From the Moz blog today - This is a MUST READ Why I Stopped Selling SEO Services and You Should, Too - https://moz.com/blog/why-i-stopped-selling-seo-services-and-you-should-too * Search "best headphones" - No product pages, all articles * Search "restaurants in Miami" - Not a single result on the first page is a restaurant's website. * Search "plumbers in San Francisco" - Not a single result on the first page is a website

Well said Ed

Thanks so much Pam

Stirring the pot again, Ed? I tend to agree with you, but others can make it work in the traditional way still. So much has to do with store culture and how customers are handled. I just don't believe there is ONE right way. Eternity...yeah...only one way. :)

"This process isn’t right for every dealership, but I do believe it is the future." I did mean my last sentence Tom - it's is a definite culture shift.

I love the point of the article, and I'd simplify it thusly: It's all about total revenue. There's a finite supply of buyers in market at any given moment. Of these buyers, a high percentage are price driven (wrongly so, but it is what it is). The people in this group will immediately dismiss options that they view as "overpriced," unless they have some other reason to consider the product. Therefore, dealers who price their products above the going rate either a) need something else to sell or b) sacrifice an opportunity to do business with members of this group.Are their buyers who are not price driven, and who therefore not going to automatically dismiss options? Sure. But what percentage are they of in-market buyers? What's more, can we prove that these people aren't actually influenced by some other factor (previous positive experience, relationship or affinity, etc.)? None of this is revolutionary stuff. Whether you're selling cars or sneakers, price drives a lot of buyers to take (or not take) action. If you're a retailer willing to sacrifice those opportunities, more power to you. But it's probably not sound business in markets that are particularly price driven...

RE: "Say Hello to the Bell Curve"Hello to the false analogy. What is laughable is the thought that this "concept" is "new." Most green peas start in the business with the idea of treating everyone "fairly," which is to say that everyone should pay about the same margin. Most of us outgrow that, especially when we inherit P&L responsibility. That changes one from idealist to pragmatist in a hurry. You take gross profit where ever you can find it.I started in the auto business in 1970 in a store that did business exactly this way. We had an established margin for each make/model and eagerly quoted price to anyone who asked, and many who didn't. The label "traditionalist?" Now that's a hoax. There are many dealerships that operated based on the idea that everyone should pay about the same margin decades ago. To try to paint previous iterations of auto retail as "all the same" is the mark of someone who not only wasn't there, but who didn't do his homework. There is, however, a difference between the so called old days and today. Sales people stayed around in the old days and repeat business was a much more important element in auto retail. If you want to change today's auto retail for the better, why not start there instead of trying to get everyone to discount their new vehicle inventory up front? Work on sales person training and retention. Work on producing enough gross profit so they can thrive. Another thing, why not replace the IVR system answering telephones in dealerships with a real human being before trying to persuade to arbitrarily give up gross profit out of fear of the consumer?What isn't a hoax is the math. The idea that so called "traditionalist dealers," whomever they are, start everyone at MSRP is another hoax. Many post price leaders priced at extremely low prices, perhaps even loss leaders. Regardless, the idea of giving away available gross profit upfront as a matter of regular process and making it up in volume is as old as the hills. Trying to paint that "novel" concept as new is ludicrous. To dealers who want to adopt such a sales process, I say, "Go for it." Your competitors will love you. But then, there aren't a lot of dealers posting here.

@David - This isn't about treating people "fairly", it's about generating traffic, grabbing market share from your competition, and total revenue (as Jason Lancaster states). There are certainly different strategies at play and all work best in different environments and at different times. I used to supply conversion vans to a large dealership, back in the day. We'd set up one van as an "ad van" - as bait. It had a mismatched tape package, no TV and no rear sofa. We'd advertise it in the newspaper as a loss leader. When customers showed up and saw how ugly and poorly equipped the van was, they'd be switched to a more expensive, better equipped, better looking unit. A classic bait and switch. It wouldn't work nearly as well today for a couple of reasons; 1.) It's no longer the 'Newspaper Era', shoppers expect to see your entire inventory online today. 2.) The Internet has given customers a bigger voice to express displeasure - a way to amplify their thoughts - and a dealer who did the same thing today would see their reputation suffer. You suggest posting "price leaders priced at extremely low prices", Is that the only inventory you put online? Do you put the rest of your inventory up with "Call for Price"? Price is important, but so is selection. I fear this old newspaper tactic is past its "sell by" date. At the beginning of my original post I stated I've worked with dealers who have employed this strategy for years, but like all successful strategies continues to evolve as conditions change. You complain about giving away "available gross profit", but you don't acknowledge that this is only potential profit. In the age of the Internet, home runs are few and far between. I'm suggesting that Market-Based Pricing and minimizing (not necessarily eliminating) negotiation makes more sense in today's market - and generates higher volume and makes more profit to boot.

@David - You said "Most green peas start in the business with the idea of treating everyone "fairly," which is to say that everyone should pay about the same margin." First, this is condescending. Second, the concept being discussed is not about "fairness." Not even a little bit. The concept is related to capturing as much revenue as possible in a market where the consumer can *easily* compare pricing on a little thing I like to call "the Internet." (OK, that was condescending too.) You go on to argue that fair pricing is a hoax, that dealers who don't ask for all the money up front can't make enough to train staff, and that people with experience know you have to take profit wherever you can get it. Perhaps you'd care to explain how CarMax works? Or why AutoNation and Sonic have embraced this very model wholeheartedly? Or why these companies are enjoying fantastic profits and growing rapidly? Those companies are traded on the stock exchange - is your dealership traded on the NYSE? Might that be a sign of them knowing something you don't? As I said in my previous comment, dealers certainly CAN ask for full MSRP on every car every time. But they must do so with the understanding that they will lose the opportunity to sell a car to a big percentage of in-market buyers...because price comparisons are as easy as clicking a mouse button.

RE: First, this is condescending. And accurate. RE: "Second, the concept being discussed is not about "fairness." Not even a little bit. The concept is related to capturing as much revenue as possible in a market where the consumer can *easily* compare pricing on a little thing I like to call "the Internet." (OK, that was condescending too.) You make the mistaken assumption that because consumers today have more information because of the Internet, they know more than they did in previous generations. Nothing could be further from the truth. If you are attempting to make the case that consumers know everything so we have to compete with other dealers in terms of "fair pricing," that is based on consumer perceptions, and they don't share the same perception. I suggest we help them to their perception one customer at a time. In the case of the pre-owned business, it is absolutely true that page views is dependent on how a dealer prices his/her inventory online. I'm not addressing that. Dale Pollak and others are certainly correct. But Dale brought the subject of efficient markets up in his first book without taking the discussion to its logical conclusion. In a transparent/efficient market, both buyer and seller have not only the same information, but equal ability to interpret that information. That results in disintermediation. That's elimination of the middle man. So if we are looking to cause our own demise, continue pushing for transparency. As it regards "fair" If your objective is to be fair with consumers based on their perceptions, try posting your triple net cost on new vehicles and ask them to name their fair margin. Now that would also be truly transparent. You're free to try that. Please report back with your results. Until then, transparency is a word that has actual meaning. Using it as a euphemism to try to appeal to consumers isn't transparent or even honest. Besides, they don't believe it anyway. RE: "You go on to argue that fair pricing is a hoax, that dealers who don't ask for all the money up front can't make enough to train staff, and that people with experience know you have to take profit wherever you can get it." When did I EVER say we should ask for all the money up front. What I've said is that trying to appeal to a consumers sense of fairness by providing across the board discounts from MSRP on new inventory isn't a winning formula, but those who want to try should by all means do so. Once your competitors learn to sell against you, you might want to reconsider. But you might have an expense structure that allows you to use your version of "fair pricing" (their is not single definition) and survive. I started in the auto business in such a store and worked there for 7 years. We called ourselves Moral Motors. We didn't have the Internet to hastily provide everyone with a new car discount, but the intent was to try to appeal to consumers based on fairness. I spent 7 years getting my leg pissed on. I achieved real success when I learned to take profit wherever I could without automatically providing unnecessary discounts. Once you've given it away, its hard to get it back. RE: "Perhaps you'd care to explain how CarMax works?" CarMax doesn't sell new cars. RE: "Or why AutoNation and Sonic have embraced this very model wholeheartedly?" Why not let some time go buy before using terms like wholeheartedly. The Ford Collection embraced their concept wholeheartedly too. Instead of coming out publicly and admitting they were wrong, they sold their stores back to real dealers. I know plenty of dealers who still use fair price/one price, etc. as part of their marketing strategy. Pretending not to negotiate is simply another strategy of negotiation. Sonic seems to be floundering and flailing these days. I don't have time here to get into Sonic particulars. They are NOT rolling their new deal out to all of their stores. It is supposedly in pilot in a couple of places where simple research shows they don't have a handle on things yet. For example, they hadn't even considered the compliance angle of having sales people do their own F&I. In fact, he person running the new initiative didn't even know who or what AFIP is when I asked. If I get a chance to mystery shop some AutoNation stores I'll be glad to report back as to how closely they adhere to whatever it is they say they do. RE: "Or why these companies are enjoying fantastic profits and growing rapidly?" Which companies are you saying are enjoying fantastic profits and growing rapidly? Sonic? Their net just dropped 45% from an already low level. "One Sonic-One Experience offers no-haggle pricing and has a goal of completing a purchase in 45 minutes or less with one sales rep using an iPad. Sonic is betting that by eliminating car-buying pain points, it will become a preferred place to shop and thereby gain market share." Perhaps you should wait until this is complete and actually successful before touting yet another claimed triumph in auto retail that shortly thereafter comes tumbling down. Don't confuse buying new dealerships with public money with year to year same store growth. They aren't they same thing. Using size and growth as a proof of concept isn't always valid, especially when Amazon hasn't yet broken black after years in business. Those companies are traded on the stock exchange - is your dealership traded on the NYSE? Might that be a sign of them knowing something you don't? RE: "As I said in my previous comment, dealers certainly CAN ask for full MSRP on every car every time. But they must do so with the understanding that they will lose the opportunity to sell a car to a big percentage of in-market buyers...because price comparisons are as easy as clicking a mouse button." Dealers can only take skinny deals when they have some fat ones to maintain a reasonable average. You need the skinny deals to achieve market penetration. You need market penetration to keep your OEM off your back. Skinny deals often pay off with a large back end or trade profit. Skinny deals are often all that can be had because of consumer trade negative equity and lender advance calls. You need some fat ones to offset them. If you think you can get those by giving away premature discounts on your website, I say "Go for it." Its your choice, not mine. For my part, I'd prefer to do aggressive price leader advertising on specific models and not address discounts until its appropriate and/or necessary. RE: "But they must do so with the understanding that they will lose the opportunity to sell a car to a big percentage of in-market buyers...because price comparisons are as easy as clicking a mouse button." And, of course, you must think everyone does exactly that on new vehicles so you beat them to the punch? Now there's a novel strategy. We used to provide upfront discounts without provocation out of fear of the customer in 1970. And now that mindset is back and called "new?" Really?

