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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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What has worked well for me in the past is grab the phone as soon as a lead comes in and try to make that personal connection by building rapport and fact finding. Before I knew it, I had rapport with the customer, they felt comfortable with me, and I was able to get them in easily. When I did send out a price, I would send several vehicles, including similar ones from the competition, or I would "range" them. For example, if I got a generic "Camry" inquiry, I would price out a CE with few options, an XLE, and then maybe an SE V6 loaded out so there would be some price disparity.

A follow up email or phone call would be asking if they got the quote and if so, which did they prefer. All correspondence is supposed to do is elicit a response to keep the conversation going. If you don't give them pricing information when they want it, they will have the discussion with someone else, because you know there is another dealer out there dropping his drawers to get them in.
Gerald's approach is very good because he is not evading the question but he is keeping the customer engaged through the most fragile first stage.
I believe that Gerald's approach is probably one of the better ones. I used this when I worked at Ford Country in Las Vegas.. and I would have to say this tended to work rather well. I would always send three, when I was there. The first was usually with the equipment most closely matching the Customers request, the second was a little less equipment with a better Price ( obviously ), Followed by a CPO if I had one available.. or a Pre-owned with a very intriguing price. I would say that we had a very high return rate on these compared to the single price or no price e-mails. I would not always send price though. I believe strongly in reading into each e-mail and seeing what the Customers hot button is.. I had a couple of different first e-mails I could use. One that was vehicle specific, without price. Then the one with several choices. Let's face it, now a days it is very difficult to send no price to all of our Customers. I believe a healthy mix of both, tailored to the Customers hot buttons gets the best overall result.

For me anyway, it seemed that we converted more with this approach and all of the ISM's would follow the same pattern. Read the e-mail, understand the real priority and meet it. There's my two cents!
I have used various combinations of both Gerald and David's approaches, and have sold a lot of cars with both strategies... The key is to quickly apply the response that is best suited to the nature of the inquiry. We all know that not every customer responds to the exact same information in the same way, so using a "triage" approach to lead management where your response is designed to quickly address what the customer wants, while streamlining a fast response to that customer makes a lot of sense.

For example, I once took a turn from a frustrated Internet Sale Specialist to handle a new Corvette lead where the buyer claimed to be located out of state and would be comparing our quotes with those of a nationally reknowned volume Corvette discounter (Kerbeck). My response was to scrape the invoice scans from my DMS for every Corvette in stock, email them to the buyer as file attachments, and then sent another email with photos and an offer to deliver his choice of Corvette by "Horseless Carriage" transport to the National Corvette Museum in Bowling Green, KY along with his museum admission, one night's hotel stay and a professional photographer that would take his picture with his new Corvette in front of the museum. Turns out the guy was an airline pilot, and he actually lived not to far away in in Tucson... He came to Phoenix the next weekend and bought a new Corvette from us... Not because we were cheapest, but because we had made the most significant impression on him with our emails, photos, invoice PDF's, enthusiast-focused offers of special treatment and phone calls. The success came from tailoring a unique response that hit the buyer's emotional chords and helped us establish a relationship.

On another occasion, when new Z06 Corvettes were IMPOSSIBLE to get, I handled a heat case from a buyer who was angry that we would not take a deposit on a new Z06, nor commit to selling him one... At any price. The customer was really mad because Courtesy Chevrolet had a policy of NEVER charging more than MSRP for a new Chevrolet, and he wanted a new Z06 at MSRP. After I spoke to him on the phone, I told him that I would make him an offer in writing by email after i made sure the owner of the dealership would be OK with me putting it in writing on a contract... What I sent him later that day was an offer stating that if he would buy any one of our new 2006 Corvettes in stock for full MSRP, that I would give him first right of refusal for our first 2007 Corvette Z06 production allocation, to be ordered exactly the way he wanted it. The right to buy would be stated in writing in his purchase contract for the plain-jane 2006 Corvette... However, he could not trade in or return the regular 2006 Corvette. Nobody would take a deal like that... right?

Well, this guy took me up my offer, bought a new regular Corvette from us for full MSRP, then waited almost a year to get his 2007 Corvette Z06... Ended up giving his regular 2006 'Vette to his father as a gift when the Z06 arrived. He also gave us perfect CSI scores and to this day occasionally buys a drink for Dave Blankinship... BTW, anybody who doubts any of these lead management to sale examples need only call David Blankinship at Courtesy Chevrolet, because he was my salesman who I gave all 3 deals to. Lots of gross, happy customers and selling cars... This is what happens when you really focus on how you are responding to each lead based on all the details available to you.
I strongly feel that if you simply take one approach and stick to it..without customizing to each individual Customer, then you are missing a ton of opportunities. Being that I have been in stores that do both approaches I have seen the results of both. The numbers overwhelmingly show that if you just price all of them.. you are missing the boat big time. There may be the exception to this rule somewhere. There are always stores that can pull it off. But after what I have witnessed in closing ratios, it is night and day and I would never go back to just doing one thing every single time.

It just doesn't make sense based on what I have seen.
Hey David,

Glad to see that you are taking the bull by the horns at your new home! "Transparency" in online communications is the key to online transactions and it is not limited to price - it only starts there because most customers don't know where else to begin!

