Dealix recently announced their Precision Targeting product, allowing dealers to customize what zip codes they receive leads from for each model. This kind of flexibility is not something most lead providers have advertised, but is something they are capable of doing, and it's vital that dealers understand how to capitalize on it. What follows applies to all non-finance, new-car leads.

Start by understanding what a lead is worth to you at the model level. Some of your new models are selling like hotcakes, and you can't get as many of them as you would like to. These are going to sell fast whether you have leads for them or not, so don't spend the money. This may frustrate the companies charging you on a cost-per-lead or cost-per-sale basis, because these are the vehicles it is easiest to produce leads for. Nonetheless, if you don't need them don't buy them. Here is the exception, you may want to still buy leads in the zip codes closest to you. If you lose these customers to a competitor buying leads in your backyard, you might lose the service business as well. Think about the competitiveness of service when deciding on your lead procurement strategy. This is why the GM, not the GSM, should have the final say on leads procurement.

You probably have some models in your new inventory you wish you didn't have so many of. Chances are, these are the same models the factory is cramming down your throat. This is where you need leads. In fact, you probably need leads from a wide radius. Whether you have any chance of getting the subsequent service business, you need to get rid of those units. We don't always think about the value of new-vehicle inventory declining over time the way used-vehicle inventory does, but that is the reality. These vehicles are not going to get any more valuable as the next model year approaches. Let some lucky customer own them for awhile.

Even with an expanded level of flexibility, there are some challenges. If all you have are the trim package with cloth interior, and all anyone sends leads on is for leather interior, just drilling down to the model level is not going to be enough. This is a challenge I expect leads providers to step up to going forward.

To make sure there is no confusion, subscription listings (AutoTrader.com, Cars.com, etc.) do not fall into the same category. You pay one price for the service, so don't hold any of your inventory back. Treat these sites as you would your own site. In both cases, your marginal cost for including the hot-selling, low-supply vehicles is zero. Your decisions for subscription services are whether to use the service or not, and at what level. 

Dealix recently announced their Precision Targeting product, allowing dealers to customize what zip codes they receive leads from for each model. This kind of flexibility is not something most lead providers have advertised, but is something they are capable of doing, and it's vital that dealers understand how to capitalize on it. What follows applies to all non-finance, new-car leads.

Start by understanding what a lead is worth to you at the model level. Some of your new models are selling like hotcakes, and you can't get as many of them as you would like to. These are going to sell fast whether you have leads for them or not, so don't spend the money. This may frustrate the companies charging you on a cost-per-lead or cost-per-sale basis, because these are the vehicles it is easiest to produce leads for. Nonetheless, if you don't need them don't buy them. Here is the exception, you may want to still buy leads in the zip codes closest to you. If you lose these customers to a competitor buying leads in your backyard, you might lose the service business as well. Think about the competitiveness of service when deciding on your lead procurement strategy. This is why the GM, not the GSM, should have the final say on leads procurement.

You probably have some models in your new inventory you wish you didn't have so many of. Chances are, these are the same models the factory is cramming down your throat. This is where you need leads. In fact, you probably need leads from a wide radius. Whether you have any chance of getting the subsequent service business, you need to get rid of those units. We don't always think about the value of new-vehicle inventory declining over time the way used-vehicle inventory does, but that is the reality. These vehicles are not going to get any more valuable as the next model year approaches. Let some lucky customer own them for awhile.

Even with an expanded level of flexibility, there are some challenges. If all you have are the trim package with cloth interior, and all anyone sends leads on is for leather interior, just drilling down to the model level is not going to be enough. This is a challenge I expect leads providers to step up to going forward.

To make sure there is no confusion, subscription listings (AutoTrader.com, Cars.com, etc.) do not fall into the same category. You pay one price for the service, so don't hold any of your inventory back. Treat these sites as you would your own site. In both cases, your marginal cost for including the hot-selling, low-supply vehicles is zero. Your decisions for subscription services are whether to use the service or not, and at what level. 