@ Ed - RE: "We'd set up one van as an "ad van" - as bait. It had a mismatched tape package, no TV and no rear sofa. We'd advertise it in the newspaper as a loss leader. When customers showed up and saw how ugly and poorly equipped the van was, they'd be switched to a more expensive, better equipped, better looking unit. A classic bait and switch." https://www.ftc.gov/public-statements/1983/10/ftc-policy-statement-deception You might want to review this. Advertising new vehicles for cheap prices when you have them in inventory and list them by stock number along with their equipment, and make no misrepresentations is NOT a UDAP. If a consumer decides they want one with more equipment, it is the consumer doing the switching. If a consumer wants a better equipped vehicle for the same price as a stripped one, who is being unreasonable? RE: "Over the years I’ve had the pleasure of working with dealers who have embraced a dramatically different sales process" Are you trying to say this is "new?"

The only definition of "transparency" that counts is that of the consumer, regardless of what it means in economics. Does anyone really think consumers believe dealer claims of "transparency?"

David - You lost me here: "You make the mistaken assumption that because consumers today have more information because of the Internet, they know more than they did in previous generations. Nothing could be further from the truth." If you're honestly arguing that consumers don't have more information now than they did 20 years ago, I don't see any reason to continue this conversation.

@David - Please note that I didn't say it was illegal - I said that strategy doesn't work well for two reasons (you didn't address these in your response) 1.) It's no longer the 'Newspaper Era', shoppers expect to see your entire inventory online today. 2.) The Internet has given customers a bigger voice to express displeasure - a way to amplify their thoughts - and a dealer who did the same thing today would see their reputation suffer.

RE: "My old friend David Ruggles still contends you HAVE to make home runs and take some really skinny deals to maintain market share, while I contend that advertising a discounted price and minimizing (or eliminating) negotiation is the best way to increase volume, total profit, and market share." I guess it might be better if I state my own position since some people tend to misrepresent it. First, I have been on record for YEARS about the Internet's impact on the pre-owned business. In fact, I have been writing columns in support of "market based" pricing on pre-owned from my first book review of Dale Pollak's first book written for Wards in about 2009. I can't lay my hands on the first column I wrote on the issue but I did run across this one that references the issue in a piece on a backwards practice I call "retail recon." http://autosandeconomics.blogspot.com/search?q=from+the+front+line+to+the+bottom+line I might add that Dale and I were in perfect alignment at this point other than the fact that I advocate dealers identifying opportunity vehicles and stocking them for particular purpose. Dale and I talked at length on this and ended up disagreeing. I believe you can make a market for a particular make model if you can buy it right and for a specific purpose. Since I was the guy who conceived a software product originally called "Arbitrage," I probably know a little more about how the process works than Dale does. And he knows more in his area of specialization than I do. Bottom line, I believe a dealer should absolutely make vAuto or a similar program the FOUNDATION for their pre-owned operation but also look for opportunities based on specific criteria I won't go into in detail at this writing. Those opportunities recognize the fact that consumers still buy based on monthly payment REGARDLESS of how they get to your store. If you make payment part of your message you can build more traffic than merely trying to attempt to attract buyers based on a page view strategy. I will again mention the fact that Dale neglected to complete his discussion of efficient markets in his first book, leaving out the entire topic of disintermediation. Since his pitch is to dealers, I can understand why he did that. But dealers need to be aware of the economic realities of an efficient market in the auto business. Be careful what you wish for. So much for pre-owned. Where I diverge is in the area of NEW VEHICLES! Coincidentally, after being bought out by AutoTrader/Cox, vAuto began to advocate for a practice of discounting new vehicle inventory on the web using an approach similar to what they use on the pre-owned side. Ed, why must you try to say that dealers have to abandon your juicy center to get the fat deals as well as the skinny ones? You can have it all. The math on this is simple. Throwing in CarMax as something that supposedly supports your view is entirely invalid. First, my position is on NEW VEHICLES!!!! Second, CarMax recons at an internal cost of zero markup, so trying to compare their numbers to the average new car franchise pre-owned department is invalid on its face.

David - You lost me here: RE: "You make the mistaken assumption that because consumers today have more information because of the Internet, they know more than they did in previous generations. Nothing could be further from the truth." If you're honestly arguing that consumers don't have more information now than they did 20 years ago, I don't see any reason to continue this conversation." If you read what I wrote it is VERY clear. But I will elaborate. There is a HUGE difference between having more information and knowing more. Consumers have to unpack all of the information available. Its like drinking from a fire hose for them. Over the course of the last few years I have visited hundreds of dealerships. I find a lot of things that haven't changed over the 40 years I've been participating in the industry. First, a large number of consumers still leave with a completely different vehicle than they came in to buy. Second, perception of the deal is what makes consumers buy. The list goes on, but human nature is still driving the bus. The biggest difference I see these days is that consumers think they know a lot more than they do and it is a HUGE challenge to convince them they are wrong and still be able to do business with them. Our industry has made a concerted effort to try to convince consumers we are being more transparent with them when the opposite is true. Why? Because transparency isn't the objective. Gross profit is. In the following column I itemize some auto industry history. For those who weren't around in 1970, consumers had less information because there was less to be had. There were fewer OEMs. Business was transacted OVER INVOICE. Invoice was a real number. The complexity of "trunk money" via "stair step" barely existed. Joe Garagiola had yet to utter his famous line, "Buy a Car, Get a Check." Over the years the industry has shortened over invoice markup substantially, while moving it to "trunk money" in a concerted effort to keep cost information from consumers. Hence, it isn't so rare for a dealer to lead with invoice these days. After all, there could be thousands of dollars of gross profit still available at invoice. I'll be glad for you to tell me if a consumer would think this practice is more or less transparent. And I'll be happy for any dealer who wants to discount his/her new vehicle inventory up front on the web. And so will that dealer's competitors. Go for it! CONSUMERS HAD LESS INFORMATION BUT "KNEW" A LOT MORE. http://wardsauto.com/industry-voices/enough-transparency

You said: "The biggest difference I see these days is that consumers think they know a lot more than they do and it is a HUGE challenge to convince them they are wrong and still be able to do business with them" That's my point. As I said in my first comment: "Of these [in-market] buyers, a high percentage are price driven (wrongly so, but it is what it is). The people in this group will immediately dismiss options that they view as 'overpriced,' unless they have some other reason to consider the product." The Internet makes it very difficult to convince anyone of anything. This means that 'Joe Consumer' isn't going to see a vehicle priced at MSRP and think "Hmm, I wonder why they're thousands higher than everyone else - I have to go visit that dealership!" Instead, they're just going to find a lower price. They "think they know", and they also think that a low asking price is really, really important. Next, your straw man arguments about 'transparency' and 'fairness' are ridiculous. The ONLY person that's used the word transparency is you, and you were also the first person to use the word "fair" in this context. Please don't apply your contrived logic to my argument (where it does not belong) and then refute it. Summing up: The first problem with the Internet and vehicle pricing is that consumers - who often don't know any better - let price guide their decision making about which dealers to call, which dealers to go visit, etc. It sucks, but it's reality. People who argue for listing inventory online (new or used) at anything other than market price are fools of the highest order.

