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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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On the otherside of the equation, customers will follow the path of least resistance as long as it isn't to their detriment. If I provide a price on the least expensive Camry that fits what criteria that customer gave me, and explain that "It is my job to provide the least expensive vehicle that will meet your needs as I understand them." I am way ahead in the customer's mind of the other guys that are fishing for more info or just saying call me.

You have to at least try to field the question as asked by the customer. If they fee you are pushing them one direction or another, they will push away. If I answer in such a way that a little tweaking will finish the job, they will come towards me.

By the way, least expensive to them doesn't mean lowest grosser to me! :-)
Quote a price and you create a shopper! Its all about relationship building through simple acts of communication. A monkey can sell a car!
Long time since I participated in talks..but I definitely wanted to add to my old post here!

This question has many answers actually. There are so many variables that can make you answer this question either way.. For instance, I am now at Ken Garff Honda of Orem. Honda I have found..at least out here is EXTREMELY COMPETITIVE. We were closing few leads when I arrived..then after investigation ( as I usually do! ) I discovered that we were not Competitive enough in our initial Price Quote that we would not get responses back. After getting Prices from my Competitors..Sneaky, LOL.. we have started to ramp up our Closing Ratio significantly now. We get immediate responses from our initial e-mail, even if we are not the cheapest - just competitive, and I am able to overcome Pricing by using our Back-U-Up Promise as our Closing.. It's a benefits package they get for purchasing from Ken Garff. So I have found that at least with Honda here in Utah, if you are not at least Pricing Competitively...YOUR NOT GETTING RESPONSES.

Now this will vary all over the place. I would say that almost every customer is looking for initial Pricing..but some it's not their hot button. I do not Price my New Cars online and have not had an issue with that..in fact I think I get more e-mail Quotes because of this. But I now Price on initial e-mail almost every time.

So closing this out.. There are some places you can get away with not Pricing..there are some places you cannot..your Market, Competition, Brand, and so many other factors I believe dictate this and you would be wise to follow what works where ever you are.
Well I just read this entire post. I think I would like to ask some of the members here for some of that time back. Anyone arguing that a dealer should list vehicles with a "call for price" should seek employment in another field - although that probably wasn't an option to begin with! But I digress.

What surprises me is the fact that the dealers and employees of dealers seem to be missing an important consideration. Is this healthy for our already failing business model?

Hey most of you are vendors pushing your wares on us and so I understand - you have to drink the cool aid! You collect data and site studies, most of which use bayesian probability to reach conclusion (I'll be surprised if anyone even knows what a bayesian algorithm is without googling it. I'll be even more surprised if any of you know what it is even after you google it!). But dealers are missing the point.

Dealers are operating out of fear more than any time in history. So many of us come from "under-educated-over-achieving backgrounds AND technology has changed so quickly over the past decade AND many of us resisted it (and still do) to the point where now we feel the need to play "catch up" and over react whenever anyone talks about a new way to generate consumer engagement. I think we wrongly assume that ANY consumer engagement is a good thing. And when someone attaches www or web 2.0 or social networking or any great new buzzword or acronym to it, we react by opening our wallets! You vendors are correctly responding to our "fear" of being left behind by creating the next best way to increase volume at the expense of dealer profitability. Nowhere is this more evident than in metro area toyota dealers today.

Our current business model is unsustainable. Should we price? Absolutely! Should we be open to providing more open and easier lines of communication to the consumer? Absolutely! Someone mentioned the housing market... It's true they all have prices. But what you left out is the fact that someone is getting 5%-7% commission on each of those transactions and I'm willing to bet the people that built the house and the vendors that supplied them all got paid as well. -PROFITABILITY- Consumer sites like TrueCar.com would actually have the consumer believe that they OVERPAID for their car if the dealer makes ANY profit. Nationally the gross on a new toyota camry is $200-$300 on a vehicle that costs $20k-$30k. Think about dealmaker for a minute. It provides real time purchase data and can adjust your pricing (that means cut your profit in real time) to your competitor. So if everyone uses dealmaker and it auto adjusts everyone's pricing to be more competitive then the next guy, you've created a wonderful loop to adjust your pricing right to $0 (Yes, I know how ridiculously simplified that argument is and there are other factors). The problem isn't our willingness to negotiate. The problem is the margin and how much of it we are willing to cut.

DEALERS BEWARE - Vendors are not your friend. Vendors, on average, are far more profitable than the dealers they cater to. Stan makes a great point. There is no steeple on our rooftops.

DEALERS BEWARE - The manufacturer is not your friend either! This economy is making them think about something real hard. Do we even need dealers to sell to consumers? Revolution is coming. The decisions we make as dealers over the next 4 years will determine the future of this business for (hopefully) years to come.

The point of this tirade is that hopefully a few of you will stop and think for a moment. Before we blow another $12k/year on another product designed to cut dealer profitability, maybe we should think about what it means to continue on the path we are on.

The good news! Many of you WON'T be here! The dealer body is going to be hugely reduced over the next 24 months and those that survive will, hopefully, have the foresight to be part of the revolution that brings dealer profitability back to the table.

You vendors may now ensue with the onslaught of insults and personal attacks and demand my credentials and name drop away! But if one dealer out there gets the message and survives as a result, I'll feel good about it. In 2 or 3 years we can look back at this post and I won't even have to say, "I TOLD YOU SO!"
We had a Toyota Dealer (yes a Toyota dealer in a major metro market) grossing $3773 in front and back average gross. Maybe you should ask them what they think of the online negotiation system we are providing them. The raw numbers are are always the best indicator of positive results. You can call the dealer directly and ask them how bayesian they think those results are. Take it easy on us vendors. The dealers that actually commit to the use our products come out way on top usually. Not always but usually.
I will try to make this to the point. Give the customer what they ask for. If they want a price give it to them.If they ask for info then give it to them. Get the answer to them fast! In the end we need to get them in and sell them.
Jock didn't mention that Widestorm is sold with no contract, so if the ROI doesn't prove positive then the dealer is free to move on.
I would love to sell in Jock's "major metro market." To have a gross of almost $4000 per unit I can make a nice living selling the $2000 deals they let walk.
Sometimes the vendor is like a QB, they get all the praise when things work out and all the blame when they don't.
If it is the dealer i think it is, after several autoresponders I have heard nothing. If you're not shopping your competition you're either lying or lazy.
What are you saying Stan? Fire the salespeople and use technology?
Roy,
No the Salesman is very important. I think dealers are forgetting about the face of their company. We need the tecnology to get them in and the salesman to use his skills to close them. We all know the closing percentage goes way up when you get an internet customer in the store. We also know a very small percentage actually will buy the car you gave them the price on in the first place that is where the skill of the sales pro is important.
Oops, I was referring to the other Stan's comment about 'giveaway artists', sorry. I agree with you, use technology to get the prospect in front of the salesperson.

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