Community

Share your automotive expertise

2 Write a Blog Post

Does not being transparent make you invisible to customers?

By Ron Henson on Mar 11, 2013

BUZZWORD ALERT!

TRANSPARENCY.  Love it or hate it, it is relevant and plays a big part in your Digital strategy.

Let's see if we can look at things from a customer's perspective for a moment.  

  1. Google the product you're looking for.
  2. Read through the results on pages 1-5 to narrow your search. (Yeah, right!)  More like, Read through the first 3, maybe 4 results.
  3. Visit a couple of the sites to gather information including pricing and availability.
  4. Visit 3rd party sites. (Autotrader & Cars.com)
  5. ASSUME THAT NO PRICE = HIGHEST PRICE AND MOVE ON TO NEXT DEALERSHIP.

So is #5 happening?  You better believe it is!  If you aren't pricing your inventory and pricing it "On the Money" you are out of the Internet game.  Remember, we're looking at things from a customer's perspective.  So here's the rub, some dealers dig their heels in the sand and say, "Listing prices online just costs me gross and those mooches who insist on knowing he price before they come in can go see the guys down the street."  

The work I do with dealers affords me the opportunity to review many Internet mystery shops of dealerships all over North America.  It blows me away how many times we ask for a price and get an answer like:

  1. We'll make you a great deal. When can you come in?
  2. We've never lost a deal over price.  Come on down.
  3. What monthly payment were you hoping to get?
  4. Do you have a trade?

Let me address #4 specifically.  Now remember, customer perspective.  "Hey honey, did you know the price we can get on the new Tahoe we want is affected by whether or not we have a trade-in?"  "Hmm, I'll never understand the car business so I guess we better go down to the dealership that won't give us the price online because I'm sure they will be much lower than these other 2 dealerships that have been so nice and answered our questions so thoroughly."  

NOT!

The moral of the story here is that as the business owner you certainly have the right to make the business decision to resist transparency and not post prices on your website or with 3rd party vendors.  Whether or not that is a good decision rests with you and your management team but I would like to offer a suggestion.  Look at it from a customer's perspective when making that decision.  Think about the last time you shopped online for a high ticket item like a tv or a riding mower or whatever it may have been.  Chances are you were looking online for 3 pieces of information:

  1. Product info
  2. Pricing info
  3. Businesses that offered the product

Did you consider going to businesses that didn't offer one or both of the fist two items?

The Dalai Lama said, "The lack of transparency results in distrust and a deep sense of insecurity."

Go move some metal!

 

Comments

A good deal is a state of mind. It's based on perception. There is no real transparency. Its also perception. And the perception is transparency is much more important that transparency itself. Does anyone really think we are going to divulge our complete cost structure to each consumer, then negotiate the margin?

We'll have true transparency about the time Dealers are transparent with their managers and sales people, and not a moment sooner.

Mar 11, 2013

The word transparency is often over used, but that is because consumers have more influence and data to support their influence than in any time in auto industry history. The problem is not all data is equal, and using it in context can also be a problem. Research indicates the Gen Y buyer who will soon comprise over 40% of your consumers wants this type of validated experience. With-out this type of showroom experience they, Gen Y, purchases from a dealership willing to be "transparent" There usually is a difference between new and pre-owned gross profit, but both experiences have to be validated in a transparent way. The good news for progressive dealerships is you can become transparent in a lot of different ways and use data that works for your dealership and your consumer. I wouls strongly recommend beginning to look to address Gen Y the are different buyers and the data supports that fact.

Mar 11, 2013

David, I couldn't agree more than transparency has to happen between dealers, managers and sales consultants as well. Truth is, dealerships that aren't are not only losing customers to competitors, but employees as well.

Mar 11, 2013

Great comments Stuart! I believe that it's not about being the lowest price, but being in the most aggressive sample set and then letting your light shine through a process that builds value and trained & certified sales consultants. Thanks for your thoughts!

