — something the dealer renovation program seems to highlight faultlessly; in fact, we like to think of Apple and the uniform Apple store experience as the benchmark for an exceptional retail program. Those that are familiar with Apple would be quick to point out that Apple owns and operates all of its retail stores. That said, it’s our opinion that GM did the best it could with dealerships that aren’t under its full control. As one dealer recently told us, “it’s GM’s show and we [the dealers] are the actors.”
Comments
It’s nice that they are remodeling the stores. Two of the larger one here have been done already. They are indeed nicer to visit. I’d like one additional item. Give the customer a way to determine that the service department is trained and competent on the vehicle he/she spent their hard earned money on. That would really enhance the customer experience!
I agree many dealerships need updating, but specifying a single supplier seems a bit dictatorial unless Chevy has made special deals. However at $1,500 for A chair it doesn’t look like it. May not be, but it smells of kick-backs and bribes
Yes, the renovations are definitely necessary and does have to push them a bit, dealerships will need some prodding and rules are necessary for a cohesive strategy and to prevent all out mayhem and chaos with differents dealers ordering completely different items with completely different quality and completely different everything. However, I think the rules are a bit too rigid and there should be some flexibility in the rules and let dealerships make special requests like to be exempt from certain requirements.
One – size fits all is never the best for customer experience.
If you’ve ever experienced the chairs in question, they are beyond excellent. And considering the chairs will last for upwards of 5 years (plus warranty period), it’s a fair price to pay for customer comfort, quality, and uniformity across the Chevrolet brand experience.
customers often comment how comfortable they were while sitting in our waiting room, which is furnished with chairs that we have kept in pristine condition for the past 10+ years, and they are very neutral regarding style, so they dont look “dated”. those chairs were less than $200 each..even figuring for inflation $1,500.00 each for any chair sounds completely unreasonable. its a shame that my employer is being forced to purchase these chairs as we are in the middle if the updation construction process right now…from what i see at the dealer level, speaking for a “small town” dealer, is a lot of money wasted on little “details”, like “special” chairs and limmited vendor or design choices, that could be used to focus more on training, updated equipment, and many other “small” deatails that are more customer focused than just looks alone. a customer friendly environment has just as much to do with dealership personel and thier ability to satisfy and meet customer needs.
Jim — is GM chipping in to help cover the costs of the physical update to the dealership?
yes, GM is participating. however, they are only helping with cost if vehicle sales and CSI objectives set fourth by them are met….basically we qualify for support if we meet quotas. in theory its a great plan for dealerships who are effective satisfying customers before and after the sale, which naturally increases and or maintains business…therefore most likely meeting quotas. the larger problem is the timing, and the “up front” cost. in many “small town” dealership areas the economy is not good..lets face it…times are tough everywhere..but some cities and towns are worse off than others. its the “little” dealership that gets hurt the most..add the factor of…do or die so to speak it doesnt make for a happy work environment. it adds additional stress to the already tense environment because business is very slow. personally i view the change as something long over due and a good move. the only problem i see here at the dealer level is the high cost of some of the “required” changes…for example, the $1,500.00 ea chairs, the, almost $5,000.00 welcome station..which is very similar to the one we already have..but we have to replace it anyway, and a few other “micro managed” details which ties up a lot of our money that, if we meet the quotas, we can recover some of. its a bite “the bullet situation” that a lot of dealers simply cant chew on without borrowing…but much of the upgrades do need to be done.
Ah, the “architectural shopping list” as I call them.
The real challenge is to put forth a pre-working design from the outside-in while avoiding any alteration to the exterior volume; do so and you die! 🙂 It’s also further compounded by all the hard points that are in place since just one of those can screw over GM’s list of showroom demands.
I know this whole mess is done for the sake of branding, but really not much of this is overly complicated. The only real challenges might be the location of the greeter desk, the sales desks to main customer entrance distance, and the interferences with the main entrance fascia. Everything else is a cake walk.
Don’t forget dealerships must now be standalone structure and not in a building shared with any other brand.
I just had a second thought on this subject.
Let’s see a white building with a sky blue entrance facade? Are they trying to confuse customers into thinking it’s a Honda dealership?
I can see the need for standards. When I visited my Buick dealer one could just about trip over the desk of a salesman when walking through the front door. I was really surprised. Buick? So I expected to get immediate high pressure sales, but the man behind the desk looked bored and behaved disinterested.
I’ve met many salesman at various dealerships who were similar, often having little knowledge of their product. Cosmetics are important but not everything. The people, especially the mechanics, are more essential. Bad mechanics will do more harm than poor salesman to wreck a dealership, and poor salesman will do more harm than less than appealing esthetics.