I've heard a number of industry professionals say that cars are now a commodity, usually in the process of explaining why it is so important to price relative to the market. I'm concerned about the use of this exaggeration. In fact, It is because I am a proponent of pricing tools and adjusting prices relative to market forces that I am concerned about any exaggeration used to support the argument.

Let's start with new vehicles. A new Buick Verano with the leather group is not a commodity. Some have sunroofs, spoilers, navigation, all-weather floor mats, and cargo nets. Some come with the $125 pedal covers and some do not. Even if two of these vehicles were exactly configured and of the same color, the deal does not stop there. There is the entire back-end portion of the deal to consider. I know some dealers I'd happily pay $50 more to just to avoid having to deal with other dealers at the F&I stage. Even if the customer is paying cash and not buying anything else in F&I, that does not preclude some dealers from charging an additional processing fee.

It doesn't matter who you buy a bar of gold from, because it is a commodity. But it does matter who you buy a vehicle from, because when we look at the entire bundle of features and benefits delivered by the dealer, it is not a commodity. Not only do some stores have better reputations than others, there are probably many shoppers in your community you have no reputation with. This is why actual photos of the new vehicles produce more contacts than stock photos, many customers don't even trust that you actually have the vehicles you say you do. Preference for the retailer impacts the price paid. In the strictest sense, you can't say that about a commodity.

Two used cars of the same year/make/model/trim and accessories with the same mileage and in the same condition will likely sell in the same market for a similar price. Just how similar can depend as much on how well they are merchandised as it does the slight variations demonstrated by that merchandising. If the basic information is the same, the vehicle with more detailed information may appear to be a better value even if some of that information discloses imperfections. Some imperfections are to be expected, disclosing those that are known can reduce the worry about imperfections that cannot be observed. Vehicle condition reports can build preference for the vehicle and the store.

Commodity means there is no preference, and the word is often misused. Oil is said to be a commodity, but it is not. Only oil that is properly categorized can be called a commodity. Crude oil that is certified to be both light and sweet can be confidently purchased at the same price as other light/sweet crude. If the condition report is the same, then it is a commodity.

Price is an essential element to marketing. Now that consumers have access to market information online, there are many of them you will never even meet unless you have the right car at the right price. But that is not enough. Shoppers buy value. Without detailed information about what that price represents, it cannot be processed into a comparable value. When all dealers merchandise their vehicles the same and have the same disclosed back-end practices, then we can talk about cars being a commodity. Until then, competitive attractive pricing will bring more contacts from online shoppers, but the advantage among comparable cars at the same price goes to the vehicle with the most transparent merchandising from the dealership with clearly disclosed policies.

I've heard a number of industry professionals say that cars are now a commodity, usually in the process of explaining why it is so important to price relative to the market. I'm concerned about the use of this exaggeration. In fact, It is because I am a proponent of pricing tools and adjusting prices relative to market forces that I am concerned about any exaggeration used to support the argument.

Let's start with new vehicles. A new Buick Verano with the leather group is not a commodity. Some have sunroofs, spoilers, navigation, all-weather floor mats, and cargo nets. Some come with the $125 pedal covers and some do not. Even if two of these vehicles were exactly configured and of the same color, the deal does not stop there. There is the entire back-end portion of the deal to consider. I know some dealers I'd happily pay $50 more to just to avoid having to deal with other dealers at the F&I stage. Even if the customer is paying cash and not buying anything else in F&I, that does not preclude some dealers from charging an additional processing fee.

It doesn't matter who you buy a bar of gold from, because it is a commodity. But it does matter who you buy a vehicle from, because when we look at the entire bundle of features and benefits delivered by the dealer, it is not a commodity. Not only do some stores have better reputations than others, there are probably many shoppers in your community you have no reputation with. This is why actual photos of the new vehicles produce more contacts than stock photos, many customers don't even trust that you actually have the vehicles you say you do. Preference for the retailer impacts the price paid. In the strictest sense, you can't say that about a commodity.