RE: ""The biggest difference I see these days is that consumers think they know a lot more than they do and it is a HUGE challenge to convince them they are wrong and still be able to do business with them." That's my point. Then we have the same point, but you have been saying consumers "know" more than before, and they don't. They "know" less. Consumers have always thought they know more than they do. The Internet has exacerbated that situation, along with our industry's strategy of obfuscation (opposite of transparency) over the last few decades. RE: "As I said in my first comment: "Of these [in-market] buyers, a high percentage are price driven (wrongly so, but it is what it is). The people in this group will immediately dismiss options that they view as 'overpriced,' unless they have some other reason to consider the product." And this became "new" when the Internet was invented? Sounds to me like one needs to have enough imagination to deal with this "new thing" you mention. Is that posting discounts on new inventory on line? If so, I say "Go for it." Your competitors will love you. But don't call it new and innovative, because it isn't. RE: "The Internet makes it very difficult to convince anyone of anything." I have to ask you this question. Are you old enough to have done business BEFORE the Internet era, say before 1993? RE: "This means that 'Joe Consumer' isn't going to see a vehicle priced at MSRP and think "Hmm, I wonder why they're thousands higher than everyone else - I have to go visit that dealership!" Instead, they're just going to find a lower price. They "think they know", and they also think that a low asking price is really, really important." So you want to "compete" by posting discounts on every piece of new vehicle inventory? And you think that's a winning strategy? If so, I say go for it. Your competitors will love you.... but I repeat myself. Are you selling this as a strategy as Ed is, or used to? Every green pea I ever had working for me wanted to win over consumers by being "reasonable" with them from the start. ANd now we've come full circle to where this is the "new and winning formula?" RE: "Next, your straw man arguments about 'transparency' and 'fairness' are ridiculous. The ONLY person that's used the word transparency is you, and you were also the first person to use the word "fair" in this context. Please don't apply your contrived logic to my argument (where it does not belong) and then refute it." You must have missed the entire discussion as you missed by clear statement about the difference between more information and knowing more. RE: "Summing up: The first problem with the Internet and vehicle pricing is that consumers - who often don't know any better - let price guide their decision making about which dealers to call, which dealers to go visit, etc. It sucks, but it's reality. People who argue for listing inventory online (new or used) at anything other than market price are fools of the highest order." Anyone selling new vehicles who arbitrarily provides discounts on a per vehicle basis is a fool of the highest order. I know plenty of dealers who want their competitors to do just that. But I say, "Go for it if you think its a winning formula." But I repeat myself.

"Anyone selling new vehicles who arbitrarily provides discounts on a per vehicle basis is a fool of the highest order" - David Ruggles I agree. There is nothing 'arbitrary' about the pricing decisions being made by dealers who are SUCCESSFULLY employing these strategies.

Successfully? Arbitrarily discounting your inventory is arbitrary, and it is foolish. But if you think its a winning formula, why not put your own money up for grabs in a deal and see how long you stay with it. Until then, its an abstraction to you. There are a lot of dealers doing a lot of different things. There are dogs of all colors. Seeing one of a certain color doesn't mean they are all the same color. Identifying some that might be surviving using a particular strategy doesn't mean it is a strategy that is viable across all franchises and geographic areas. Take Tammy LeBleu or Greg Rietz, two top performers making real gross. You want to check their websites to see if they list their new inventory with discounted prices? If you want details of success I'll give them to you. Rietz's dealership used to be One Price. Then they decided that wasn't working and tried a variation. A knew owner stopped the One Price/No Negotiation strategy and put the emphasis back on gross profit. Either of these sales people sell more units on their own than a lot of dealerships. Yet, you say consumers are turned off if they can't get what they want at first glimpse, without even asking for it. I know hundreds of sales people like these two. I know a bunch more who left the business when their dealerships went with a voluntary discount on posted inventory, including a friend I sold with 45 years ago who has been making big money for decades while also enjoying some leisure time. You have any $150K sales people selling in stores where they just give the gross away on posted new inventory? I can give you hundreds, if not thousands, making actual gross profit. Again, you claim that one has to give away your so called juicy center is just fabrication. There is no reason one can't get the center, and the highs and lows too. You're giving us a false narrative.

**Arbitrary - based on random choice or personal whim, rather than any reason or system** I stand by my statement that there is nothing nothing arbitrary about the pricing decisions being made by dealers who are SUCCESSFULLY employing these strategies. They make the decisions for a reason and using a system. I'm NOT claiming that "one has to give away your so called juicy center ", simply that you can grow deals in the center (where the vast majority of deals lie) by advertising a more competitive price AND then minimizing negotiation - thereby growing profits, volume, and market share. "One Price" requires a dramatic culture shift and won't be right for every dealership. I don't think it is the best strategy for most dealers. There are as many different strategies as there are dealers; I simply feel the strategy I outlined above is one of the best - and it does NOT involve "One Price". And finally, I too have seen a "bunch of people" leave the business when they couldn't/wouldn't adapt to change - change is hard.

Consider this point of view: The presumption that $150K sales professionals are unwilling to change is not justified from this viewer... What is lost in the math is that dealers adjusting to these proposed transparent sales processes with minimal negotiation band width... also are adjusting their sales pay plans. As more dealers do the same the 20 group and manufacturer comparison costs of sales skew pay plans lower and lower. So the sales professional leaving is based on reduction of pay vs. their unwillingness to adjust to a new sales process. DTG

DTG - I do agree with the idea that some dealership's pay plans haven't kept up with the process changes that they've implemented. And I also agree that those pay plans have sometimes become less transparent for the sales folk because of the "trunk money" and dealer packs that have become mainstays of the business over the past 40 years or so. Mr. Ruggles correctly points out the rebate has been around since 1975. I agree completely that a dealership would be better off designing a pay plan around what they wish achieve today and the processes and strategies that they are going to employ to reach their goals, rather than trying to shoehorn an old pay structure onto a new process - and trying to MAKE it fit - losing employees in the meantime.

That's a refreshingly accurate recap of Saturn history. There's a lot of misinformation about Saturn "failing." It's never a simple story. "Saturn" didn't fail, but obviously the Saturn brand did not survive after a quarter centrury -- 25-some years -- in existence. Saturn dealers didn't fail. Saturn owners didn't fail. Saturn plant workers didn't fail. Saturn management didn't fail. General Motors did fail, and the interrelationships therein led to numerous issues affected Saturn.

Ditto the emphasis on commitment! In 2015, commit to your customer. Commit to her satisfaction, and try to earn her loyalty. Jim Collins wrote a useful book years ago called "Good to Great". A lot can be learned from the book's "comparison companies." One of them, Warner Lambert, was a 7.5 billion dollar multinational drug company. After launching Lipitor in 1997, which achieved $1 billion in sales in the first 12 months, Warner Lambert was unable to remain independent. They were financially too weak to fend off Pfizer's hostile bid, and surrendered in 2000. In my estimation, WL doesn’t exist today because they were committed to a business model that was designed for the 1960s. Commit. But make that commitment to your customers.

Yes, One Price was the reason Saturn failed. When its selling system failed to move the metal at a profit, GM stopped providing the division with hot products, understanding that other divisions would move the metal, keep the plants running, and profits flowing. When Saturn was first introduced, GM lost $1500. on every car. That helped the dealers a lot but didn't do GM any good. They hoped to be able to ratchet up margins, but that didn't work out. Toyota tried One Price in Japan about 12 years ago. I happened to be in Nagano for my yearly visit to a client there and Toyota sent out some of their execs from Nagoya to talk about One Price. I don't recall the exact timing but I believe it was about the time they launched SCION here in the U.S. I had told the SCION people they were barking up the wrong tree and I told the Toyota execs the same thing. I told them One Price would work out just fine as long as they (Toyota) limited their production to be slightly less than market demand. I told them that if they weren't prepared to do that, they should give up the idea. Of course, they were NEVER going to give up market share to Nissan and others by going to such a production model. The idea of dealer inventory buffering works entirely too well given their production philosophy. Shutting down assembly, and starting it back up to carefully balance supply and demand just isn't in the cards. Toyota abandoned their great experiment shortly thereafter, but combined two of their channels, Auto and Vista, into one called Netz. They then introduced Lexus in Japan. Netz was given all of the small low margin cars which have little dealer profit in them even when sold at MSRP. Thus, Toyota was able to claim a One Price victory of sorts. But its all bogus in reality. People keep trying to go back to that well. Go figure. We KNOW some people will buy that way. We also know there aren't enough of them to make for a viable business model in the real world. Wait until Tesla gets to a point where they have more supply than demand and see what happens.

RE: "Who didn’t like it?" GM shareholders. Saturn lost money for GM from the git go. The money that went into that failed experiment could have and should have been poured into Oldsmobile, once GM's most profitable brand.

RE: "The lesson is you need commitment to be successful." The lesson is you need profits to be successful. RE: "But a dealer needs to identify their target market and then commit to their selling process." Why limit yourself? Adopt a strategy that appeals to the most buyers, not just s single niche. If you want to try to appeal to a single niche, go for it. Skinny down your expenses so you can make money on the reduced volume and profit. Then be prepared to explain to your OEM why you aren't penetrating your market when it comes time to re-up on your sales and service agreement.

