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Every contributing member of ADM knows the answer - or they should; of course we need to give the customer the price. The real question is when, what and how!

One advantage that virtual showrooms have over real world showrooms is their ability to provide information - including price - more efficiently and in a more transparent manner. The problems start when we don't use that to our advantage as well as the customers who can now change the dealerships that they are "negotiating" with as fast as they used to change channels!

Low prices posted as either "loss leader specials" or competetive "one price - best price" strategies were fine in the real world when the customer used the newspaper to flip through for the best price on the car they were looking for without reading the fine print that qualified the offer to one stock number or explained the $5,000 down that existed in the disclaimer. Once they drove to the dealership the keys on the roof or the fast talking salesperson still stood a chance to sell them something today since they were tired or running out of daylight and they wanted to buy a vehicle - although "tomorrow's sale and future service" became much harder to save.

Well, tommorrow is here and our reputation has preceded us onto the Internet which is why so many customers prefer it over the real world experiences that drove them online. Unfortunately, the Internet has a completely different set of challenges when it comes to price so our own previous real world experiences have little value on our virtual showrooms.

Many dealer's first experience on the Internet was to use the same pricing policies as they did in the paper. That practice gave them the WRONG impression that you can't make money on the Internet. Their expectations were that if you don't post your lowest price then the customers will not stay on your site and they will go elsewhere.

Well, maybe - but aren't they going to do that anyway? Online relationships are just as large a part in the "buying" process as they used to be so the "best price" isn't always the lowest price. That wisdom survives onlne becasue the human nature that drives the buying decsion survives.

The solution is "TRANSPARENCY" - "HONESTY" and EFFICIENCY" in delivering a fair price on the vehicle that they are online looking for first - followed possibly by the one that they need as well as providing information on other key decision factors like trade-in value and financing with fast and easy answers - NOT MORE QUESTIONS!

There are several newly developing Internet applications that expedite the "negotiation" - or more accurately defined information - processes. Live Chat and click to call applications, online transaction tools, links to trade-in values on credible third party sites, comprehensive credit and payment calculations and legitimate online live negotiations ranging from a self serve desking tool to a fair market bidding application.

I am not limiting my suggestions to "conversion tools" that are designed to force a real world visit or a disconnect to an email or phone call to get the price and the relevant buying information - I am suggesting actual disclosure online - real time - to arrive at a fair price that will survive competitive shopping based on the RELATIONSHIP earned by a transparent negotiation on the virtual world that will transfer to the real one that will earn today's sale while preserving tomorrow's service and future sales.

Of course I don't want to limit this forum - the question or the answer - to my brief comments.

What do you think and how do you post price - OR NOT?

Tags: automotive, internet, lead, management, marketing, price, process, quotes, sales

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Replies to This ADM Discussion

Great post Philip. It all comes down to engaging the online customer. Using the 'conversion tools' you cite is one way to get the customer actively involved. The goal of this involvement should be the opportunity to contact the customer. The internet won't necessarily 'sell' a car, that's what salespeople do, but the internet can put more prospects in front of more salespeople leading to more sales.
Simply posting 'internet prices' on the website is not the answer. Customer sees price (anonymously) and bounces to the next site where they are forced to provide contact info to get the price. And now the dealer who tried to be 'full-disclosure' never had a chance to contact the shopper because they remain a ghost.

I agree with you, Joseph. It is all about engaging the online customer. They are doing their research online and the #1 goal is to start a conversation. If the price isn't listed, the sales team must be trained accordingly. A "what's the price?" inquiry is a different type of lead that needs to be handled differently. As an example, the most effective Craigslist company I've seen has an option to not display price. When they don't list a price, this gives dealers an opportunity to identify someone in the market who most likely would have overlooked them in the "noise" of Craigslist search results. If a dealership's sales team/BDC department has good phone and/or internet lead skills, not listing price allows them to talk to more people, and convert more sales.

Choosing the right price has always been the car dealers greatest dilemma, on or off the Internet:

Maintaining optimal Internet pricing manually is extremely difficult. Cars are volatile commodities. Supply & demand are never constant; so by definition car pricing should be dynamic, not fixed.

Dilemma 1: If you don’t display prices you might not get any inquiries. If you do show prices then they better be interesting, otherwise you certainly won’t get any response. Catch 22! If you are always forced to open negotiations at your lowest, least profitable price, then how can you ever hope to hit a home run?

Dilemma 2: Pitching “No haggle low prices” sounds tempting, but how can one price fit all? Every buyer is not the same. Each has their own unique set of circumstances, priorities, and values; so a fair price for one may not be fair enough for another. What about all those less demanding buyers who may have been willing to pay you more!

‘So, either you lose deals because your price is too high, or you end up leaving money on the table, because your price is too low. Either way, you lose!

DealMaker seems to be about the only solution that is not trying to reinvent the wheel. Every other commodity is traded using dynamic pricing. Two trillion dollars worth every day in fact. Why is it that the auto industry cannot resist the urge to be different?

At http://dealMaker.com traders have a choice to either manage deals manually or switch to autopilot. Autopilot can optimize prices continuously in real-time. Prices can either be “pegged to market” or floated at a set or variable discount or premium to market. Traders can still choose to confirm trades manually but they don’t need to monitor positions continuously.