The key to sales in either the virtual world or the real one is the same - build a relationship on earned trust by satisfying the customers needs as well as his/her wants. We all recognize the basic logic that "we don't know what we don't know" so if all we do is answer direct questions from a customer without expanding their "knowledge" by providing additional information that they may not have known was important, then we are following - not leading - and most customers need help in moving forward to a decision.

Starting with a variety of vehicles that may fit a customers needs based on the information that they provide and then supplementing that information - beyond price - is the best way to differentiate you and your dealership from the rest. The price and the product DOES exist elsewhere but you are only available at one site, so sell your knowledge and concern by customizing your replies to fit your customers needs as well as their wants and you will justify the price.
I couldn't agree more.. the first e-mail if it was to be a PRICE QUOTE had options always. Usually one that fit their needs, one a bit less equipped, then followed by a Pre-owned with a nice looking Price point. But as I said before, this was not always my first e-mail. One thing that I think is vital in the handling of an eLead is actually answering the pertinent questions of the Customer. Such as they ask if we have a specific vehicle and don't mention Price.. I answer the e-mail attacking the question first. I believe that the primary complaints of most Internet Customers is that they don't get their questions answered and time frame.

I think it's funny when I do my homework and shop other stores, what kind of responses I get back. I look from a Consumer perspective and usually always ask a couple of questions. I still see a large amount of Auto responders, followed by an e-mail that doesn't address any of my concerns, and I can see where frustration would come from. It's funny how you can go no where near price, if you just answer their questions, and give them a reason to visit your brick and mortar location.

I actually, this last time I Mystery Shopped, found many Dealers in our Market that simply sent an auto responder and that was it. That blew me away. One had a pretty direct end line, that I don't know if I particularly would use, because it put me off when I saw it. Tell me what you think, I think it is a little stand offish, but maybe I am sensitive...

" If we don't hear from you shortly, I'll just make some educated assumptions about your inquiry. You will still receive contact from us shortly to help you through your car buying process. "

This is a direct cut and paste from that e-mail.. tell me what you all think!
My dealer has determined to put NEW car pricing online, advertising our price. I have always subscribed to having pre-owned pricing online, but I have NEVER had our Internet price for a new vehicle. The prices generally are fairly aggressive, but I feel it is too easy to take my price to a competitor and have them beat it by $100-200. In other words, there is no real reason for a customer to contact us to see if this is our best price. Interestingly, that DOES happen with pre-owned pricing, but not on new cars, at least not that I have seen yet. My success in the past has been on responding to an inquiry with several quotes to try to engage the customer. I am pretty sure this has a little to do with our anemic website performance (the economy has had an impact as well). What do you think?
Hi Gerald,

I feel your pain in change but rest assured that the same "transparency" that invited your online Used Car customers to engage you to "tweak" your online price will work to start the conversation for your New Car Customers as welll. The day for actual online real time negotiations and transactions is nearing where the price will be "tweaked" real time via two way video chat applications and pushed video and forms to evaluate the trade, take a credit app and agree on a bottom line out the door deal - such as is now being offered by AutoTransaXion - so you might as well establish that open relationship with your local and loyal customers now.

You still need to offer two or three alternate vehicles - new and used - and a variety of payment options but the dialogue needs to start somewhere and for now - price is a good introduction. The key is to set a competitive price by shopping your competition the same way that your customers do. Automotive advertising vendors like ecarlist, AAX and vAuto automate your inventory and management processes to help you market competitively and you may want to check them all out by going to http://adagencyonline.net or www.blogtalkradio.com/adagencyonline and listen to the developers of these and others that can help you efficiently price your product and maximize the conversion rate to your site. No worries - Price is your friend as long as you offer more than that to earn your customers business.
Stan, you are obviously one of the smarter voices on this network. Why don't more dealers consider dynamic pricing? Your comments about the folly of advertising fixed prices on the Internet (or anywhere else) are absolutely true. In all my years in the industry I never wavered from one golden rule. NEVER MAKE THE FIRST MOVE ON PRICE. There is only one way to get a buyer of anything to make the first move. Dynamic pricing. In other words, "make me an offer".

The Internet is eminently suitable for dynamic pricing. Its nothing new of course. Trillions of dollars worth of other commodities (including used cars) are traded by this method every day. Transparent without the trap.
Hey Stan,

Remind me to continue this discussion with you at NADA! DealMaker.Com is about to hit the market in the US in 2009 with some planned strategic partnerships and the price issue is still a critical element in their process. See you at the Ritz Saturday at the lobby lounge at 5:30 - the first drink is on me!
I would invite you to check out our approach as we advise dealers. It is called on-line negotiation where you not only give the prospect price, but payment options, trade estimates, set up financing and allow the dealer and the consumer to negotiate in good faith over the Internet. By doing this, it is also much harder for the consumer to shop price because you are giving them the whole deal structure, which most dealers are not equipped to handle online. We've just piloted this with Ron Tonkin Honda (www.tonkinhonda.com) and the preliminary results we are seeing are incredible and the consumers are loving the experience. The consumer is already there, now it's a matter of time before dealers will realize that they have to meet their customers where they want to deal - online. www.widestorm.com
We will post the actual numbers at the end of the month for everyone to look at. Cheers.
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