I agree GM needs to not worry so much about the looks of the dealer and they need to be more worried about cusumer service iv iv bought two brand new gm trucks in las year and half and referred my uncle and good freind of mine to the dealer witch was a mistake and they both bought a new truck each and they got a thank you letter personaly from the boss and hats and jackets and both got coffee mugs well I got jack shit and my uncle only leases his buddy did by his I didn’t even get a thanks or hand shake or even a business card I had to ask for a key chain and so I decided to talk to owner and he seemed to not care so went and started dealing with another out of town dealer and they seemed lazy and didn’t seem to care seemed to me like there just there for paycheck so bin seriously considering switching brands unfortunately I love Chevy trucks but seems the dealers just don’t care about customers
$1500 for a chair is not excessive. I went shopping for livingroom furniture and was surprised to find that a chair costs almost as much as the couch!
And while I agree that disinterested salesmen and bad mechanics can harm a dealership’s reputation, there is alot to be said for the aesthetics of the building. I have relatives in Colorado and I visit there frequently. They don’t have any department stores that are tmore than 10 years old – they tear them down and build new. When my relatives come here to NY, (where everything is old) they say people back in Colorado wouldn’t tolerate shabby stores. People have much higher expectations today than before; maybe not in small town America, but certainly in cities and major suburban areas. These renovations are overdue.
I don’t care what the place looks like just don’t rip me off!!!! 🙂
One item you will not find at the newly renovated dealerships is the “GM” logo. Kind of a sign of the times, so to speak…………
Nice, newly updated dealerships with a uniform appearance are great, but how much difference does it really make? If a customer is looking at a Cruze vs a Focus and they think cars are fairly equal, but he can get the Focus for $1K less at the outdated but “OK” looking Ford store, which one gets the sale? I say the Ford. Comfortable chairs are fine, but isn’t buying a car still about right product at the right price while being treated right? I think a lot of these factors are very important at luxury dealers, like Cadillac, but not nearly as important at a Chevrolet or even Buick/GMC dealer.
I can’t argue with your point about a customer cross-shopping for the best price. But perhaps the improved lighting, seats, etc. would cause some customers to linger in the showroom a little longer, not fully aware of the power of atmosphere that keeps them there. The longer the stay, the better chance that the sales staff has to close a deal. As far as the product, I think the stuff in Chevy’s pipeline is going to be up to the task. The shopping public, having a negative view of GM from the past, just needs a little more convincing. More time spent in the store equals more sales – Department stores know that equation, and they do it well.
And if I’m gonna have to fork over $30K for that 2014 Impala that I want, that oughta come with a comfortable seat and a biscotti!
I’m gonna have to start saving my shekels for the downpayment.
Very True…
@LFX323HP Sure, there are individual cases where multiple variables are at play. But I think that the ultimate goal is to follow a set of best-practices, such as:
– make the best vehicles
– present the vehicles in the best possible environment
– provide the best customer service
– provide the best after-purchase service
– provide clear and timely communication before, during, and after purchase
– there is also a pricing component here, but it’s too lengthy to get into in a short list like this
So if you take the second item out of the list, and everything else remains equal, but a competitor (Toyota, Honda, Ford, etc.) has better facilities, then it’s just one way in which they have the upper hand.
Furthermore, I’ve learned that one can never underestimate the customer’s impressions. A better facility will always work in your favor by presenting vehicles in a better “light” or fashion, if you will. The customer may fall in love with the appearance of a facility first, then be more open to liking your vehicles — especially necessary when attempting to bring back customers from the imports. Conversely, a sub-par facility, which was what most Chevy stores were before the image program, is just one more barrier to selling more cars.
All valid points for sure, there is something to having an appealing facility that will bring traffic your way. I also agree that some facilities were way outdated and needing help, but then again some were/are just fine?
I’m also thinking of a few years back when I sold new GMC’s. A majority of the new GMC customers would not even enter the door, they would head straight to the lot, see what you have on-hand, check the product itself. I can’t imagine most of the new Sierra truck buyers I worked with caring one bit about what color tile , or how good the lighting is in the showroom? A good selection of properly optioned trucks and a professional salesperson is what they were looking for? Not ” I would buy my Duramax truck here if you had better chairs”?
I will admit when the Denali vehicles came along it was a whole different customer in play. Quite frankly it was a bit of a shock and it took some adjusting to get used to that type of customer.