Two used cars of the same year/make/model/trim and accessories with the same mileage and in the same condition will likely sell in the same market for a similar price. Just how similar can depend as much on how well they are merchandised as it does the slight variations demonstrated by that merchandising. If the basic information is the same, the vehicle with more detailed information may appear to be a better value even if some of that information discloses imperfections. Some imperfections are to be expected, disclosing those that are known can reduce the worry about imperfections that cannot be observed. Vehicle condition reports can build preference for the vehicle and the store.

Commodity means there is no preference, and the word is often misused. Oil is said to be a commodity, but it is not. Only oil that is properly categorized can be called a commodity. Crude oil that is certified to be both light and sweet can be confidently purchased at the same price as other light/sweet crude. If the condition report is the same, then it is a commodity.

Price is an essential element to marketing. Now that consumers have access to market information online, there are many of them you will never even meet unless you have the right car at the right price. But that is not enough. Shoppers buy value. Without detailed information about what that price represents, it cannot be processed into a comparable value. When all dealers merchandise their vehicles the same and have the same disclosed back-end practices, then we can talk about cars being a commodity. Until then, competitive attractive pricing will bring more contacts from online shoppers, but the advantage among comparable cars at the same price goes to the vehicle with the most transparent merchandising from the dealership with clearly disclosed policies.

The wall between fixed operations and sales needs to come down.

• Franchised dealers must regain some of the accessory sales lost to online and offline competitors. That is not going to happen unless Parts, Service, and Sales all work to make it happen.
• Regardless of what is done with social media, it is impossible to maximize customer relationships for loyalty and advocacy if the store is not uniformly committed to growing those customer relationships.  
• Service revenue is lost every month when customers call in for service on the same tracking number they used when initially shopping for the car itself. Sales people don't get paid to answer service calls, and the way some of them handle those calls surely reflects it.
• Most service managers don't get paid to teach people how to operate their vehicles. And it shows when customers call up complaining about their car not operating when the customer simply doesn't know how it is supposed to operate. Vehicle delivery is insufficient at thousands of stores. Of course, most sales people don't care about that. Their only worry is about the next sale, not the last one.
• Occasionally, nasty comments are tossed back and forth over the variable-ops/fixed-ops wall, but most of the time these departments uttered their disdain for each other to the consumer.

When Ronald Reagan gave his famous speech at the Berlin Wall, telling Mikhail Gorbachev to "tear down this wall," it was not a new policy position. The five previous presidents had all wanted the same thing. In fact the wall did not come down for another 29 months, nearly one year after Reagan left office. Persuasion takes multiple efforts, even when it is clearly the right thing to do.

Many stores are changing their commission plans on accessories, splitting the gross profit equally between parts, service, and sales. Although there are plenty of success stories coming from the use of this approach, some stores baulk at the idea of taking such a big step right away. At a minimum, GMs can start by adding non-human touchpoints that introduce service to sales customers and sales to service customers. Here are a few product examples:

1. AdVantage Tec, an Innovation Cup finalist at DSES, uses 15% of the TV screen in the waiting area for promotional messages, often promoting sales to waiting service companies.
2. Dealer e-Process won the 2011 AWA Fixed Ops Technology Award for their service solutions on dealership websites. Many websites are virtually controlled by Sales and neglect service opportunities.

I'd love to hear what your store or product is doing to help tear down this wall. 

The wall between fixed operations and sales needs to come down.

• Franchised dealers must regain some of the accessory sales lost to online and offline competitors. That is not going to happen unless Parts, Service, and Sales all work to make it happen.
• Regardless of what is done with social media, it is impossible to maximize customer relationships for loyalty and advocacy if the store is not uniformly committed to growing those customer relationships.  
• Service revenue is lost every month when customers call in for service on the same tracking number they used when initially shopping for the car itself. Sales people don't get paid to answer service calls, and the way some of them handle those calls surely reflects it.
• Most service managers don't get paid to teach people how to operate their vehicles. And it shows when customers call up complaining about their car not operating when the customer simply doesn't know how it is supposed to operate. Vehicle delivery is insufficient at thousands of stores. Of course, most sales people don't care about that. Their only worry is about the next sale, not the last one.
• Occasionally, nasty comments are tossed back and forth over the variable-ops/fixed-ops wall, but most of the time these departments uttered their disdain for each other to the consumer.

