Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!
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

Views: 1123

Reply to This

Replies to This ADM Discussion

Blogging is great. Internet is great. In the end you still need a skilled sales person. The face of the manufacturer the face of the Auto Group the face of the local store. It really sounds like a big responsibility yet the sales person gets the least amount of training and respect from the dealership staff and most manufacturers. You get what you pay for! Well I can become a vendor and sell these people because in the end the managers of the dealerships are the best of the under trained salespeople who have been promoted and thrown to the wolves all over again. So back to the subject of the thread. The Baby boomers that are running things need to figure out how to sell generation X... Here is a hint, if they ask for a price give it to them and quick.
Hey Philip,

Posting a price online is great. It should never be the rock bottom price cause the customer isn't going to really pay attention to it. Customers have always looked the posted price as the list price, or the suckers price. They always want better, even if it’s something small, they always want something better. I tried this on myself, when I was looking for my BMW I called a couple of friends and asked them what they can get me one for? I saw one in Long Island NY and just walked over to take a look at it, and the sales person said I will give you a great deal on that one, without even showing me it or even telling me the year!

I was actually saddened by this. The conversation, or lack their of was about price. I proceeded to walk away after he seemed to have qualified my by asking me, are you buying a car today? I told him I don't know, he said here is my card, call me when you’re ready, and oh by the way you can have this car for this much. I started laughing, and walked away.

I received several calls that day from friends giving me higher prices than the rock star salesman from Long Island, so out of curiosity I looked at the dealers website to see some photos of the vehicle and the price online was the same as he gave me. I right away didn't think the price was as good cause it was listed? I tried very hard to get around that but still thought I can do better, even after I priced that vehicle around. I did buy a new BMW from a friend at a great deal. I did this cause I knew I was going to be taken care of when I needed them, and they have proven it to me time and time again.

The point is not to list the best price online, cause it doesn't put you in contact with that customer. That customer needs to know that you’re going to service them, and treat them well. That is not a story you’re going to tell them by listing the best rock bottom price.

Clarence Romero
Thanks Clarence,

Of course I agree and if you read back a few pages you will see that most of the ADM community does as well. The phrase that pays is "transparency" and it is built on the same selling secrets that I used in 1976 when I started selling cars - relationship selling. People like to do business with people that they like!

The best price is the one that the customer pays and the sooner you give them what they want the sooner they will tell you what that is!
Phil, as always you hit on a major selling issue with online pricing and shopping. Personally, being "honest" in today's society just doesn't get it done. Consumers are skeptical (as they should be with the bad press we receive) online or in the showroom due to the reputation sustained over years and years of unethical practices. As Joe stated in his comment, these customers are ghosts until engaged properly. I have always believed you must have a plan before entering any battle and I train people to "think out of the box" when it comes to interaction online or in person. It's all about the "RELATIONSHIP."

I have never quoted a price online or on the lot. There are alternative choices you have to make your proposal unique and to make sense to the "ghost" online. These questions of "how" to approach this subject can be perfectly remedied in a proper sales meeting. Just "how" to overcome this pricing issue is pretty simple and it takes a plan to deal with it.

First and foremost, you have to offer a valid reason for the party to stay engaged. Not engaged in price, but engaged in a story line. Does the salesperson on the keyboard have "proof" that their higher price is justified? Does this salesperson have the prepared information "why" this ghost prospect should consider the "value" and "validity" in the proposal? With anything else we purchase, price is justified with the value received. For me, it doesn't matter if the person is online or in front of me, I have the business plan prepared before I do battle. If you fail to plan, you plan to fail.

Place yourself in the customer's shoes? Empathy! They are shopping online because they despise the process of going to a showroom. The less time spent in a showroom the better as far as they're concerned. So why not remain a "ghost" and shop online until you get most of the buying process out of the way. You have to give the ghost "reasons" to stay engaged. You can keep a customer engaged with fear or other viable reasons for them to do business with you. One thing is for certain, there are many dealerships out there that have no plan for this topic. They shoot from the hip each day and wonder "why" they lost the business. It's like anything else in this business. The strong always have their guns loaded and know where to aim.

The question is: Has the salesperson given the customer the "proof" they need to come to the showroom and pay a higher price? Answer: Put the customer's shoes on your feet and give them the valid reasons "why" they should do business with you.

Question: Has the salesperson provided a satisfied customers email or phone number to validate the statements made to the online "ghost?" That's a place to start. This is a great topic for all those dealing with online pricing questions. My advice is to have a meeting with all these issues and deal with them from a customer's perspective.
The goal is shifted.

Now realizing that if you continue to press for the appointment without giving a price you risk a hang-up or customer never answers your emails, you refocus the goal of the outcome to engage the customer to get the information they need online via online negotiation.