David - Committing to a selling process will mean that you won't necessarily be all things to all people, but I will remind you that the bell curve exists and by embracing the "fat, juicy center", you will sell more cars and penetrate more of your market. https://dl.dropboxusercontent.com/u/76554925/534xNxbell-curve-chart-web-img.png.pagespeed.ic.dLn7sZh0sQ.png

@ Chris - You have nailed it. It is the sales person who has received the shit end of the stick, which is why we have run so much talent out of our business and why most customers are meeting their sales person for the first time, the major reason for consumer dissatisfaction. It takes gross profit to compensate sales people. We have all of these people trying to overhaul auto retail while missing the 800 pound elephant in the room. Ours is a business of relationships. @ Ed - You seem to have a lack of understanding of good sales process. You seem to make false choices. You don't have to abandon your "fat juicy center" to also get those on either end. Who told you that? On our best day we only close 30% anyway. Why limit yourself. The so called "Bell Curve" is another false analogy. Try looking at the business from the concept of the total deal. Sometimes the fattest deals start off with the skinniest up front gross profit. These are the deals your process turns away "to maintain the credibility of your process." And the deals that make it possible to take some skinny deals to penetrate the market and gain the F&I turn? You don't get those because you are afraid to ask for them. You turn those fat deals into average deals and think you'll make it up in volume.

David - When you start every negotiation at MSRP in order to hit a possible "Home Run", you first must understand the fat deals that you pine for are increasingly rare in the Internet age, you will see fewer and fewer of the customers that will put up with what they see as a traditional dealer runaround. You then end up with the extremes; a few fat deals and all the grinders you can handle. The "fat juicy center" will avoid your dealership.

Who says you start every deal at MSRP? You might some higher? You need to get a better process. Inartful negotiation by green peas is just that, inartful negotiation. Just because you can't do it right doesn't mean you have to take the lazy person's way out. Work on your process. Keep your good people. You can't do that with a bunch of mini deals. Just because you don't know how to do it doesn't mean others don't.

@David - I, too, miss the days before the Internet. The days when you could start a negotiation above MSRP. The days when you could pull traffic with loss-leader "ad car" in the newspaper. The days when the dealer and the salesman had all the knowledge and all the control. Those were some fun days. Unfortunately, if you continue you to play those same games today, you damage your store's reputation - both online and off. With a bad reputation, it will take more than a big inflatable gorilla on the roof to bring people in off the street.

I'd add another problem to your list - it's not "on demand." If someone is researching an auto purchase, are they going to set a reminder to attend your free periscope Q&A where you take questions about your inventory? Seems unlikely. However, integrating this system into web chat is logical, especially if the prospect is serious. But that's not a 'game changing' implementation, is it? :)

Correct Jason! Google Hangouts has much broader adoption and they provide two way video. Seems to me that has more potential - but still not a game-changer.

I've found that these live-video-streaming-apps are good for Conferences, Concerts, Sporting Events, stuff like that. Great Insights, Ed! :-)

I see Periscope and Meerkat as great complimentary apps to your marketing efforts. For example we're the main sponsor of an outdoor summer concert series at a local park. We'll be live streaming each show for anyone who cares to check it out. Just looking to use our available resources to build stronger connections with our community. Nothing more, nothing less. PS. I love the QR code analogy @Ed. I was ALL over QR codes when I first ran across them back in 2010. Started slapping those bad boys on everything I could. Oh well...you live and learn :)

Stick a fork in Meercat as a livestreaming service - it's dead... http://recode.net/2016/03/04/meerkat-is-ditching-the-livestream-and-chasing-a-video-social-network-instead/

Wow, from talk of the town to this ain't gonna work in less than a year. Thanks for sharing the link Ed, it's an interesting look into the live video streaming space.

The future will include live video interactions throughout the sales and marketing processes. Are Meerkat and Periscope the platform to make that happen.... probably not. Totally agree with the QR comparison. For now, Hangouts is the best option, but other players like Facebook, Apple and Twitter have a foot in the game and may come up with the right solution for live video that easily adapts for wide adoption.  

Great conversation!

These tools were never built for brands or businesses. We try and act like there is a business need/case to use them which I find silly. It's not so much that "Live Streaming" is the future. It's never not been the future in my opinion. We just lacked the ability to do it because of.. well, technology. 

We have to stop assuming we can integrate a strategy with these services and instead try and recruite talent (yes i am talking about vine stars, snapchat stars, etc.) and find ways to incorporate our brands into their celebrity. 

First let me say I am not attacking the study... In fact I agree with ALL of it... BUT the study has NOTHING to do with mobile marketing! It has to do with how customers USE their smartphones in a purchase situation and how retailers need to help them make better choices by allowing them to access rich information using all screens... whatever they want AND I COULDN'T AGREE WITH THAT MORE! HOWEVER.... When it comes to buying clicks, placing display banners the conventional forms of online marketing and mobile for the car business at this time these channels are the last channels in the budget you should be putting money towards. The context of the customer is not in a mode that the dealership can or should engage with the customer when they are truly mobile (Small Screen smartphone device). They are usually: 1. Looking for quick information on the go in which your chances of getting a click or even influencing are low. 2. Showrooming in which if they do click you ad all you are going to do is lower the gross profit for the store they are at. 3. Looking for your dealership number or directions which they will find just as easy organically (Just make sure you have a mobile site so that it is easy to get that info) So to sum up... Using mobile to enhance your customers shopping experience.... WAY GOOD! Using mobile as a online marketing channel... LAST THING YOU SHOULD BE DOING!

You and I have very different definitions of "Mobile Marketing" Larry. I use my smartphone almost everyday to help me shop for something. I don't think I've EVER clicked on paid link or display ad on my phone. So if your definition of "Mobile Marketing" is limited to PPC > a landing page > form fill lead, then I agree, that is stupid.

I am with Larry on this topic. And while a mobile marketing strategy is important it needs to work and integrate with a broad, focused ad program for the dealers. Too often dealers don't think about their mobile presence on the small screen.

Fair enough Mark. A question: do you consider a dealer's mobile website to be a part of their "Mobile Marketing"?

Great stat about the importance of combined visits Ed! It's not enough for a dealer's website to be responsive, functioning properly on all devices. It also needs to function across devices. The "Send to Mobile" feature on SRPs and VDPs is essential for shoppers who think they've found the right vehicle from a desktop computer but need to have it on their mobile device when meeting up with their significant other. Most cars are not purchased by a single individual, and mobile has changed how they come together around the vehicle and store information online.

Ed Brooks ?: So do you consider a dealer's mobile website to be a part of their "Mobile Marketing"? In that mobile marketing via ads, social media posts, etc links to the dealers website or a VDP page; mobile users will certainly click and see the mobile version of a dealers site/page, so it has to be mobile friendly, but also give the visitor ability to EASILY click over the the desktop version if on a tablet. In that the dealer's mobile site is a "door" to the dealership showroom, it's got to be a friendly door that is easy to open for everyone. Too much crap on the door will make visitors look for another door to open.

Mark - I'd suggest that dealers view Mobile, Tablets, and Desktop as 3 distinct platforms (just like Google sees them as different). If you have a Responsive website, it will "re-configure" itself to display the same content regardless of the device - it's considered to be "Device Agnostic". Adaptive websites are designed for the device and can provide content tailored to the device. If you feel that your customers have different priorities - have different needs - based on the device, Adaptive may be the way to go.

Mobile will be the future, glass and touch will be right beside it. Meaning, that clunky thing that sits on everyone's desk with a keyboard and tower... won't be there in time. I believe if you want to stay on top, and be ahead of the curve, make mobile a priority. Explore all aspects and find out where you make gains. As devices become more intuitive consumer experience will be mobile and mobile only. It might be on your head, on your wrist, in your pocket or briefcase.. but it won't be plugged into a wall on your desk. (Unless it's charging)

Totally agree with Ed Brooks! Adaptive is how we actually design especially when you are dealing with functionality rather than just content. As half the leads we generate come from mobile, our experience is first hand, not based on survey data. -Tarry

Yes, your answer is Smart Insights http://www.smartinsights.com/digital-marketing-strategy/

I think an important point that has not been mentioned is personalization, and I will qualify this point with I do not know if the technology solutions have advanced this far in the automotive space. The best customer experience will be determined by the sites that have the intelligence through behavioral data to serve up relevant content. This content can look different depending on the device, because people behave different on different devices and often are looking for different content on different devices. The majority of car shoppers are on mobile and desktop around 80% access both so as technology evolves so will the experience.

Ed, this is a great observation. In the best of all worlds, consumers wouldn't turn to TrueCar to purchase a car. TrueCar cleaned up its advertising some time ago so the real gripe from (some) dealers is the cost. When we, as dealers, reach the level of trust that TrueCar has with consumers, we will bypass them in direct contacts and not pay the middleman's price. We are getting there but the complainers are usually the worst offenders and the slowpokes holding back the industry in consumer's minds.

Tom – "When we, as dealers, reach the level of trust that TrueCar has with consumers, we will bypass them..." I understand that is the wish for many dealers, but I ask you; is that an obtainable goal? You can't SEO your way into credibility. You can't PPC your way into trustworthiness. And most dealerships aren't even starting from level ground, they are starting in a hole that was dug over decades. From my perspective, TrueCar isn't selling leads, they are lending – no, leasing – their credibility to dealers. For that subset of customers that doesn't want to negotiate, the credibility and validity of the price is much more important than obtaining the lowest possible price. Building trust is a really difficult thing and doubly so when you are only selling to the customer every 3 or 4 years. Some dealers can do it. For many, perhaps most, it is a bit of a pipe dream.

