Dealers and dealer service providers pay a lot of attention to pricing online inventory correctly and competitively. Makes sense. In today’s Internet based shopping culture, a consumer wants to know that they are getting a good deal. But we also know that a consumer buys based on what they can afford monthly. “Why not get the car that I really want if I can do $289 a month?”

Almost all dealer website companies now provide a manual payment calculator. Unfortunately, the jury is out on whether they measure up to consumer and dealer expectations. Here’s a sampling of what I found in a competitive metro market for a similar CUV from two competitive websites: Dealer 1: Internet price approx. $24,000 – quoted monthly payment $447. Dealer 2: Internet price: approx. $24,000 – quoted payment $292! I looked into DealerTrack’s PaymentDriver service that uses up-to date lender programs and found that the best tier monthly payment for that vehicle was $357 in that zip code. To do this, I used Dealer 1’s terms and cash down assumptions. One might argue that Dealer 1 undersold their vehicle and Dealer 2 came in too aggressive. In either case, the consumer experience and therefore the Dealer’s competitiveness or reputation suffered.

It’s easier said than done - calculating real payments online is mind-boggling (putting it mildly) due to the variables involved – mfg. rebates and incentives, consumer’s credit, trade-in, lenders that the dealer does business with, term, retail vs. lease etc. etc. The good news is that help is on the way through some innovative products and data.

In talking to several respected dealer principles related to quoting payments online, the following best practices tend to emerge:

• Let my consumer search by payment
• Automate my offers and specials
• Provide a real loan vs. lease payment, including available incentives
• Link payments to inventory, trade and financing online
• Make sure that all of this can be controlled by me

In this age of low interest rates and competitive lease payments, we should revisit that payment calculator we have on our websites and decide if we are missing out on an opportunity to make it a great lead tool. There are also some dealers that would prefer not to provide payments online at all. Ultimately, it is the dealer’s choice on how they want to do business. However, if we do choose to quote payments, we should do it well.

Dealers and dealer service providers pay a lot of attention to pricing online inventory correctly and competitively. Makes sense. In today’s Internet based shopping culture, a consumer wants to know that they are getting a good deal. But we also know that a consumer buys based on what they can afford monthly. “Why not get the car that I really want if I can do $289 a month?”

Almost all dealer website companies now provide a manual payment calculator. Unfortunately, the jury is out on whether they measure up to consumer and dealer expectations. Here’s a sampling of what I found in a competitive metro market for a similar CUV from two competitive websites: Dealer 1: Internet price approx. $24,000 – quoted monthly payment $447. Dealer 2: Internet price: approx. $24,000 – quoted payment $292! I looked into DealerTrack’s PaymentDriver service that uses up-to date lender programs and found that the best tier monthly payment for that vehicle was $357 in that zip code. To do this, I used Dealer 1’s terms and cash down assumptions. One might argue that Dealer 1 undersold their vehicle and Dealer 2 came in too aggressive. In either case, the consumer experience and therefore the Dealer’s competitiveness or reputation suffered.

It’s easier said than done - calculating real payments online is mind-boggling (putting it mildly) due to the variables involved – mfg. rebates and incentives, consumer’s credit, trade-in, lenders that the dealer does business with, term, retail vs. lease etc. etc. The good news is that help is on the way through some innovative products and data.

In talking to several respected dealer principles related to quoting payments online, the following best practices tend to emerge:

• Let my consumer search by payment
• Automate my offers and specials
• Provide a real loan vs. lease payment, including available incentives
• Link payments to inventory, trade and financing online
• Make sure that all of this can be controlled by me

In this age of low interest rates and competitive lease payments, we should revisit that payment calculator we have on our websites and decide if we are missing out on an opportunity to make it a great lead tool. There are also some dealers that would prefer not to provide payments online at all. Ultimately, it is the dealer’s choice on how they want to do business. However, if we do choose to quote payments, we should do it well.

Digital Marketing is hot! Dealers are spending more than ever on SEO, SEM, Digital Media purchases, Inventory on-line merchandizing purchases etc. For good reason: many well respected sources tell us that 90%+ of the car shopping process now starts online.

So, this spend/focus has managed to get the consumer to the dealer’s inventory listings and even a specific vehicle. Now what? Most VDPs (Vehicle Detail Pages) are complicated and confusing to a

normal (non-auto savvy) consumer. On one dealer’s page, I counted 14 “call to action” buttons. In the meantime, the consumer just wants to buy a car (can there be one iPad like button please?). Often, the most prevalent call to action in these VDPS is to “email the dealer”. Why not drive this consumer, further down the sales funnel before they come to the dealership? Why not convert these shoppers to buyers online?