When Ronald Reagan gave his famous speech at the Berlin Wall, telling Mikhail Gorbachev to "tear down this wall," it was not a new policy position. The five previous presidents had all wanted the same thing. In fact the wall did not come down for another 29 months, nearly one year after Reagan left office. Persuasion takes multiple efforts, even when it is clearly the right thing to do.

Many stores are changing their commission plans on accessories, splitting the gross profit equally between parts, service, and sales. Although there are plenty of success stories coming from the use of this approach, some stores baulk at the idea of taking such a big step right away. At a minimum, GMs can start by adding non-human touchpoints that introduce service to sales customers and sales to service customers. Here are a few product examples:

1. AdVantage Tec, an Innovation Cup finalist at DSES, uses 15% of the TV screen in the waiting area for promotional messages, often promoting sales to waiting service companies.
2. Dealer e-Process won the 2011 AWA Fixed Ops Technology Award for their service solutions on dealership websites. Many websites are virtually controlled by Sales and neglect service opportunities.

I'd love to hear what your store or product is doing to help tear down this wall. 

Selling does not start at the curb. When I started selling cars in 1979, I stood by laser focused on the curb. That is where my hunt began. Like a chained dog my operative range was limited to the edge of the curb. Cross the line, and you were mine. My grandfather before me had knocked on doors and gone into barns to talk to people about his new Chryslers and DeSotos. But that sort of outreach was not part of the program for dealerships in my day. The hunt started at the curb.

In 1995, Autobytel began reaching past the curb via the internet. They lured customers online and packaged them up as leads. AutoTrader.com followed closely behind with an online listings model that was a huge improvement over newspaper classified ads. The ads were interactive. They went back and forth with the shopper. Most dealerships viewed this as advertising. My grandfather, had he still been alive, would have quickly recognized it as sales.

After all, the internet offers two-way communication. One-way devices (radio, television, print, and outdoor) were advertising, meant to stimulate the customer into coming to the store for a two-way conversation we called the sales process. The telephone, a two-way communication device, was clearly recognized as a sales tool in my grandfather's day, but by my time the approach to the phone was "just get them in." After all, everyone knew sales started at the curb. No wonder the internet was quickly misunderstood as an advertising medium rather than a sales tool.

Today, selling cars starts with price, photos, video, and text descriptions. Vehicles not online are not offered to the more than 80% of car buyers who use the internet in their automotive shopping process. Vehicles online without pricing or complete merchandising are generally dismissed by consumers as not really for sale either. Shoppers engage in a two-way conversation with the internet. The shopper clicks or types and the internet responds with content. If your vehicle has little or nothing to say for itself, the conversation quickly dries up and moves to another vehicle that is for sale and ready for an online conversation.

My grandfather would have been amazed at this modern sales tool. The notion that he could put everything he knew about the vehicle into an online listing and dozens of people would interact and converse with that information until one of them was sold enough to contact him would have seemed amazing. It also would have saved a great deal of shoe leather. He might have been intimidated by the first fifteen years of technology surrounding automotive internet. But now merchandising a vehicle is literally as easy as turning on an iPhone application and following the built-in steps (e.g. cDemo's Mobile Inspector App). Any eight year old can do it. No second device, no cables, no moving files around. My grandfather would have been able to pick it up without any training, and he would have recognized that he was selling cars, not just advertising them.

We have come full circle over the past four generations. During the depression and late 1940's sales efforts went out to where the customers were. As television advertising took hold, sales efforts were chained down. But the internet set those sales efforts free, going back out to shopper's homes, places of work, or wherever they want us, whenever they want us. The chain and collar are off. Take your price and rich content beyond the curb and get some new sales started!

Selling does not start at the curb. When I started selling cars in 1979, I stood by laser focused on the curb. That is where my hunt began. Like a chained dog my operative range was limited to the edge of the curb. Cross the line, and you were mine. My grandfather before me had knocked on doors and gone into barns to talk to people about his new Chryslers and DeSotos. But that sort of outreach was not part of the program for dealerships in my day. The hunt started at the curb.