First we have to acknowledge a few realities: 1) People will follow the path of least resistance 2) Managers will work their pay plans (bonuses for volume) 3) The majority of dealers will look for the easiest and most cost effective solution to address a problem a. Most often they treat the symptom and do not work to provide the cure to the problem In the case of TrueCar, dealers want "leads." Here are the dealers' options: 1) A dealer can spend more money to hire and properly train the right people, provide a great work environment to retain those folks, and then make them accountable for providing a great customer experience. a. This takes time, money, and a commitment to improve the business culture. b. While initially this may not be the most cost effective avenue to take; in the long run it will pay big dividends and save $50k annually in employee turn over costs 2) Or they can buy leads from TrueCar for $299 to $399 each. Which path did 9,000 auto dealers take?

Mark - I don't think of TrueCar being in the "Lead selling" business, I think of them as being in the "Price Validation" business. Most (not all) car dealers don't have enough credibility on price to appeal to the "no negotiation" customer.

Ed - Doesn't matter what you or i think. If you ask a dealer why they sign up with TrueCar, they will tell you its for the leads. They want more buyers in the door. Yes, the "hook" for the consumer is a "price on the car" and that's what generates the lead for the dealer. TrueCar makes no profit by providing a price validation. They make money when consumers purchase. Auto dealer advertising and marketing all focuses on price so they have effectively taught every consumer to focus primarily on price. Auto dealers have been very successful in training their customers to ask about price first. When they change their advertising the conversation will change.

Mark -I don't think most TrueCar shoppers are focused on getting the absolute best, "rock bottom", price. They want an easier, negotiation free, experience. For them, that is the primary goal. In order to have that negotiation free experience, they need a price that they can have faith in - and that is where TrueCar comes in.But you are 100% correct - dealers want more buyers thru the door.

Great stuff Ed, Mark, and Tom. Please allow me to throw my slant into the mix. I have nothing against TrueCar per say, but Cost per Action models generally have attribution problems. I think that is what will eventually shut this model down. The cost is not $299 per sale or $399 per used vehicle sold. It is $299 or $399 per vehicle touched. It does not matter how much or how little TrueCar contributed to the sale of the vehicle, if TrueCar touched the customer and the vehicle sells for any reason the dealer is going to pay. When the numerator is all the money paid to TrueCar, and the denominator is the cars sold that would not have sold without TrueCar, only then does the dealer know their true cost per sale. It can be astronomical. Before one even gets to the gross margin or the cultural clash, the true cost per sale is a huge hurdle to get over. And I'm going to agree with all of you before you even say it; it is impossible to believe those 9,000 dealers are all doing the math.

Dennis - I could be wrong but I don't think it's "per customer touched", rather it's only if a Price Certificate is delivered to this customer. Maybe more importantly it would be wrong to think the total advertising cost for this sale is only the $299 TrueCar cost - a dealer's ongoing branding efforts will come into a play, inflating the cost for this sale.

Ed, You bring up an interesting thesis. When you test this thesis you will find that it is very hard to know just how many online/offline influences made a consumer submit a lead form or call any single dealership. Dealers and vendors have very limited insights into the customer shopping journey; everyone has a piece. I am sure that you have heard dealers say that their websites produce "first party leads" but that statement only works in some alternate reality that is not on planet earth. Leads submitted on a dealership's website are not sold to others, indeed, but it does not mean that the consumer did not submit a lead elsewhere nor did they only interact with the dealer's SEO/SEM advertisement. Until we have a better way to track customer engagement, any testing will be tainted by the many influences that can not be seen by any one vendor. Companies like Cox Automotive are building a network of web properties (Autotrader.com, KBB.com, MakeMyDeal.com, Manheim, etc.) to track the consumer journey, which will provide some insights. However, at best, the Cox family of properties will only track a small percentage of online influences. So, before invest time testing the success of different classes of leads, which will be guesses at best, let's focus on answering the phone properly and responding to all leads professionally. That will ensure that we maximize all sales opportunities whether we think they are grinders, liars, saints, or sinners.

Good point on the phone Brian, but you will also want to work on getting all your leads, no matter where they came from, to your site so they can get to know you. Get them to like your Facebook page and follow you on Twitter to get to know the store. I always wondered why more dealers don't ask for a "Like" or "Follow" in their follow up email templates to help build that relationship with these "fresh internet leads" they you are referring to Ed that are just shopping from SEO/PPC campaigns or anywhere else. If a dealer is good at social and builds a good story about their store on their social media sites that relationship can be built a lot easier. Then lets see what happens to the closing percentage!!

I agree with Brian, all leads should be worked regardless of origin or quality score. However, Ed's hypothesis is important and has many implications. A corollary would be conversion rate. If those who come to the site directly or through organic searches including the dealer's name convert at a higher rate than the average visitor through paid search, then it stands to reason that the dealer who is more aggressive with their online marketing will have a lower conversion ratio than the dealer doing nothing to drive traffic to the site (controlling for the quality of the site, vehicle pricing, merchandising, etc.) There may be a difference in both the conversion rate to leads and the close rate of leads; one one may offset the other. It may be possible to lower a dealer's average conversion ratio by aggressively attracting more site visitors, yet making a substantial marginal profit from the addition of paid search. The impact of the new activity needs to be looked at in terms of marginal cost and marginal gain. This can also lead to vendors pointing fingers, the website provider says the additional traffic is poor and the digital marketing provider says the site is poor. A good argument for having the same provider for both. Even more importantly, are these the leads the dealer really needs? A great digital marketing firm will work with the data and the dealer to determine which vehicles require the most exposure. The best value in leads may not be the highest close rate or the lowest cost per lead. Low-cost, high-closing leads for vehicles that are hard to stock and sell in 30 days without leads is not necessarily something to be proud of. Does PPC traffic convert at a higher or lower rate for your website? Do those leads close at a higher rate? Does one group of visitors contribute to walk-in traffic at a higher rate? Does one variable offset the others or Is it a compounded tragedy? Is the marginal benefit sufficient to justify the opportunity cost? The answers will vary based on the quality of the website, the dealer's reputation, pricing, inventory, and other variables. While it may seem like there is a lot here that is not known, it can all be tested with a higher degree of certainty than just about any other form of marketing. There is also some common sense that needs to be put into play here as well. Many dealer's websites are so poor and their vehicle merchandising so scant that just about any effort to drive additional traffic to it would be pointless. Third-party sites don't deliver as much value as possible when they link shoppers to a poor website experience, and some manufacturer mandated or certified sites fall into this category. If the customer does not already have a sufficient preference for the dealer it certainly will not be enhanced with a trickle-poor website. Over time, the base of customers for these dealers will dwindle to the point it is impossible to make the online investments necessary to compete. Today, it's very hard to help a franchised dealer selling 35 cars per month, unless they are willing to over invest and grow to a point that truly scales. Sometimes it makes sense to take action even as you gather the facts needed to take better action. Great topic Ed, as always!

Thanks for all of the input folks - I love a good conversation! I'm not suggesting that any dealer should treat any lead as a "second class citizen". In the short-term, EVERY lead needs to be responded to professionally and worked diligently. As a long-term strategy, I think paying more attention to reputation and branding (and perhaps investing some additional money) will pay dividends. I think we all agree that the customers that have some affinity for you, the folks that you've earned some trust with, close at a higher rate and are probably more profitable. Nurturing that affinity needs to be a priority. So, maybe, rather than chasing "fresh" leads through PPC you can find the "Glengarry Leads" in your own existing customer base.

Ed, I looked at this when I was eComm for a 3-store group. First, to the point of not knowing the route customers actually take, I agree--however, take a look at your Google Analytics to see how the site visits are created. Very often (to a great degree, to my own experience), shoppers either type the dealer's name into search or type the actual domain name. You can't assume that's their first step, that they know you, or what, as they could've just seen your name on a 3rd-party sites' inventory a week earlier and now are coming to you directly. From visits to leads, some of the logic still applies--but choosing to submit a lead on your dealer site is a higher commitment to YOU specifically. And it that commitment, I found, that made the lead closing higher. You were SELECTED at a higher interest than 3rd party leads and/or 3rd party inventory sites. In other words, to borrow your point, you became KNOWN to them as a direct choice, and they took it. Great point, by the way. :) Thanks.

Ed I'm surprised that you didn't bring up the impact of market pricing and VDP content overall and the impact of visit conversion. On all other accounts I think everyone has made valid points. Well done Ed.

Jeff - you know how important I think having the right car with the right price, along with outstanding photos and compelling comments, is to selling cars today. But unless you are advertising the car differently on your website compared to the other outlets (different price, different pictures, etc.), I don't think this is a factor in this discussion. Do you see many dealers advertising different pricing on different sites?

I agree with the above points - I also think you should respond differently to leads that come from your website directly as opposed to those who come from a provider/classified website.

I know a great article when I see one!

Only Ed would make this reference. But great post nonetheless! :-)

I referenced a VERY famous quote from court history ;-) Thank you very much!

Why is a name and an email or phone number too much to ask? If you'd like a price I can certainly provide it for you with your fake name, fake phone number and dummy pricing email account. That's definitely transparent.

Imagine selling your house and refusing to divulge an asking price unless you got all their contact info.

I'm not saying don't provide a price. Always answer the questions of the client. I'm saying transparency should work both ways. Be upfront with me about what you're trying to accomplish and I can provide accurate information in an efficient manner.