"Sir, I understand that you don't want to waste your valuable time before you have at least the basic idea of how affordable this vehicle is going to be. So what we do here at ABC Dealership is provide you with not only a very competitive price, but also payment options, numbers on your trade even research your financing options ALL ONLINE, are you in front of your computer right now sir? Great, let's pull up that stock number you were looking for and I will help you get started in retrieving your pricing information...we just need your email address to get it put into the online system..."

You can see how now instead of fighting for the appointment or having to just throw out a low ball price to hopefully have a chance, you now are getting the customer information while giving them more information than they even originally asked for. Now you're on the road to building some trust and rapport, and eventually that appointment!
See Full Article Here
Hi Jock,

I respect your suggestion to provide additional transparency in the "negotiation process" by offering more information than the customer initially asks for. Your script is excellent, your information is relevant, it is in the customer's best interests and if they allow you to control the conversation they will be better off than if you simply answered the only question that they thought mattered - HOW MUCH?

Therein lies my real world observation that might qualify the value of your presentation - although, again - I LIKE IT! The problem is that in most cases the customer is not listening to you - unless you first answer his question about the price - and in many cases he will assume - incorrectly or not - that you are a fast talking car salesman trying to avoid his simple question - HOW MUCH!!

I respectfully suggest that the simple tweak of "giving before you get" may open his mind and ears to hear what you are saying - which is definitely in his best interest - but he has to trust you before he will believe you!

Try adding this to the introduction to your slightly editted script:

"Sure, I would be happy to give you our Internet price - do you have a pen and paper handy to write it down? Great, Please write down my name, number and email address so I can honor the price when you come in. (Give him your name, number and email address) Great, the Internet price on that car is $???????. And so I can save that price for you, who am I speaking with? (Get his name, number and email address)

Great, here at ABC Dealership we provide you with not only a very competitive price, but also payment options, numbers on your trade even research your financing options ALL ONLINE, are you in front of your computer right now sir? Great, let's pull up that stock number you were looking for and I will help you get started in retrieving your pricing information and I willput your information into our online system."

Of course no script will survive in the real world but the concept should! It also should be noted that the price is also subject to the inevitable customer offer or claim that it is cheaper elsewhere but that's where the relationship that you earned by answering his question before he answered yours will come in.

For example, " I understand that you want a better price and I would be happy to present any reasonable offer. Our Internet price is designed to be competitive but in this market prices are changing constantly and I am sure that we want to earn your business! Besides, our service department is the best there is and that is priceless. For that matter, even if we lose the sale we can't afford to lose you as a customer so if we can't make you happy on the price we will keep you happy with our service - no matter where you buy the car. " - Or something like that!!!
In the last month with the Cash for Clunkers Program in full effect..the Dealership changed my competitive pricing and shot me in the foot. While they were selling cars for STICKER downstairs, I could not sell a car upstairs. In our Area, every Honda Dealer Price quotes on the very first e-mail...making it quite tough not too. I played around with Pricing, Not Pricing, for a while and sold the most when we priced and still pulled in a good amount of Profit for the Department due to our Pre-owned. I went from 36 cars sold to 12 cars sold this month when they pigeon holed me. Slight difference. I had to try and come up with multiple ways not to price and everyone was shot, due to the Dealers out here Pricing. If I did get a response it was a Phone call and the first question out of their mouth was " What is the best Price? " So depending on your market, depending on your Competition..I think those are your two distinguishing factors.
The pricing dilemma can be solved by only one solution. Only one method recognizes that no two situations can ever be exactly the same. AUTODYNAMIC PRICING. Matching supply and demand, moment by moment.
What is that, AUTODYNAMIC PRICING? Have not seen this before...but I can tell ya that depending on the marketplace, that if your not inline with your Competition and you go one way, while all the rest go the does not bode well for ya! Living proof this month. Obviously everyone would love not to price, I would love not to price, but as this month shows is totally killing my department. I truly believe it's about your marketplace..Our Customers call in or e-mail into the Dealership for Pricing ( in our Case ) about 90% of the time. Almost every call I take, the first question out of their mouth is what is the best price, in the comments in e-mails, same scenario. Having a Management Team that ignores this creates a huge dilemma and horrible results. It took me a little while to convince them to be competitive. once we became that way, we went from selling the 8 cars a month that the previous Manager was doing to the 36 I did last month. So why backtrack? I don't believe you have to be the best priced, but you have to be competitive! ARRRGGG, just banging my head against a cement wall!
Autodynamic pricing controls pricing electronically. Optimized by computers that continuously balance supply and demand using the input from many buyers and sellers who are all trying to make deals online.