In 1995, Autobytel began reaching past the curb via the internet. They lured customers online and packaged them up as leads. AutoTrader.com followed closely behind with an online listings model that was a huge improvement over newspaper classified ads. The ads were interactive. They went back and forth with the shopper. Most dealerships viewed this as advertising. My grandfather, had he still been alive, would have quickly recognized it as sales.

After all, the internet offers two-way communication. One-way devices (radio, television, print, and outdoor) were advertising, meant to stimulate the customer into coming to the store for a two-way conversation we called the sales process. The telephone, a two-way communication device, was clearly recognized as a sales tool in my grandfather's day, but by my time the approach to the phone was "just get them in." After all, everyone knew sales started at the curb. No wonder the internet was quickly misunderstood as an advertising medium rather than a sales tool.

Today, selling cars starts with price, photos, video, and text descriptions. Vehicles not online are not offered to the more than 80% of car buyers who use the internet in their automotive shopping process. Vehicles online without pricing or complete merchandising are generally dismissed by consumers as not really for sale either. Shoppers engage in a two-way conversation with the internet. The shopper clicks or types and the internet responds with content. If your vehicle has little or nothing to say for itself, the conversation quickly dries up and moves to another vehicle that is for sale and ready for an online conversation.

My grandfather would have been amazed at this modern sales tool. The notion that he could put everything he knew about the vehicle into an online listing and dozens of people would interact and converse with that information until one of them was sold enough to contact him would have seemed amazing. It also would have saved a great deal of shoe leather. He might have been intimidated by the first fifteen years of technology surrounding automotive internet. But now merchandising a vehicle is literally as easy as turning on an iPhone application and following the built-in steps (e.g. cDemo's Mobile Inspector App). Any eight year old can do it. No second device, no cables, no moving files around. My grandfather would have been able to pick it up without any training, and he would have recognized that he was selling cars, not just advertising them.

We have come full circle over the past four generations. During the depression and late 1940's sales efforts went out to where the customers were. As television advertising took hold, sales efforts were chained down. But the internet set those sales efforts free, going back out to shopper's homes, places of work, or wherever they want us, whenever they want us. The chain and collar are off. Take your price and rich content beyond the curb and get some new sales started!

Car shoppers want to give you and your inventory the finger. The iPad is selling at a rate about 100,000 per day, so you've probably used one by now. Isn't it amazing what you can do with a finger. Thousands of auto buyers in your community want to give you and your inventory the finger on their iPads, but they can't. Sure they can access your website on their iPad, but your navigation is not designed to let them give you the finger the way they can with iPad apps.

Owners of iPads strongly prefer to use iPad apps, not those tiny little iPhone apps, real iPad apps. Does this mean you need to rush out and create an iPad app for your inventory? Heck no. Chances are very few people in your community would download it anyway. Navigating to an app is much different than navigating to a website. Soon, there will be a few dominant automotive shopping apps designed specifically for the iPad. They will have millions of vehicles in inventory and virtually every franchised dealer in their dealer directories.

The first of these application is now in Beta and will launch with over 100,000 downloads. This is the year of the iPad. Get ready to let shoppers in your community give you the finger, and their business.

Car shoppers want to give you and your inventory the finger. The iPad is selling at a rate about 100,000 per day, so you've probably used one by now. Isn't it amazing what you can do with a finger. Thousands of auto buyers in your community want to give you and your inventory the finger on their iPads, but they can't. Sure they can access your website on their iPad, but your navigation is not designed to let them give you the finger the way they can with iPad apps.

Owners of iPads strongly prefer to use iPad apps, not those tiny little iPhone apps, real iPad apps. Does this mean you need to rush out and create an iPad app for your inventory? Heck no. Chances are very few people in your community would download it anyway. Navigating to an app is much different than navigating to a website. Soon, there will be a few dominant automotive shopping apps designed specifically for the iPad. They will have millions of vehicles in inventory and virtually every franchised dealer in their dealer directories.

The first of these application is now in Beta and will launch with over 100,000 downloads. This is the year of the iPad. Get ready to let shoppers in your community give you the finger, and their business.