The customer hold all the cards. They don't care if you want transparency from them. The one that makes it easiest for them to get what they want will get their business. As per this discussion: http://www.drivingsales.com/blogs/mpiworldclass/2015/01/29/is-going-above--beyond-really-path-to-customer-loyalty?utm_medium=email&utm_source=CUNL-1-30-15&utm_campaign=CUNL_013015

Nice write-up Ed. Agreed with the group sans Mr. Niven (without judgment.) If there's a price for the information, it's not transparent. This from 8 years experience in a truly transparent environment. Our lowest, non-negotiable prices, new and used, are posted clearly on our website. We have no finance managers so our salespeople handle everything from drive-up to delivery. In advance of the haters: Yes we run over a grand in back-end and yes we sell 300+ a month. We turn the screens towards the guest while running numbers. We put up our best trade-in offer, ACV, right up front. No games or gimmicks and we pay our folks really well. It takes a ton of work but, speaking as the brand retention leader in our zone, we think it's worth it.

Exactly how we roll Paul. 13 years running, volume leader by a mile, Just shy of 500 in January... Customers seem to dig it.

We put our discounted prices on-line as well. I think to be competitive in today's marketplace you have to. "Call For Price" is sooooo 2006 :-)

Before the customer ever steps foot in the store, all they want to know is "Do you have what I want and how much is it going to cost?". If you can't or wont answer this question. They will most definitely go elsewhere. Answer their questions without hesitation. Don't try to control the sale online. Get them in the store, and then make a car deal.

Ed, There are plenty of other verticals where information is required before getting pricing. For example, many technology and software companies also require you enter information for trial versions of software or to discuss package pricing. The automotive industry isn't the only vertical where prospective clients are asked for information before getting pricing. That being said I think the transparency needs to begin after the initial collection. If your form gives the customer the perception they are requesting a price quote, then you should be willing to provide that information. If not you have already confirmed the customer's fears that you have something to hide.

@Brian - I can't think of a reputable B2C software company or reseller that isn't crystal clear and upfront about their pricing. If wanted to go buy a copy of Microsoft Office, it's for sale right now at Staples for $219.99. If I wanted to download a trial version of Adobe Photoshop (think of this as an extended test drive), I would have to part with some info before I "drove off with the car" - BUT they let me know, upfront, that the plan costs $9.99 a month. Additionally, I think that focusing on the "form-fill lead" customer is huge mistake. The majority of shoppers show up on your doorstep, after doing extensive research, without ever submitting a lead. If you don't show your pricing, you might gain a few suspects, while basically telling the majority of your shoppers, "don't bother".

@Ed - I agree that most b2c software is set up that way, I was referring to b2b where volume and server licenses apply. My point was that you need to do what your form suggest you are going to do, regardless of what form you use. As an aside, I'm in the complete transparency camp. So much so that we (ELEAD1ONE) were showcasing our Deal Builder product at NADA that allows a customer to walk themselves all the way through financing a real car deal from the comfort of their couch. Thanks for the post, and reply.

Research indicates that on average, new car shoppers/buyers will visit three to four dealer websites. Over 1/3 will submit an online request. Over 90% of these requests are for pricing information. You can't avoid answering their question without risking the loss of the opportunity.

Even with the new "transnational" process, there is still an equal need to communicate with the customer. So the leads are not going away, simply (in time) changing.

Robert - I think, if dealers give customers a good reason to reach out, digital interactions and communications will increase, not decrease. One issue is that many dealerships aren't nearly as comfortable interacting digitally -- with the exception of their Internet Departments. Getting the showroom and the digital side more closely aligned will be the challenge. Dealers will have to move beyond a 'just get em in' to the showroom mind-set.

I don't disagree. My thought was, even transnational leads will require contact. If the customer clicks "buy now", there surely is a immediate phone call to ensure satisfaction, discuss details, and possibly up-sell as well. Transnational leads will vastly move into the chat category however, as picking up the phone during an online transnational process is too disjointed.

What we find is that when you give customers what they want, when they want it, 24/7/365, your 1st party leads will double & triple. We cost effectively capture & convert more online shoppers and deliver those shoppers the information they want Immediatley. As a customer I could be on 2 or 3 different dealers websites and find 2 or 3 different cars I want to buy, BUT I might not engage with any of those Dealers website forms. With our tools, your dealership could be the only one they contact because we give them a reason to contact you.. Good luck to you all and a prosperous 2015. Tony @ Automark Solutions

@Tony - I watched the video on your website. Unfortunately this is exactly the sort of 'Lead Gen' that the big boys are moving away from. The idea of withholding pricing information until the customer is willing to share complete contact information is anathema to operations like Sonic or AutoNation. The linchpin of their new strategies is clear, transparent, upfront pricing. But I wish you well.

@Robert - I think a key for dealers is to be very comfortable communicating with customers in whatever format the customer chooses, whether it be chat, phone, email, etc. It's all about being customer-centric.

Great article, @Ed. Another thing to consider is the actual content on the website. If the website doesn't provide the information the customer is looking for (price(s), actual photos of the vehicle, real video walkarounds, detailed description, full list of features and options, etc.), it doesn't matter what kind of call to action buttons are placed on the site. Shoppers have too many online resources available to them. If they don't find the info they are looking for on your site, they will simply move on until they do find it.

Hi Ed, while we also have a "form" for a customer to engage with, the idea of course is to capture & convert the lead so now the dealer has someone to contact and build rapport with. I do agree with you that some dealers are trying different methods to differentiate themselves but if they give away price without capturing a lead, then its very easy for me as a customer to make a phone call and potentially beat that price so we integrate our Instant Pricing with a warm friendly transparent experience that allows the customer to take themselves down the buying funnel. We also have alot of the "big boys" that we partner with, and they have doubled their 1st party leads while being transparent and of course, transparency breeds trust. BTW, thanks so much for taking the time to view our video and I love this site and its content. Keep up the great work!!!

@Tony - I would never spite someone for trying to sell something and I wouldn't ask these questions on a post of yours. But since you're here trying to sell on this post, two questions; 1.) What's in it for the customer? (I fully understand what's in it for the dealer). 2.) What are you 'converting' them from? What are you 'converting' them to?

@Adam - You are so right! If you lack correct pricing, great photos, excellent video, quality seller's notes, you have very little right to expect that the customer would be ready to move forward to the transaction. Everything in these strategies is designed to help the customer move forward -- the job of the dealer is to remove the roadblocks to the deal.

Hi Ed,-To answer your questions and maybe the response to your 1st question will possibly answer the 2nd: 1.) What's in it for the customer? (I fully understand what's in it for the dealer). We know that today, customers want instant gratification and transparency when shopping online and if they dont find what they are looking for, i.e., they bounce to a competitors site or google search or True Car etc etc. so we have reversed engineered a suite of converters that we strategically & seamlessly embed on a Dealers website (regardless of platform) that give the consumer the ability to get an Instant Price Quote or Instant Lease Quote Immediately on all cars in inventory 24/7. Bottom line is most dealers are only capturing 1-3% of the amount of visitors to their websites, with our tools, we see an increase of 2-4% which can be a significant lift in internet sales while providing a friendly transparent experience for the consumer....I hope this answers your questions Ed

@Tony - "I hope this answers your questions Ed" Not even close, but it is good advertisement ;-) It seems "transparency" has lost all meaning...

I think everyone make great points and I can definitely see the value in customer experience digitally. I've been involved in internet sales for over 10 yrs and have studied their behavior and habits it keeps changing constantly so lets communicate in the world of our customers who is truly our bosses due to the fact they pay our bills.

Form "Leads" are NOT going anywhere and won't go anywhere anytime soon. Most dealerships and vendors alike view a form lead ass backwards. They shouldn't be considered a lead and you force them into a process; it's a potential customer initiating contact with the dealership. Customers see form submissions as a convenient way to start an email conversation, nothing more, nothing less. They don't know they're injecting themselves into dozens of phone calls per week, and 120-150+ days of email follow-ups. The more dealership understand that it's convenient method of contact - either they're at work, they don't like getting bombarded with calls, or they're simply in research phase of their buying process. Dealerships must use an adaptative follow up process that follows the timeline and what the customer was seeking. Was the customer trying to get more information about a car (starting research)? Seeing it's available (deeper in process)? Or scheduling an appointment (ready to buy).

Here is a tough question: Do you want leads at all, or, are pay plans and vendor contracts pushing leads? Ideally the best case scenario is the customer buys the car. If you have provided ALL the information, they have no need to contact you. They just, buy the car. So are more leads a good sign, or are they a sign you are not providing enough information. Furthermore, how many leads are artificially created to sustain monetary compensation in one form or another?

Very interesting opinions.... I talk to many dealers across the country and what they tell me is that Leads submitted by customers on their Vehicle display pages are the number 1 leads they can get their hands on because they close at the highest closing ratio so I tend to agree that Form Leads are not going anywhere anytime soon. NOW, the amount and quality of leads depends on what information the Dealers serve up. In todays landscape, Im a big proponent of transparency but I dont agree in giving up price without something in return from the consumer i.e., name & contact info

Great question Robert! The goal is to move metal and make money, and leads aren't a prerequisite to making a sale. Different dealers have different strategies on how to achieve that goal. Some dealers will follow Tony's strategy of withholding information in return for something from the consumer -- a quid pro quo, if you will. Other dealers choose to freely provide as much information as possible, in the mold of Sonic, AutoNation, and CarMax. I do feel the dealers that have adapted the former strategy will see more customers that like to negotiate - work one dealer against the other - the grinders. While the dealers that have adapted the latter strategy will see more customers that will buy without the negotiation. I was on a webinar the other day that featured a dealer that uses up-front pricing. He is closing over 70% of his deals without negotiation and when he does negotiate, it is minimal. So, different strokes for different folks!