I’ve worked on many of the re-designs. One look across the board does NOT make sense and was shortsighted on the part of GM. As this article mentioned, the redesign totally disregards small towns, both with the expense required for them as well as the shiny urban look they’re required to have in a location where it seems out of place. Other dealerships we’ve done had nicer materials, real stained cherry woods (vs GM’s new light laminate), nicer tile … and still they had to swap out these nicer materials for the design compliant materials. Other dealerships I’ve worked on have been new – like 6 years old – and then they’re required to come in and spend $300-600,000 at least on a re-design? It seems some sort of grandfather would work. I’ve seen another dealership that looked like a mountain lodge – I can’t even imagine what they’d do to that to strip away it’s awesome wood timbers to put up their metal panels and plastic laminate. Uugh! I think they could have done a better job, not just focusing on urban dealerships as the design standard.
Dealer: “We have our non-negotiable $5000 greeting station.”
GM Corporate guy: “How come there’s only one car in the showroom?”
Dealer: “There’s only one doorway. We can’t get anything other than a Spark in or out anymore, because of the greeting station.”
lol I am very sure they would have more than one door to get cars in and out of the show room 🙂
Many smaller dealers, such as the one I work for, have one entry into the showroom which a vehicle can fit through. In our case the showroom vehicle entry is on one side of the building because the other side is too close tp the property boundaries. This was done to maximize lot space for new and used vehicle inventory…oh, well. A “smart” architect/designer(meaning GM design team) should focus on more than looks alone, which seems to be the larger focus. Functionality of daily business should be top priority, then incorporate the GM branding/image into the atmosphere in which the customers AND dealer employees conduct business. In a nut shell…design or re-design the buildings around how business is conducted in all departments AND customer comfort. Happy, efficient employees = happy customers.
Jim — is the problem you’re describing a real one? As in, does it exist in the real world?
If so, it should have been caught way before the architecture/design was implemented by construction (the architecture team contracted by GM as well as the dealer). That said, the greeter station should be on wheels, allowing one to easily move it in when re-arranging the floor. Obviously, design and functionality need to work hand-in-hand.
Dont get me wrong, the overall redesign is a good thing for everyone, especially here, in a “small town” dealership setting. We are pretty much done with the upgraded appearance of the outside of the bulding, and about 30-40% done with the inside. From the street the place is looking great, however there are some issues here specifically because of overall building size, positioning on the property and being in the North East has added the “snow” factor. Im sure many dealers will have problems specific to thier situation, so to answer your question, are the issues I speak of in the real world..yes, and no. I simply think each dealer should have moredesign choices focused around thier dealership functions. A lot of the issues here do not apply to every dealer. In my opinion, the focus of any facility upgrades with the intention of customer satisfaction and product branding should be done from the inside out. Which is most definetley dealer specific.
The HON Company has been providing furniture for dealerships across the country. This furniture can be used as an alternate to the stated standards. In most cases this product can offer significant costs savings while still providing the image desired by GM and carrying a Full Lifetime Warranty. Feel free to reach out with any questions.
Danny Emerson
[email protected]
563-299-9167
I’m currently working with a dealer that wants to specify LED lighting (US made and privately owned) for a design build project for new dealership. I called the design firm and only the lighting on the spec will be approved, no exceptions. I am interested in providing GM wih a US made, quality LED lighting solution. We have lighting facts label on all of our product and 5-10 year mfg warranty.
I want to work with GM to get on the spec list for remodels or design build projects. Please reach out to me who I might contact at GM to do the dog and pony?
Brigette
So..what would happen if a Chevy dealer took the incentive money and never made the changes, but happened to email pictures of a sister company that actually had the changes in order to fool GM?
This is pretty incredible! It’s great to see how dealerships are progressing with their design and structure to hopefully better serve their customers!
So, does anyone know how GM will lay out its dealerships? Being that Volkswagen, who owns VW, Audi, Porsche, Bentley, Lamborghini, and Bugatti, does not sell them all under one roof. For instance, the Volkswagen shopper is miles different thatn the Bentely shopper. Heck, I don’t even see Porsches sold alongside VWs. Surely, GM will urge to separate Chevrolet from Cadillac, or want to put Cadillac in its own dealer system.
I would be happy if my Chevy that just ran dependably. Who cares what the dealership looks like.
GM, spend – spend – spend
Pay for it, raise – raise – raise the prices
Pickup truck cost $50,000, you have to be kidding.
Sounds like they are taking lessons from uncle Sam.
The more you spend, the more you charge.
How about $50.00 oil changes, it won’t be long.