You can compare it with electronic valve or ignition timing on most new cars. Imagine if you tried to optimise your cars ignition timing manually with a big old lever on the center of the steering wheel, as your grandfather might have done a 100 years ago on his old Model A Ford. It wasn't very efficient was it.

An every day example of autodynamic pricing is the stock market. Buyers and sellers are continuously posting bids and offers into a central matching engine until they find the perfect match and deals are done. Of course car deals are much more complicated, but there is now technology available that knows how to handle all the loose ends, so optimising car prices can be as simple as pricing stock in the stock market.

Just as we wouldn't try to compete with our cars CPU to optimise engine timing, within a few years we won't be trying to outwit the market to find us the best price either.
Hi Brian,

The question of "To Price Or Not To Price" has been answered enough to have developed a sufficient sampling to draw a conclusion - so I will presume to draw one since I authored the post.

YES - Internet shoppers have confirmed that they go online to select a dealer as much as they are selecting a vehicle and part of their criteria is to determine how "transparent" - (substitute honest) - the dealer is in providing them the information that they need to make a buying decision with most customers confirming that the price is required to narrow down their search and to start a dialogue.

We have also collectively determined that the "best price" is the one that the customer is willing to pay. Negotiations from a "competitive" posted price is sufficient to earn the customer's business since most people will pay a little extra to do business with someone that they like, but they need a starting point that is credible before they will trust you enough to enter negotiations!

Now comes the lastest wrinkle to this confirmed process of posting a competitive price coupled with a transparent relationship based negotiation. With the recent consolidation in the auto industry most dealers can't support the staff or offer competitive compensation plans given the reduced profit margins that our shrinking economy has forced on consumers who need to get the best possible deal. Note that I didn't say "want the best deal" - I said NEED the best deal.

As a result, a new dynamic has to be considered from the auto dealer's perspective if he wants to maintain his market share if not his volume or profit per unit when he no longer can support a professional sales staff able to overcome customer's objections.

The solution lies in the technology and applications - like http://DealMaker.Com - that provide efficiencies in the "negotiation" process which allow the fair market price to surface as quickly and painlessly as possible for the consumer. The transparency and relationship provided by today's professional salesperson must be replaced with a process that can exist without a salesperson in the formative stages -- although I do beleive that we will always need a "person" and a relationship as the final differentiator to stay competitive. The trick is to allow fewer sales people to process more customers and transactions. The salesperson is still a critical part of the final process - he/she will simply need some tools to help him/her narrow down the selection and negotiation process to sell more vehicles for less profit to make a living and/or support a dealership faced with reduced margins and increasing expenses.

Of course there are many new conversion tools and online transaction applications being developed to integrate online selling processes with brick and mortar selling systems but the specific focus on selecting the appropriate price posed in this forum is limited to a select few. DealMaker.Com, for example, relies on a "many to many" open "buy/sell" process to let buyers and sellers establish the price based on a free market price for new vehicles. FirstLook provides an inventory management application tied to an online marketing platform for pre-owned vehicles that starts with their appraisal process that relies on both historical and current Internet prices on comparable units as well as established wholesale book and loan values to determine a "competitive" price. This is coupled with their proprietary "Consumer Optimization" logarythms that compose the online postings copy to maximize conversion rates to attract online customers by providing the transparency that was previously offered by the salesperson in this formative stage.

The solution for pricing a vehicle lies in the technology that allows an auto dealer to determine a competitive price coupled with his ability to personalize the experience in a scalable manner that can be communicated in a cost effective method. People will always be a part of the process but reduced sales volume and profits suggest that fewer people will be able to be supported by it. The trick is to be one of the newly defined "professional sales people" that understand the technology and processes that will drive tomorrow's auto industry.
Folks you should read this latest post by Philip. He does have a way of explaining things that is hard to beat. He makes a very good point about applying technology to do the leg-work.

Even as computerized as technologies such as DealMaker are, it is important to bear in mind that it is not computers making the price, it is people. Dealers and buyers post a continuous stream of bids and offers into these systems. The technology is simply the matching engine that harnesses the power of so many people. It ties all the right bids and offers together. Filtering and qualifying deals if you like. No single person could ever match the speed of such a system.

I envision the professionals that Phil refers to as becoming equivalent to the professional traders in the stock market. They are the highest paid sales force in the world. The technology they use enables them to make a vast number of deals in a very short time. The technology does all the leg-work. Professional automobile traders can do the same thing. All they need to do in to open their minds to the opportunity. Its not nearly as alien as at first it might appear.


Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

William B. Terry
Rated by Super Lawyers

loading ...

Please Consider Automotive Marketing Professional Community Sponsors

ADM Badge


Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......


Top Automotive Marketing Forum Discussions

Share the Best Content w/AutoMarketing Community

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service