The traditional email lead is not going anywhere. AutoNation, Sonic and CarMax are not the industry standard that others mimic to be successful, and I have seen very few dealerships follow their lead. It's just not the most practical or profitable way to do business. If you want to look at a business model that works, just check out Dan Cummins Chevrolet in Paris, Ky (a small farm town of 20,000) where they sell between 500-600 units each and every month. That is a more realistic business model at this point in the automotive industry. It works well for the customer and still allows the dealer to make a comfortable profit. It may evolve into what you describe as a transactional web presence one day, but that is in the very distant future. It won't happen anytime soon on a large scale. Dealers as a whole have actually done a pretty good job of giving the customer some space, while giving up some control to allow the customer to complete around 60% of the buying process on their own. I expect it to remain about the same for the foreseeable future. Traditional email leads are still very much alive and well.

I do honestly believe that the "Get more info" traditional email lead will go away in the near future for many dealers, maybe not this year, but soon. It will be replaced with very highly targeted 'calls to action' that move the consumer closer to the transaction. Looking at Dan Cummins Chevrolet, they have already moved to a much more transactional web presence than most. Where many old school dealers would have a big "Get more info" button, they have placed a big green "Create Your Deal" Shop-Click-Drive button on the SRP and the VDPs. They have a prominent ATC Trade-In Marketplace box in the center of their homepage. All of this, combined with their up-front, pre-discounted pricing, is moving them closer to true eCommerce. It is a pretty impressive web presence!

I agree that the old school ways have seen their better days, but I think the middle of the road dealers such as Dan Cummins business model are what most of the other dealers are comfortable with at this time. There is no doubt that in time it will further evolve and eventually customers will complete nearly all of the buying process on their own. You have some great points. Most dealers just aren't ready to go that route.. Yet!

@Dennis - Just looking at the website tools they are already providing to their shoppers - combined with the their pricing structure - Dan Cummins looks to be way closer to 'bleeding edge' than 'old school'. If this is what middle-of-the-road looks like in your neck of the woods, I'm impressed! Just think of the website functionality they'll add in the coming year. They don't look to be a dealership that would be content to stop progressing!

@Ed - They are a very forward thinking organization, but they are still a little old fashioned in some ways. I have seen many others that are much closer to the transactional web presence than what Dan Cummins is now, but you are right in saying they won't stop. They will more than likely be the first in the state of Ky to have a purely transactional web presence when the time is right. They are the standard most dealerships in my region look to in order to evolve. What you see now is all fairly new, and has been implemented in the past 1 1/2 - 2 years. They were selling less than 200 cars a month 2 1/2 - 3 years ago, and now they sell 600+ fairly regularly, so they have come a long long way. They want to sell an additional 1000+ units this year compared to last year. I have several close friends who sold cars for me or I have worked with in the past that are a part of that organization currently. They have Big Plans!

Pet Peeve, Hello! I'm interested in the 2012 Mercedes-Benz you have listed on Cars.com for $25,995. I would like to know more about this vehicle. -- If you wanted my business, you'd have all the info I needed to know about this vehicle. Screw you if you don't. I am a visual learner and an analytical millennial who researches over and over. Once I make the decision, I have to make a buying decision. I know, that if it doesn't happen within a few hours of the initial decision to buy, I will second think and back out. I will not contact you if you do not have the information I am looking for. I will move to the next guy who does. Content is king. Example, I am looking for an 7 passenger Acadia and not a 8 passenger Acadia all you dealers without Bucket Seats listed or even 7 passenger commented in the detail notes I'm moving on. Lot of you get missed. 2015 and beyond, all that is needed is a "BUY IT NOW". We can worry about the actual purchase once the decision is made. As a dealer side, all I really care about is the guy ready to do it now on the exact vehicle they want. IMHO Sales Process on the lot. Meet and Greet Fact Find Demo Vehicle Writeup Close Sales Process on the internet Fact Find - Individual Research. Meet and Greet - Reads Dealership Info and Develops and an Idea of the dealership. Close - Makes an individual buying decision. Writeup - Dealer finalizes paperwork with communication. Demo - Delivery.

Love this thread, lots of great points from everyone. Tyler well said, highly agree. Transparency will win in the end. Remember when Travel websites finally were forced into "ALL IN PRICING"? Meaning that the price you see is the price you will pay... That made our lives as travellers much easier. Now-a-days, lets say you stumble across a travel site with no pricing, you are moving on FOR SURE! I know the car buying experience is much different from purchasing a flight, but I truly believe the research tactics fall under the same category. That category is called TRUST. Here is my opinion, build consumer trust in your brand, doing whatever it takes, the sales will follow... naturally. I don't believe leads will ever disappear. Leads are just a form of communication, it just so happens that person is in market for a vehicle so we as dealers see them as a target and call the communication a lead! That being said, the way we deal with leads is crucial to the success of closing the deal. This goes back to building trust, if you don't trust the customer, you can bet that they don't trust you! They should buy off of you because they WANT TO. Think about it this way... if they are just getting a price to SHOP YOU, DONT WORRY, chances are they weren't going to buy from you anyway!

I would disagree about leads going away. There are many examples of industries turning the customer into self-serving consumers. Apple is a great example. They made it so difficult to communicate with them online, that people just avoid it and go to the store or buy online. Travel is another example, the avg consumer just figures it out themselves and buys online. The only reason leads exist, is because all of the customers questions haven't been answered before they asked.

I think the biggest takeaway is the contrast of comfort and control the consumer enjoys online.The culture in far too many stores as mentioned is the sell me rather than help me buy attitude and approach. Well done Stard!

I was one of the pioneers of selling in the internet department. I started with Autonation in 1998. I found that sending price quotes with options creating more success for me. In fact I was closing 10% plus every month. Customers want price first without the hassle. That my friends will never change.

Well done, Ed! Not sure about the percentages, but I agree with the message. There are great opportunities available for some, while others flee the current Facebook platform.

Google "Facebook Organic Reach" and you'll see more studies devoted to this topic other than the one from ATC. One recent article quoted Mark Zuckerburg himself as saying "We optimize for users, not businesses" http://marketingland.com/mark-zuckerberg-facebook-town-hall-107096 With a 2% organic reach, as the Forrester report states, and is on the money from what I see with our pages, it is no longer a ROI equation, but ROE, return on effort. A lot of work is going into posts that no one sees.

Facebook posts are not meant to reach new customers, that is what ads are for. Honestly, in my opinion, the biggest point of a store's actual Facebook page is to interact with current customers.

Bingo Dara! Here were my comments on a post in DealerRefresh's forum dated Jan 15, 2010 - Every great salesman I ever worked with back in the "olden days" kept 2 boxes of cards under or in their desk. One was filled with greeting cards, the other was a tickler file of customer's dates: birthdays, wedding anniversaries, the anniversary of their last car purchase, etc. No one ever expected the card they sent on a Monday to sell them a car on Saturday. They did expect to stay top-of-mind with their customers, maybe get a referral or two and have a better than average shot in a year, 3 years or 5 years when their customer was ready for a new vehicle. I'd submit that Social Media is the equivalent of those greeting cards. The ROI won't be measured in days, weeks or months, but rather in years. Is it worth the time? Every dealer has to be the judge of that for themselves. But I'll repeat, every great salesman, back in the day, kept in touch, developed an on-going relationship, built trust and a referral business. Even if the medium is different today, why can't we do the same thing?

I wrote about this in the latest edition of Dealership Innovation Guide: http://drivingsalesinnovationguide.com/2014/10/the-hard-truth/

Thanks for your (great) insights, Robert! My main take-away is that a dealer has to be willing to Pay-To-Play *AND* they need to know what they are doing.

Exactly!

Building relationships on Facebook has always been the key and one of the best ways to do this is by building social capital. Share information that is important to your local market to demonstrate your community mindedness and pick and choose your self promoting posts. Mix in some paid reach but save that for promotional posts. I actually did a webinar last month on 7 Ways to Use FB Boost Post Button to Promote Your Business. Here's a link if anyone is interested: http://nextgendealer.com/2014/10/09/7-powerful-ways-to-promote-your-business-with-the-facebook-boost-post-button/

Pay to play. Ive been saying it for years! Great post.

I am curious to know from you guys and please take some time before you answer that question to think about it. Why do you have a business Facebook Page?

Advertising / Having a place where a customer can express gratitude or displeasure.

@Chris, A number of very savvy Social Media Marketing experts have contributed to a discussion about this post over on Facebook; https://www.facebook.com/groups/Carbucks/831937860183382 The consensus seems to be that Facebook advertising works (dark posts, etc) and you have to have a business Facebook Page to advertise effectively. But Facebook is strictly Pay-To-Play today.

@ Chris, because it's follow the leader. From everything I've noticed, people don't want to connect with "Any Town Motors", they want to connect with the person/people they met at "Any Town Motors". After all, it's not called "Placebook" it's called "Facebook" right?

