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The Digital Dealer pt. 2 – The Transparency Fallacy; It’s Not About Price!

‘The difficulty lies not so much in developing new ideas as in escaping from old ones.’
 - John Maynard Keynes

If the goal of automotive retail is to not only embrace eCommerce, but behave like eCommerce then we must first understand that continuing to plug technology into an old and established sales culture will be the slowest road possible to achieving this. By hanging on to a traditional dealership sales culture for dear life, we will continue to force the consumer to operate in the dealers world as opposed to the world they know. One of abundant information and never ending engagement and sharing of ideas and experiences. Our industry can no longer afford to convince itself that their are two different types of customers, the internet savvy and the other kind.

Transparency seems to be the biggest issue. Dealers hear the word “transparency” and the first thing that comes to mind is “invoice” or worse! The fallacy here is that transparency isn’t about price at all, it’s about information. When a well researched consumer enters into your sales process and is being led through the “steps of the sale” they are waiting for the justification of all of the time they spent online researching this purchase. In most cases that information doesn’t meet the surface until the first pencil. That is why it appears to be about price, because that is when the consumer finally has no choice but to either reveal their hand or retreat back to their computer to verify what you have told them.

I am not at all suggesting that we should bring price to the surface early on. I am suggesting that we open the “internet” window much earlier in the sales process. Google says that the average consumer uses eighteen different online sources of information before visiting a dealership, which is more than most people use to research an elective medical procedure. You have a great opportunity to put your customer at ease by acknowledging that they are informed and well prepared to make this very important purchase. If the “Zero Moment of Truth” is second only to the sales experience at your store, why wouldn’t you want them to become more seamless.

Is there any reason that you wouldn’t want to know the answer to any of these questions early on in your sales process?

  •     How much time did you spend online researching the ______?
  •     During your research, what features of the ____ stood out or interested you most?
  •     What web sites did you visit?
  •     Which web site(s) did you find most helpful?  

Since I have never been a fan of the term “qualifying” I will refer to this as the “Digital Needs Assessment”. What you achieve by asking these questions, is that you can reveal buying motivations as well as gaining insight into what the consumer knows and may not know. What is more important is that you are acknowledging that they are well informed and that you are not at all put off by it. It is important to welcome this information with a smile and a positive attitude. Now you can focus on building value and telling your dealers story. Let’s stop working the steps to the sale pretending that we’ll be able to overcome that “internet” hurdle when we get to it. Getting to it early can remove a lot of tension and be a very effective tool, not to mention shave hours off of the process.

One of the worst byproducts of forcing car shoppers to play by the old rules is that dealers continue to lay fertile ground for third parties to develop marketable strategies that help consumers to circumvent those rules. Although these sites can arm the consumer with a wealth of information, it can also place the consumer into a tenuous situation. If the sales person or dealerships primary goal is to work against the customers knowledge by discrediting it or ignoring it, this will cause the consumer to give even more credence to the research and information that they found online. This of course will create doubt in the consumer and the need to “go home” and re-examine their findings.

I have often heard sales people tell their customer “an educated consumer is our best customer” Why not just show them?

***
Here we can more closely examine the “Digital Needs Assessment” questions and open the floor to suggestions and ideas.   

  •  How much time did you spend online researching the _____?
    This can help reveal how long they have been looking as well as a lot about their personality type.
  • During your research, what features of the ______ stood out or interested you most?
    Here you have your hot buttons. You could also follow this by asking if they built a virtual car online.
  • What web sites did you visit?
    This will reveal a lot. If you are a internet savvy sales person you will know exactly what information they were exposed to based on the sites they visited.
  • Which web site(s) did you find most helpful?
    This may help you to understand their research motivation. Was it price, features, reviews, trade value, etc.

Read The Digital Dealer pt.1 – “First Things First”

Views: 493

Tags: automotive, car, dealer, digital., internet, rob fontano, sales, training

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Comment by Tom Gorham on April 8, 2012 at 3:42pm

@John L Mecham  Your analogy is well-taken and on the mark.

@Rob Fontano I love your beginning quote from John Maynard Keynes, "The difficulty lies not so much in developing new ideas as in escaping from old ones."

It may seem that we can't be creative and develop new ideas and methods until the old ones are completely discredited or cataclismically destroyed.  Where shall we begin?

  • Why do we work 12 hours days?  Because we've always done that.
  • Why do we not pay our salespeople salaries (meaningful salaries) but insist that they earn a percent of non-existent gross profit that WE'VE given away?  Why not?  We don't give away the store's money up-front, we give away the salesperson's paycheck first.
  • Why do we not give the customer all information up front? We're afraid to do so because we can't compete.

 

On and on... endlessly. Experimentation and proof are needed in an arena where ROI must be proven in order to do anything.  It feels safer to take shelter in proven methods, even when they're failing.  That is human nature.

Comment by Karla Pincott on April 7, 2012 at 4:59pm

Excellent insights Rob. While you in the US may have a slightly different economic/automotive culture, I think this is going to be an interesting development anywhere around the globe. People are able to access all kinds of information much more readily, increasingly demand the ready supply of information -- and increasingly trust those who are ready to supply it. In a world where buyers can shop anywhere -- meaning there is less incentive for localised repeat custom --  I think they will repeatedly return to where they felt they were best informed.