Mar 11, 2013

Carmax proves over and over that price is not the issue. You don't have to be the cheapest to have customers buy from you, but you do have to have a good online shopping experience. Getting instant gratification on a trade appraisal on your dealer website is very important and I would challenge you to do the research on which values are most realistic and relevant. Start a fresh or rare car a little higher price than a car that is aging and you'll make up the difference in gross.

Mar 11, 2013

Well said Carl.

Mar 11, 2013

As one of the generation in question, as mentioned above... this could not ring truer to me. Having been burned once (hard) by a very "non-transparent" dealership, I made it a point to never allow it to happen again. My weapon of choice? The internet. Since that first burn, I have made 2 more vehicle purchases. In both instances, I walked into the dealership with a wealth of information on hand, and spoke frequently to the dealerships I shopped with prior to coming in. And while both were adamant about not talking price before I actually walked in the door, I was ready anyways. Thanks in large part to sites like edmunds (which I used both times), I felt I had a decent idea what the cost of the car should be, and thanks to my smartphone, I had no problem forcing the salesmen and dealerships I visited be as transparent as possible with me. At the end of the day? Customers understand that the salesmen and the dealership need to eat too. It's about respect, tact, and honesty. These are the values we of ANY generation hold over slime, smarm, and snark.

Mar 11, 2013

Brilliantly put Marc! Thanks for weighing in.

Mar 11, 2013

This is a major part of what I am trying to solve with CarWoo!. You're on the money here Ron. Dealers that embrace what you've written are definitely more successful with the online buyer. Thanks for the post.

Mar 11, 2013

Thanks Tommy! Guys like you and I are trying to change the world one dealer at a time. :-)

Mar 11, 2013

Comments 1 - 10 of 46

You must be logged in to comment

Login Create an account

Add your comments:

   

Ron Henson's Recent Posts

Related Posts

  • Phone Interview Questions: 6 Tips for Running the Show at Your Dealership

    Want to hear something crazy? 103 years ago the Titanic sank. Want to hear something even crazier and completely irrelevant to the first question? Most people do not know how to conduct a proper interview, yet alone a phone interview. Meeting someone face-to-face allows for natural interaction and initial conversation. On the other hand, meeting someone over the phone calls for a bit of effort from the caller (in this case, the hiring manager) to get the conversation going. Therefore, it’s essential to have a guideline or some format to follow when writing up phone interview questions; otherwise the interview is bound to fall apart and lose its purpose. 6 Tips for Phone Interview Questions 1.) MAKE A SCRIPT—Following the same script for every interview helps avoid bias and inconsistency. You want to make sure every candidate has the same opportunity to a fair interview process; this means asking everyone the same basic questions. Plus, this helps you stay on track and keep the interview flowing within your respective time limit. 2.) INTRODUCTION—This means more than just a simple, “Hey, how’s it going?” Introduce yourself, your background and your company first. Then give your candidates an overview of how the interview will flow so they know what to expect. Make sure they understand your interview process. This will help ensure a smooth transition to the next stage of the process, like a face-to-face interview or polite rejection. 3.) CAREER PLAN—Ask the candidates aRead post

  • Your Director of Marketing Has Gone Rogue

    The Director of Marketing going rogue can be a blessing or a curse. Here's how to identify which it is for your dealership.Read post

  • DrivingSales is Heading Across the Border to Canada

    We are very excited to announce our first international conference in Canada. DrivingSales is will host the Canadian Dealer Forum in Calgary, Alberta on June 22 – 23, 2015. For the last two years, the Canadian Breakout Session at DrivingSales Executive Summit has sold out. We have heard from many dealers that they would like to see a conference in Canada. You spoke and we listened.Read post

  • Why did Apple adopt 360º views for their new Watch?

