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

  • Top 5 Best Practices when posting to eBay classifieds

    With any new product and marketplace there’s a learning curve and we’ve recently gained more knowledge about what it takes to manage the “art” of posting to eBay classifieds. We want to share the Top 5 Best Practices we’ve learned over the last few weeks with you...Read post

  • New Research: 1 in 6 Car Buyers Skips Test-Drive; Nearly Half Visit Just One (Or No) Dealership Prior to Purchase

    DMEautomotive study provides fresh evidence that dealership avoidance is a new car buying “normal” DAYTONA BEACH, Fla. – April 15, 2014 – It may be the second most expensive purchase of most people’s lives, but new research from DMEautomotive (DMEa) reveals that a growing number of Americans are bypassing test-drives – and making strikingly few visits to dealerships – in their car-buying process.   The latest survey of roughly 2,000 automotive consumers1 found that, before purchasing, 16% took no test-drive, and 33% test-drove only one car. And more than two-thirds (68%) reported that they visited only two dealerships or fewer before buying - with 40% visiting only one dealer.   The survey also measured consumer trust of dealer salespeople, and the results were sobering: only 21% claimed they perceive them as “trustworthy,” a lower trust rating than reported for lawyers, mortgage brokers and insurance salespeople.   “This avoidance of physical dealerships ...Read post

  • Gubagoo’s Fast-Growing Chat and ‘Total Engagement’ Solution for Dealer Websites Goes Mobile

    Dealerships can now track – and precisely target – the 40% of their site traffic that comes through smartphones and tablets; 1,100 dealers using Gubagoo report even higher chat-to-lead rates on mobile (74%) than on desktops   West Palm Beach, FL–April 15, 2014 – Gubagoo announced today that its behavioral analytics-based chat and website engagement platform for dealer websites is now fully optimized for mobile. This means that, for the first time, dealerships can track and then relevantly target – through chat and personalized offers and inventory display – every single visitor that hits their website via a smartphone or tablet.   With an estimated 30-40% of dealer site traffic now coming through mobile devices,[1] Gubagoo is the first solution to serve up the right chats, offers and inventory to on-the-go, mobile car shoppers. And it keeps them right on the dealership’s mobile site, unlike other solutions that force the consumer onto another page, breaking continu...Read post

  • Your Employees Are Speed Dating Your Customers

    Every single one of your customers, in some way, shape or form is speed dating you. You have just a few moments to make a first impression - you'd better make it a good one. Because it's no fun going home alone on a Friday night.Read post

  • Resolution Media Social Ad Study Findings

    The study found that many advertisers utilized Facebook ads primarily to generate awareness as opposed to engagement or direct-response actions. Therefore, in these cases, marketers optimize for reach and frequency as opposed to CTR or CPC.Read post

  • 7 Reasons to Adopt the New Twitter Profile Right Now

    This week, Twitter confirmed the long-standing rumors of a “face-lift” and launched its new Profile Page design. Currently the switch is "opt-in only" for existing users, yet all newly created accounts are automatically defaulted to the new look. Twitter's new look is more than a fresh coat of paint; there are several functional elements that you can use as a marketer to your advantage. Here are my 7 reasons to adopt the new Twitter Profile right now:Read post

  • What can you learn from Subaru of Wichita?

    “Look at the ways a dealership can be prepared for this situation at any given time. It’s that media readiness that really helped us move quickly, adapt and draw from who we are this was just an amplification of who we were to begin with,” Wirtz added. Read post

  • Google plus changes....good or bad?

    Google plus has recently gone through a few changes. They are now showing view counts as well as followers. The views are actually the number of times your content has been seen by other people. This includes your photos, posts etc.    The idea behind this it is to increase engagement. Up until now, it was all about "follower count" like you see on Twitter or Facebook. But Google knows that rewarding follower counts only creates spam and other tactics where people just try to boost their followers to look good.    But views are more engaging and show real interaction. It's harder to game "views" on your posts. You actually have to be working with and talking to people who in turn view your stuff. Look at our counts in the attached - we have a lot of views but not many followers. See how that tells the real story? Not everyone will want to "follow" you, but they do like to "view" your updates.   What should a business do? Get active on Google Plus. Interact with others in...Read post