Facebook likes money -- therefore, of course they are making it pay to play. It just needs to be done strategically & effectively.

@Robert, your article was awesome! Thanks for sharing: http://drivingsalesinnovationguide.com/2014/10/the-hard-truth/

Yes, but this has been public knowledge for nearly a year, no offense, this is ANCIENT information. Rival site: http://www.automotivedigitalmarketing.com/profiles/blogs/how-your-facebook-page-can-thrive-despite-the-death-of-facebook http://www.forbes.com/sites/ewanspence/2014/06/06/facebook-puts-everyone-on-notice-about-the-death-of-organic-reach/ http://blogs.forrester.com/nate_elliott/14-03-17-facebook_is_still_failing_marketers Comment by Alexander Lau on June 18, 2014 at 11:10am Here's an E-mail I had sent to a colleague a while back (actually, almost two years ago). -----Original Message----- From: Alex Lau Sent: Monday, November 05, 2012 8:50 AM Subject: RE: Custom Audience? Not a bad concept if used correctly. Obviously, it's a ploy by Facebook to sell more ads through customization techniques, which is smarter than what they're doing now. Their business model was or is failing on that level currently, hence the drop in stock price. Investors are saying to themselves, "Yes, Facebook is popular, but so the hell what, what's their business model?" The only thing they have going is their advertising model, so they had to do something like this, IMO. Promote better reception of case specific ads. Organic is going to die and shortly. Etc.,

I'll throw a wrench into this article. Want to know more about your fans and your competition's fans in order to market or re-market to them, contact me? This example alone gave me 4189 potential leads, just for one single page for 'New York Car Dealer'. An upgrade, will also export telephone numbers. Voila! http://api.ning.com/files/MOC7BqAcxPsipd6Ea0KWXTZ*bdHFq62q5QtHSATUpNQLUupJAOKnBqsxPqCY3O6wpm-GyTx2HbiP-qQ8stegVg3Nx-pwbnDj/20140707_142050.jpg

I'm unsure why you haven't mentioned FB's PowerEditor as well. Facebook PowerEditor = reaching out to current and potential customers via Facebook through their timeline and ads. Utilize your current dB's in your CRMs. Facebook PowerEditor It was a matter of time before they integrated this into their system. Basically, it's a matching tool, which they have always had (a weak predecessor), but previously was not built on a CRM integration level (importation of CRM dB's for use in customer matching). Having to match up customers or potential customer manually was a painstaking experience. I'll be interested in seeing how dealerships cope with this new requirement and what CRM's actively support them. Custom audience targeted ads will be much more relevant than ads just targeted to a business fan’s or some biographical demographic. They can reach people who a business is sure purchased its products before, or that haven’t thanks to exclusionary targeting. Yes, businesses could just email these existing customers for free. However, Facebook can help them hone in on certain demographic segments of their customers by overlaying additional targeting parameters, and reach them vividly through the news feed instead of their dry inbox. A car company with email addresses of its customers could target “buy a new SUV” ads to people who bought an SUV 5+ years ago, while targeting “Find nearby charging stations” to those who recently bought an electric vehicle. IMO, it's a ploy by Facebook to sell more ads through customization techniques, which is smarter than what they were doing. It should have better results for dealerships, especially since most of them have a CRM of some type that exports out CSV and/or XML for importation into the Facebook Power Editor.

Good luck with those "Potential Leads", Alexander!

Actually, I've measured those to work, albeit a small %, they have turned into sales. They are no different than the people / leads garnered from organic and paid motions. If that's your only reply, in reference to my detailed comments, wow, go back to the drawing board bro.

http://www.automotivedigitalmarketing.com/forum/topics/adweek-facebook-organic-reach-to-shrink-1-2 http://www.automotivedigitalmarketing.com/profiles/blogs/facebook-confirms-reduced-page-exposure-is-because-your-content Comment by Alexander Lau on April 10, 2014 at 9:06am Yes, but Reach and Like mean squat! The ability to fine tune your marketing efforts using their PowerEditor and Advertising is where everything is going. Organic is DEAD. Comment by Alexander Lau on April 10, 2014 at 6:37am Point of the article, your content sucks. 99% of it. Now, it's pay to play. Don't forget, FB is a publicly traded company. Wake up, everyone. Time to move on...

Far be it for me to argue with a "Automotive Digital Marketing Superhero" ;-)

And yes, the squeeze is getting tighter, "Facebook is cracking down on 'overly promotional' posts from brands" (dated Nov, 14, 2014) http://mashable.com/2014/11/14/facebook-is-cracking-down-on-overly-promotional-posts-from-brands/

He he, I'll take that as a compliment. Again, wasn't trying to be a jerk, just saying this has been around for a while. :-)

The trend has been around for a while. But, please note that the post that I cited from Forrester was dated Nov 17 - so, new. And many dealers are under the mistaken impression that having a Facebook page alone, will yield tangible results. So it bears repeating. I was all set to cut and paste from your company's "Social Media Management" page, but I decided to follow your lead and not be a jerk. :-)

LOL, post away, here you go, it's just generic fluff @ http://www.worlddealer.net/digital-marketing-services/social-media-management. If anyone is interested, they contact our business development crew and we dive much deeper in terms of deliverables. The site ranks through the roof, due to my SEO powers, like ranking 3rd for 'Automotive Content Marketing' @ https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=automotive+content+marketing, etc., etc. ahead of the "giant" boys.

Do you two need someone to moderate in between? :P

No Robert, facts and figures are my game. :-)

If we didn't have to have a page to run ads I don't think I would even have one any more. Think about it this way. Before Targeting was available the only way to get good data about your fans was to have a lot of them so you could then segment and target. Well, what little you could anyways. So now we have the ability to super target, retarget, interest target, target the targets. So in all reality the result of what we do with the data hasn't changed. How we are able to collect it and build campaigns around it certainly has though. There is nothing, I mean nothing out there where you can deploy an email and social ad campaign based on a list of folks that you scrubbed in your crm and then automatically trigger and deploy a 2nd level campaign based on their actions. That's where the real business is happening. IMHO Shopping Malls attract people which in turn attract shoppers. Shoppers are what stores want so they pay higher rent to be in the spot where people go to shop. Yes, you could be the guy that flyers the parking lot during the day but then you're that guy... Pages were cool when they were cool. The export of pages has become so efficient that we really don't need them anymore.

Chris, you're right, but it cannot hurt you to use FB's PowerEditor or Google+ or Google's social advertising system, when running a social advertisement. What do you mean, there is nothing out there, exactly? There are plenty of datasets that can be pushed to social networks, that will enable you to match dBs (versus) in order to help targeting. As you probably know, targeting via Facebook can be as granular as you like. Use that to your advantage. A hyper-targeted audience guarantees cheaper traffic from the audience you're after—users who have visited your website, but have not converted yet, users that are known customers of a certain make and model (new and used), etc., etc. The way to convert the audience you're remarketing to is to have consistent, quality marketing. Customize your message in a way that includes relevant and additional information to what customers already know about your product from visiting your site.

Although, there is a Social Bias, BEWARE!!!! Actually, when I worked at Carnegie Mellon University, I built and maintained a distance education website for Juergen Pfeffer. Carnegie Mellon's Juergen Pfeffer http://www.forbes.com/sites/bridaineparnell/2014/11/27/scientists-warn-about-bias-in-the-facebook-and-twitter-data-used-in-millions-of-studies/ Although social networks seem like a fount of free data, they often have substantial population biases that prevents that data from being extrapolated to the general public. "Instagram, for instance, has special appeal to adults between the ages of 18 and 29, African-Americans, Latinos, women and urban dwellers, while Pinterest is dominated by women between the ages of 25 and 34 with average household incomes of $100,000," Pfeffer and Ruths said. Even worse, social sites use proprietary algorithms to create or filter their data streams, algorithms that they could change at a moment's notice and that the scientists know nothing about. "How can anybody evaluate the results if neither the data nor the exact methods are allowed to be published?" asked Pfeffer. Those lucky enough to get privileged access to this proprietary information, so-called embedded researchers, are creating a divided social media research community, making it difficult to compare competing outcomes or objectively analyse a paper derived from social data.

@ Alexander, that's strong as death and very interesting!

Thanks Chris, agreed dude. :-)

Additionally, it's a matter of time before Google(bot) starts applying these same principles to Facebook advertising as well, whether they deem it as positive or negative. It's a greed game now. Old news thought, but relevant to this thread. "Facebook has seen a dramatic rise in advertising revenue, simply because it’s able to target specific user sets better than anyone else online. If audiences are rapidly becoming the preferred currency of online marketers, Google has to make AdWords conform to this new paradigm." Preparing For A Keywordless SEM World http://www.mediapost.com/publications/article/235593/preparing-for-a-keywordless-sem-world.html

It should be mentioned. If I were a car dealer, I wouldn't go anywhere near Facebook advertising. I would go to LinkedIn and advertise there, through their targeting. Credible people; more money, people with actual jobs. Same model as FB, better results, from the looks of it. HootSuite has a $10 / month LinkedIn plugin that allows for content publishing and advertising. https://www.linkedin.com/static?key=advertising_info

Nice share Alex!

Thanks Robert and great 2015 article. Haven't had the time to respond in an educated manner. Will do, over the holidays, while my 2 year old is crawling on my head. ;-)