Archive for: December 2006

Just because they’re introducing a new approach to presenting price/tradein/financing options to a buyer doesn’t seem to be a compelling reason to change the name of the business. There’s a host of expense and planning required to change the name (and probably some trade dress as well) for over 250 dealerships.
No, I suspect AutoNation felt their reputation was in some way tarnished and that a name change could change the reigning perceptions and boost sales and profits.

I don’t think that strategy works very well. Old brands tend to linger, particularly with folks who have had disappointing experiences with the dealership. Every time they drive by a location in which they’ve had a problem, that memory comes back no matter that a new sign bedecks the facade. And a bad experience at one shop lingers for the other shops bearing the same name.

I believe most people think a business that’s re-branding itself is doing so because it wants to rid itself of a bad reputation. I also believe people believe that only the name’s been changed. That applies also to businesses that have been sold and now “under new management”. Do we really believe anything’s changed? I expect the old reputation lingers, sometimes for years.

So what could AutoNation have done to redeem its reputation and sales volume? The best strategy I believe is to “fess up”. Admit their business practices were not “customer friendly”, that their people were not encouraged to be customer advocates. In short, be honest and candid. Demonstrate through this action that they have now adopted a new way of doing business.

The publicity alone would be invaluable.

So often a name change is a cover up. But if the elephant is still in the room, elephant shit is sure to follow.

Martin Jelsema
303-242-5975