Making and Selling Cars: Innovation and Change in the U.S. Automotive Industry

9. From Dealing with Customers . . .

✺ Negative perceptions of automotive dealers changed little through the twentieth century. A 1914 automotive industry study reported that “early retailers were incompetent, doing little more than passing along orders to the factory and informing customers when their ordered vehicles had arrived. . . . The automobile industry from the start to the present day has been an industry of extravagance . . . from the standpoint of the retailer.” Dealers selected expensive locations, erected fancy buildings , paid high salaries to sales agents, spent lavishly on advertising, and offered gratuitous service.1 In 1958 a successful automotive dealer wrote that “automobile dealers, as a group, have developed a considerable degree of consumer distrust. The dealer who develops a high-integrity image will loom high by comparison. It should never be forgotten that many people still think of automobile dealers and their salesmen as shysters, confidence men or old-time horse traders.”2 And a 1996 psychological test administered to top automotive salespeople found that a top salesperson “is inflexible , doesn’t have much empathy, can’t reason abstractly, and is not particularly open or thorough.” The best salespeople were most likely to be skeptical, urgent, ego-driven (and persuasive), risk-taking, and assertive . “They have an above-average need to persuade and an above-average level of self-confidence that allows them to bounce back from rejection. They are assertive and want to get things done immediately.”3 A dealer can be defined as someone who completes transactions, who engages in trading and distribution, or who bargains and makes arrangements for mutual advantage. Inherent in the etymology of the word is the sense that the bargain being struck is fair and just to all parties. In the au251 My daddy says all car salesmen are crooks. —Seven-year-old girl, reporting to her father, a car dealer, what she had heard another child say at a birthday party 9 From Dealing with Customers . . . tomotive industry, a fair and just deal gives the customer an attractively priced vehicle and the dealer a reasonable rate of return on investment. But in the haggling environment of twentieth-century dealerships, the customer left the showroom feeling that the dealer had “won” or “lost” a contest rather than arranged a mutually advantageous transaction. Incompetent Early Dealers The unflattering judgment of dealers in 1914 came from a Curtis Publishing Company report, one of the first independent assessments of the U.S. automotive industry. Curtis, a leading publisher, wanted to know why few motor vehicle producers were advertising in magazines, even though at the time magazines were the most important medium for reaching a national audience simultaneously. Curtis was interested in the potential of the automotive industry as a future source of revenue, because its Saturday Evening Post was carrying about 60 percent of all magazine advertisements for new cars.4 A pioneer in the scientific study of market trends and consumer behavior , Curtis established a division of commercial research in its advertising department in 1911. Two years later, the division manager Charles Coolidge Parlin and assistant manager Henry Sherwood Youker undertook a year-long study of the automotive industry, which was compiled in a voluminous report with an unappealing title, Automobiles Volume 1B. Gasoline Pleasure Cars. Report of Investigation. The Curtis report concluded that the future of automotive advertising was bright if dealers improved their marketing ability.5 Cars Sold for Pleasure Early automotive dealers were incompetent, according to the Curtis report , at least in part because most were drawn from three unpromising groups: nephews and favorites of the well-to-do, those who had failed in other businesses, and bicycle repairers. Wealthy people set up their dependents in automotive sales because the trade seemed more “genteel” and respectable than other types of merchandising. Selling cars offered opportunities to make money without engaging in real labor and to go “joy riding ” in the product. The second group, described as “men who had failed in other lines of merchandising and were looking for a new field of adventure ,” turned “naturally” to selling cars, while “those who were succeeding in other lines naturally hesitated to give up profitable employment for one Selling Motor Vehicles ✺ 252 From Dealing with Customers . . . so new and uncertain as the auto business.”6 Not wishing to be bound to unreliable dealers, manufacturers typically placed a thirty-day termination clause in the franchise agreement.7 The third group, bicycle repairers, had little skill in salesmanship and did not know...