    Finally, the long-awaited Apple Watch is available for preorder with initial deliveries on April 24th. Interestingly, for the first time, Apple has chosen to display their new products with stunning 360º displays.    Check it out: https: https://www.apple.com/watch/apple-watch/stainless-steel-case-white-sport-band/   As most of you all know, Apple is the most valuable company in the world and the first $700BN company in history, with a market cap almost double that of the 2nd largest, ExxonMobil. Yet, they don’t have a monopoly or any other unfair market advantage. In fact, Apple was founded just 39 years ago by a college dropout.  So, how have they risen to such unbelievable heights?    In Walter Isaacson's biography of Steve Jobs, Isaacson said of Jobs:    He talked about Edwin Land, the founder of Polaroid, “Edwin Land once told me that those people who can stand at the intersection of the humanities and science, the liberal arts and technology, that inters...Read post

  • Amazon Enters the Auto Repair Business… Sort Of

    At the end of March, Amazon announced the launch of what they’re calling “Amazon Home Services.” This new service by Amazon enables customers to order services for their homes without the inconvenience of having to search for these service providers, obtain references and obtain pricing. Services range from television installation, painting contractors, electrical work and… you guessed it… auto mechanics. No, Amazon isn’t hiring a workforce of skilled employees waiting to come to your house. In essence, Amazon is simply the middleman in this new arena, facilitating transactions between participants in the program and the consumer. These services all have up-front pricing so the consumer knows exactly what the costs are. In addition, each service provider is reviewed by a previous customer.   I’ve written a lot about how convenience and transparency are important to today’s consumers. This has become increasingly evident in the proliferation and success of automobil...Read post

  • Three Ways Mobile Tablets Increase Transparency In Your Dealership

    Anyone who runs a business knows that transparency is considered to be a good thing. Transparency is an important part of a company's efforts to improve productivity, boost employee morale and earn customer trust. Yet, to be transparent is apparently easier said than done.   It's a sad fact that auto dealerships are--still, today--repeatedly listed in the Better Business Bureau's Top Ten industries with the most customer complaints. Even if you're an auto dealer who works hard to create one of the most transparent, honest dealerships in town, fighting public perception can be like swimming upstream.   The fact is, people tend to believe what they read more than what they hear from another person. These days, most people read online via a computer or other device. This is where mobile tablets can help.   Incorporating mobile tablets into your dealership processes allows you to present visual information to the customer. Information increases transparency because the customers f...Read post

  • Websites: Why Your Smallest Investment Still Pisses You Off

    We’ll let you in on a little secret. For years, decades really, you’ve been able to throw some words and photos onto recycled trees, shoot a check out for $5,000 a week and create a line so long out your front door you were laughing. And now you have a virtual ad up every day for one quarter that price (or less for most dealers) and bang your head against a wall. You might even think that your last print ad actually did better than any other source in recent memory. The only rules that changed when you relied on print was if your rep would “take care of you”, a competitor would drop out of the paper for a week, you had a better lost leader than the closest same-brand store or if you included dealer cash or bought down rate and nobody else did that weekend. Nowadays how you show up, where you show up, when you show up doesn’t make sense to you and don’t have anyone even get you started on pricing as gross erodes, software tells you how to optimize your lot and competito...Read post

  • Live Video Walkarounds: Are they Worth the Effort?

    While most forms of digital marketing offer some value to dealers, the one constant has – and always will be – the better your inventory merchandising, the higher your sales.   In the digital world, your merchandising takes place on your VDP Pages, making your VDP Pages one of (if not “the”) most valuable pieces of digital real estate that you have today.  The goal of the merchandising on your VDP Pages is to get a consumer emotionally attached to the vehicle, to take “mental ownership.” Or, at a minimum, to generate enough interest that the shopper will come to your store and take a test drive.  If you can’t obtain one of these goals, then you hope that your presentation of the vehicle at least had a large enough impact on the shopper that they will remember one of your vehicles as they continue their shopping and bounce from site to site.    This is why you invest the time and/or money into your current digital marketing strategy:  You have a website that ge...Read post