At http://dealMaker.com deals are always extremely easy to evaluate simply by taking a quick glance at dynamic colour coded bands contionuously showing the discount or premium percentage to the median market price of every deal. The best deal always rises to the top of the market so it really is a no-brainer. Buyers can buy instantly with no haggling, confident that at that moment in time they do have the best deal the market can do. More important for our dealer partners they can see exactly how much the market will bear before they accept any deal.

NOW THAT IS WHAT REAL-TIME MARKET PRICING IS.
How is dealerMaker.com working in "live" dealership environments? Any dealers (areas) around the country having better success than others? Thanks in advance for your feedback, Good Selling! DTG
Price Doesn't Sell online or off. Should you have a price in online listings? Absolutely. You have to give the customer a reason to engage you, price is not that tool. Print ad price wars proves that.

Build your story and USP should be the first goal. How you accomplish it is left to the imagination. Cookie cutter one off solutions are probably not the answer. They may be tools in your bag but at the end of the day you need to give people a reason to want to do business with you. How you do that is where creativity and passion override every thing else. Not duplication and repetition.
Hey Paul,

Relationship selling is the common answer that your reply surfaced. As is often the case with your observations - I AGREE!

Our shared focus and respect for relationship selling is evidenced by our common support for ADM, DrivingSales.Com and AdAgencyOnline.Net where we seek counsel from like minded car dealers and Internet managers to advise us on how we should invest our client's money. I don't recall any posts or forums that started - or in many cases - even mentioned the price! The focus was always on the features and benefits of their application or service.

The same holds true for car shoppers who go to the Internet for enough information to make a decision and both the real and the virtual showroom have proven that price alone does not sell cars! People and personality are a growing factor in the buying experience - especially in online shopping - where customers expect that any price can be matched or beaten with a single click. The key is - who do they like enough to click with!
Thanks for this forum and the great replies.
I have made these same observations repeatedly with the couple dozen clients I've worked with over the past four years. I have seen dealers take down all the prices to get their phones ringing. But even when that strategy does produce more phone calls the prospect that is calling is usually quite upset that they were forced to call for a price. It starts the relationship off on the wrong foot.
The best performing internet departments I've worked with are the ones that create a relationship with the prospect from the very beginning of the sales "funnel" as though they are the "expert consultants" ready and willing to share their great wealth of knowledge to enable the customer to make an informed and worry free decision. The fact is if the customer doesn't trust you they won't buy from you even if you do have the lowest price in town.
But going back to Joseph's comment, what do you think about systems that require the visitor to submit contact info in order to get a price quote? Do you happen to know how that affects lead capture/bounce rates?
I do not know how it affects the rates of conversion, but believe that it may actually alienate a potential buy more than having vehicles listed at MSRP plus addendum.

The real problem is how we measure conversion rate. A lead is the conversion guys behind the keyboard want, a sale is what the person who signs the check want. Until Internet Marketing of cars is looked at as a marketing channel that has the benefit of converting on the spot, lead submission or offer, it will be a never ending battle on what is the real "best practice"..
Well said Paul. Obviously I am a little bias but quite sincerely DealMaker does exactly what you ask. Go to the product demo at http://dealmaker.com and see for yourself.

1. No disclosure of buyers contact info to any dealers until they enter the final payment and delivery phase, and then only to the successful dealer.
2. Dealers don't get leads they get firm offers from DealMaker.
3. Buyers can see every offer from every dealer in the market simultaneously and choose their best deal. (the best deal is NOT always the lowest price)
4. I should also add that because it is a live real-time trading platform dealers don't need to leave any money on the table either.

There's a lot more to it but I don't want to elongate this into a full blown pitch for DealMaker.
Read Capgemini's very thorough survey at http://capgemini.com. The bottom line is that the best 34% of buyers refuse to trade their contact info for a price.
It goes without saying that MSRP must be posted on all inventory cars. However the question on the mind of the customers is "How much will I pay?". Sadly, at the beginning of the sales cycle this is what the customer percieves to be the most important criteria, we know that after the sale, price drops to 3rd most important factor in the decision to buy.
It seems we are all for transparency here, but i will maintain that asking for a name, email and phone number is not too much to ask, provided you intend to actually respond to their question. The longer the contact form, the more questions you ask, the lower your click-thru.
Posting special internet pricing on all new cars is a recipe for low gross. And as has been stated here, price does not sell cars, people sell cars. But in order for customers to be engaged in the process and for people to sell more cars, we need to know who is visiting the website.
I just hate to make unpopular remarks to a group of very nice, but egocentric car salesmen, but someone needs to have the balls to tell the truth.

Does it ever occur to some of our dear friends that some car buyers can actually think for themselves?

Does it ever occur to some of our fellow car guys that some OEM's and ad agencies also play a teeny weeny little roll in rolling cars off your lot?

eBay sells at least one car every minute, and guess what, - not a car salesman in sight. (yes that does ad up to over 500,000 pa)

Many millions of cars are purchased every year without any car salesmen involved. Let's be polite but let's not pander to our egos.

And by the way my first car salesman's licence was issued by DMV in West Los Angeles before most of todays young car sales executives were born, so I do understand.

PS: I am not here to contradict any gestures made by very smart guys who just don't wish to offend, but hey! someone needs to say it like it is. Price does sell cars. You bet it does! (at least on the planet I live on)

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