Comment by Bruce Polkes on April 6, 2012 at 4:21pm

Excellent thread -- you are all right on the money. Marc, I agree that we have to provide the tools and guidance to help dealers sell the value and differentation (as Michael pointed out "We need to sell the product, dealership benefits and ultimately ourselves"); if you're not selling that, you have nothing left to talk about but price. One of the best tools for implementing a transparent, value-building selling approach is the iPad.  It provides a credible, visual platform with CONTENT to support the salesperson (without content it's just a toy). Dealers who are using it appropriately (remember we're not talking just price) find that this transparency builds trust, and that's when customers are comfortable buying. Additionally, when you're building enough value on many fronts, and they see that value, they're willing to pay more. In full disclosure, our product IntellaCar is built on this entire philosophy: Equip the salesperson with the iPad-based tools and training to provide a value-building, transparent relationship that results in a Wow customer experience. Then watch your close rates and gross increase -- but it's only a result of the disciple to do it right. Incidentally, you can easily/consistently do a "digital needs assessment" every time, right on the iPad.

I'm glad so many are stepping up to the plate and addressing a key need that the focus needs to come off of price.

Comment by Marc Bodner on April 6, 2012 at 12:17pm

The industry as a whole has been dominated by selling on price.  Just turn on a TV during local newscasts or sporting events, read a newspaper (although this is shrinking rapidly), or look at the top lead gen sites in the industry.  The consumer has been set-up and conditioned to buy on price!  It's the old school adapted by the leaders of the new school on new communications platforms.  But it's the same material!

After talking with a great many dealers at DD12 I believe that is one of the biggest reasons for the meandering speed of uptake to new devices.  The industry still views price and the ability to sell at a price as a key component in their value statement.  While everyone would like a better bottom-line from the front of the house, the measuring stick is still top line.  Beat last year in volume.  Profitability of that volume is still second.

The key to faster uptake is to make sure the dealers not only have the right tools to communicate today, but have the right value statements to support those tools to effect the change they would like to see.  Yes part of that is discipline, understanding, and commitment on their end, but we as vendors of these tools should have some responsibility to make sure they have the information, guidance, and ability to effectively use those tools to differentiate.

Comment by John L Mecham on April 6, 2012 at 10:32am

Deal.  It is great to find another Zig fan.  Great article Rob.

Comment by Rob Fontano on April 6, 2012 at 10:29am

John, Thank you for the incredible re-telling of one of my favorite Zig teachings. We should get together sometime and "riff" on the Schwinn Bicycle story!

Cary, Thank you for spreading the word!

Comment by John L Mecham on April 6, 2012 at 9:58am

Zig Ziglar tells a great story about how we tend to behave as humans and how we resist any kind of change.  I will paraphrase his "Cutting the end of the ham off, we've always done it this way" story.  A large family got together for Thanksgiving.  There was great grandma, grandma, mom and a young, newly wed daughter.  The young newly wed was in the kitchen with her new hubby preparing the ham for the oven.  The young lady took the ham out of the package and promptly cut both ends of the ham off and tossed the ends in the garbage.  The new hubby was shocked and asked why she threw away that perfectly good ham?  She said,

"We always have done this ever since she could remember".  

Puzzled, the young hubby again asked why, what is the practical reason for doing this?  She said her mother did it and she guessed it was to help the heat dissipate better or something.  He said, let's ask your mom.  They brought mom into the kitchen and asked her why she cut the ends of the ham off before cooking.  Mom said she too had always done it this way and was taught by her mom.  She reckoned it was to help the juices cook better.  Not satisfied, the young hubby suggested they ask mom's mom.  They invited grandma into the kitchen asd asked her the same question.  Grandma said she had always done it this way and was taught by her mom.  She supposed it was to make sure the meat cooked uniformly or something like that.  Finally the young hubby said, let's bring in great grandma and ask her.  Great grandma, walker and all strolled into the kitchen with the help of her young newly wed great granddaughter, was asked why she cut the ends of the ham off before cooking.  Calmly and with a sweet gentle voice, she said, "My roaster was too short".

Yes it is time we recognize that the internet is solidly here to stay and we must embrace it.  Recognizing this fact and adding great questions like Rob suggested will make us all better.  Selling is still an emotional process and the final price is a result of how well the value proposition was delivered, not the way we have always done it.

Comment by caryleabell on April 6, 2012 at 9:58am

Love the article...am sending to all of my dealers that didn't attend DD12!! Thank you.

Comment by Paul Schnell on April 6, 2012 at 9:02am

Great comments on a really great article. Thanks Ralph. I think you'll find there are some stores well ahead of the curve on what we understand to be "transparency".  One Toyota and (shameless, I know) Wilsonville Toyota for example have turned the traditional approach on its head, blurring the line between what information is held close to the vest and what information is shared openly with our customers.  But even here at Wilsonville, we are under a constant struggle to understand at what point, and to what extent, pricing information is shared with customers.  They want it online. You know you need to give it to them online. But as long as transparency in so many of those 18 points of contact is defined as "getting the lowest price", that will always be our kryptonite I guess. Again, great post. And very insightful comments so far.

Comment by Web Benninghoven on April 6, 2012 at 8:04am

Rob,

I've been talking about that for years.  I think we hang on to stuff because it's what we know.  At some point, any of us that have done this a while found success that way.  But is not how people want to do business.  You only have to open your ears to hear that's what they're saying.  

But I deal daily with the conflict between the 60's mentality and methodology so rampant at the retail level and the direction I've been trying to move things for years.  It was really great seeing you this weekend and finally feeling a little vindication for knowing that I've been right in the way I've tried to make it work all these years.  Nice work.

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