The way that the next generations of consumers want to socialize, shop and in general, spend their time has fundamentally changed. Gen Y and Z is consuming online data usage at an alarming rate. For example, there are some estimates that data usage increased for 18-24 year olds from 216MB a month in Q3, 2010 to 534MB in Q3, 2011. Another study in the UK found that teenagers spend 30+ hours a week online. This generation will grow up with “bytes” as their trusted friends and the concept of spending  hours at a dealership to buy a car that they probably know more about (through online research) will be alien. No wonder, Cap Gemini’s latest Car Online 11/12 survey finds that 42% of worldwide consumers are likely to purchase a car online. This number was 37% in 2010 and single digits in the early 2000s. This is where Digital Retailing comes in.

Most dealers spend time and money to ensure that the in-showroom sales workflow experience is consistent and sensible for the consumer that walks into their doors. So why does it often fall apart on their web-sites? This is an opportunity missed to drive the consumer deeper into the sales funnel before they even lay foot into the showroom. Think about printing out a boarding pass online and coming to the gate directly. This improvement in workflow has nothing to do with pricing or disintermediation. This is about consistency, efficiency and control. This is about delivering the relevant buying experience to a different consumer.  

By the way, Digital Retailing is good for business. Data consistently proves that conversion rates on leads are higher when the consumer has performed various activities towards the purchase online. I will provide more data on this in a subsequent blog post. Enabling web-sites with dealer-controlled, integrated sales workflows is the next logical step in today’s digital metamorphosis. Certainly, some retailers have adopted this concept already, but I believe that the time for mass adoption is around the corner.

Dealers cannot do this alone. Leading vendors will also need to build technology that deeply integrates in-store transactional systems and data to web-site capabilities. Sending an email lead in the ADF-CRM format was a good start. That was more than a decade ago. Technology in this area needs to evolve - soon.

Digital Marketing is hot! Dealers are spending more than ever on SEO, SEM, Digital Media purchases, Inventory on-line merchandizing purchases etc. For good reason: many well respected sources tell us that 90%+ of the car shopping process now starts online.

So, this spend/focus has managed to get the consumer to the dealer’s inventory listings and even a specific vehicle. Now what? Most VDPs (Vehicle Detail Pages) are complicated and confusing to a

normal (non-auto savvy) consumer. On one dealer’s page, I counted 14 “call to action” buttons. In the meantime, the consumer just wants to buy a car (can there be one iPad like button please?). Often, the most prevalent call to action in these VDPS is to “email the dealer”. Why not drive this consumer, further down the sales funnel before they come to the dealership? Why not convert these shoppers to buyers online?

The way that the next generations of consumers want to socialize, shop and in general, spend their time has fundamentally changed. Gen Y and Z is consuming online data usage at an alarming rate. For example, there are some estimates that data usage increased for 18-24 year olds from 216MB a month in Q3, 2010 to 534MB in Q3, 2011. Another study in the UK found that teenagers spend 30+ hours a week online. This generation will grow up with “bytes” as their trusted friends and the concept of spending  hours at a dealership to buy a car that they probably know more about (through online research) will be alien. No wonder, Cap Gemini’s latest Car Online 11/12 survey finds that 42% of worldwide consumers are likely to purchase a car online. This number was 37% in 2010 and single digits in the early 2000s. This is where Digital Retailing comes in.

Most dealers spend time and money to ensure that the in-showroom sales workflow experience is consistent and sensible for the consumer that walks into their doors. So why does it often fall apart on their web-sites? This is an opportunity missed to drive the consumer deeper into the sales funnel before they even lay foot into the showroom. Think about printing out a boarding pass online and coming to the gate directly. This improvement in workflow has nothing to do with pricing or disintermediation. This is about consistency, efficiency and control. This is about delivering the relevant buying experience to a different consumer.  

By the way, Digital Retailing is good for business. Data consistently proves that conversion rates on leads are higher when the consumer has performed various activities towards the purchase online. I will provide more data on this in a subsequent blog post. Enabling web-sites with dealer-controlled, integrated sales workflows is the next logical step in today’s digital metamorphosis. Certainly, some retailers have adopted this concept already, but I believe that the time for mass adoption is around the corner.

Dealers cannot do this alone. Leading vendors will also need to build technology that deeply integrates in-store transactional systems and data to web-site capabilities. Sending an email lead in the ADF-CRM format was a good start. That was more than a decade ago. Technology in this area needs to evolve - soon.