Seattle Honda/Toyota Dealer Decides To Try To Sell Cars Like Tesla Does, Rather Than Trying To Shut Tesla Down

from the that's-one-step dept

Over the past few years, we've highlighted how frightened autodealers have absolutely freaked out about the way in which Tesla sells its cars. If you don't know, rather than having a bunch of independent dealers, Tesla sells direct, where you mainly buy via its website. Rather than dealerships, Tesla has showrooms where you can go check out the cars. The pricing is clear and obvious and it's much lower pressure. Dealers have tried a variety of tricks to actually outlaw Teslas from being sold in their states, even arguing that Tesla's website is illegal. Thankfully, most states aren't falling for this, and even the FTC has supported the Tesla way of selling cars.

Apparently, some dealers are finally realizing that if you can't beat 'em by trying to make them disappear, perhaps you ought to compete. Via Jalopnik, we learn of a dealer in Seattle (who owns both a Honda and a Toyota dealership) who has decided to adopt what he thinks is the "Tesla model" for selling cars -- single price, no haggling, no separate finance department whose there to screw you over on the deal terms, and transparency about the loan rates.

What's more, the dealerships have no F&I managers. Salespeople handle the loans. Learning to do that isn't easy, so Miller and Mohammadi have hired contractors to do some paperwork and walk the salespeople through the process.

Prices are fixed, and so are interest rates. Customers who need financing can refer to a chart on the wall, tracing their finger from their credit score to the amount of the loan.

Of course, the story also notes that this shift hasn't been easy. Most of the existing sales staff left as they couldn't deal with this setup, and sales at the dealership dropped significantly -- though they've since rebounded. And, of course, there have been other dealers in the past that have adopted "one price/no haggling" setups, but studies have shown that many customers don't trust such deals, assuming that the "one price" is likely to be higher than they could get by negotiating, even if they don't like haggling.

While I think it's a smart move to try to compete, rather than ban, innovative competitors like Tesla, it feels a little bit like a cargo cult copying situation, where the focus is on copying the obvious superficial aspects of what Tesla is doing, but not the deeper hidden reasons. In Tesla's case, it's a combination of factors that are selling those cars, including the cool factor, the environmental factor and the overall prestige of the car. Hondas and Toyotas, while recognized as reliable, don't have all of those factors. Plus, since the Tesla sales model is for all Teslas, there is no other option, so no one feels that the single price offering is a rip off. That's not the case when a single dealer does something.

So I think it's good that this dealer is looking for a better model, but it's going to involve a lot of experiments and innovating, beyond just copying some of the superficial aspects of what Tesla does.

Filed Under: auto dealers, car dealers, cargo cult, competition, dealers, haggling, innovation, sales, superficial
Companies: honda, tesla, toyota

Cargo Cult Reverse Activism: Maximalists Think That If They Use Social Media They Can Counteract Public Concerns

from the yeah-that's-how-it-works dept

We've talked in the past about cargo cult science and how a rather superficial understanding of complex situations leads people to only copy those superficial elements in the belief that they are why something works. Then, of course, when it doesn't work, they're confused. It's why South Pacific islanders thought that if they staffed the airport, American soldiers would return with supplies. It's why GM thought that if they just rebuilt the NUMMI plant inch-for-inch, they'd get the same production elsewhere.

I'm left thinking about this as I read about how some IP maximalists at a gathering about how to "counter" the public are discussing the importance of social media and their own usage of it. Even reading about the discussion sounds oddly stilted -- like your parents trying to sound cool by using youth slang:

The role of social media in promoting IP will be a key topic. For example, both USPTO Director David Kappos and EPO President Benoit Battistelli regularly write blogs about their respective offices.

The offices represented on the panel also use Twitter and Facebook as well as conventional media such as TV to communicate with users and society generally.

Oh my goodness. Can you believe it? They blog? They use Twitter and Facebook? They must know everything!

Perhaps, at some point, they'll realize it's not the usage of social media that made a difference, but the fact that the people using social media find these issues to be serious and important, and don't believe the official explanations for why they have to lock down content.

Filed Under: cargo cult, copyright maximalist, social media

Why Just Copying Isn't Enough: Cargo Cult Science And Copycats

from the gotta-leapfrog dept

We've talked about cargo cults in the past around here, and Boing Boing points us to a great video of a talk by Jeff Veen, which argues that copycat innovators are a form of a cargo cult: The point he's making is one that we've tried to make here many times in the past -- though his analogy is much better than most we've used. Basically, it's easy to just copy what you think is cool about a product, but that's rarely (if ever) enough to actually get people to buy. This is an issue we see all the time when people get upset about our position on patents. They say that, without patents, someone would just come in and "steal" the idea, and then where would you be? But, the fact is, just being able to "copy" the product isn't enough to get it sold.

If you're truly innovative, then you not only understand your product better than some random copycat, but you also understand what makes your market want your product.

That can't be copied. Not easily. Yes, the copycat may win over some customers, but it's not the same. And, by knowing the product and the market better than anyone else, you should also be able to stay ahead of the curve and keep innovating. The copycat just has to catch up -- they're running towards where they think you were, when you may already be well past that.

But the comparison to a cargo cult is quite accurate. The cargo cultists built up their faux airports, thinking that it would bring in the same wonders as the real wartime airports did. Companies make copycat iPhones because they think that people will suddenly rush to buy them like they bought the iPhone. But it doesn't work that way.

Filed Under: cargo cult, copycats, copying, design, innovation, iphone, jeff veen, patents