Flying home from my Easter on Long Island I was captivated by a story in Southwest Airline’s Spirit Magazine.
I will wait while you all finish snickering.
The story is about an organization called Bonnie CLAC that works with people with limited income and less than perfect credit to secure reliable transportation at a reasonable price.
Over the last two months I have been spending a great deal of my time at work on a “special finance” program (special finance is the nicer way of saying bad credit). This has been an eye opening experience for me, and has shown me some areas of huge need when it comes to our tendencies as consumers. What I like about Bonnie CLAC is that it is not about selling a car, but it is about dealing with the root issues of credit problems, and then solving a the transportation challenges of an individual.
Over my last eighteen months selling cars I have collected numerous stories of people with credit issues. People with two and three repossessions, multiple bankruptcies, credit scores in the 340s, and multiple foreclosures (especially lately). With very few exceptions the people in these situations have been (to steal Bonnie CLACs term) financially illiterate, and while their illiteracy does not leave them blameless, there are many places that thrive on the financially illiterate.
Thinking back over the last month I am unable to count the amount of times that I have come across a customer who is paying a ridiculous monthly payment for a vehicle that is on its’ last legs, or is altogether dead. I continue to run into people who are driving a car because of its’ name (BMW, Lexus, Mercedes, etc. etc.) not because it is affordable or practical. I have had many conversations of late with people that are driving luxury cars with over 150,000 miles on them, and are locked into three or four more years of payments on them, while they are continuously in the shop for repairs… and what was the car of their dreams becomes their worst nightmare… keeping them in the cycle of debit and poor credit.
I recently posted about B Corporations, and the idea of the triple bottom line has stuck in my head for quite a while… I wonder how we go about morphing the traditional car dealership into a B Corporation. How do we go about serving people, and helping them get out of the sick cycle that is bad credit, while still turning a profit and solving their transportation issues? Could a Bonnie CLAC model work in Baltimore (or any other urban environment, for that matter)?
I would love to hear what you all think on this stuff… enlighten me, please…
“I wonder how we go about morphing the traditional car dealership into a B Corporation. How do we go about serving people, and helping them get out of the sick cycle that is bad credit, while still turning a profit and solving their transportation issues?”
Good stuff man.
I’ve been thinking about this exact same idea for a while now, but not with cars, with computers. People get ripped off all the time with tech stuff, they either pay a ton to get something simple fixed, or they end up just buying a new computer. It’s crazy.
I’d love to think through how to have a B Corporation tech support company… I think it could work.
After reading this post, and being curious about how these companies make do financially, I researched the B Corp website a bit more. I think what I find interesting is the concept that these corps want to create benefit for all stakeholders, one of which we would assume is the final consumer (and we’d also think that it would translate into a lower price). However, after taking a look at the founding companies, I don’t think these corps are as consumer friendly when it comes to their prices than one would hope.
I guess I would take it one step further, as you two have mentioned, and question, how can one create benefit, including being a value priced product.
Unfortunately, we are based on a capitalistic system where people are always looking for ways to make the next dollar. I don’t know that we will fully overcome that unless the executive level of companies start to appeal to the consumer before their stockholder. Other than being a non-profit, most CEO’s and other high level officers would probably get fired if they don’t meet the expectations that the shareholder has for their position.
Disagree? Agree?
I think the way for it to work would be to keep a company private, and to be ok with making enough to live off of, and put enough money into the business to keep it going. I think it starts with a few people who want to make a difference.
The economic reality is that the product that the B Corp sells, as with Fair Trade coffee and the like, will cost more.
It has to.
The process is more expensive because it is more labor intensive, and while turning a profit is not as huge of a priority as it is with most corporations, there is only so much room to eat up those costs in the price of the products…
Does that make sense?