DealerKnows Consulting
Price Validation, Deal Badges and What You Need to Do
As shoppers seek more and more information before transacting on a vehicle, it is no wonder that they are inquisitive, not just about the price, but about the deal. Dealers have long displayed a price, but rarely do they justify it with data.
Edmunds has been offering their assessment of “True Market Value” for more than a decade. CarsDirect and, later, TrueCar built their business around, not just sharing the price, but analyzing the price. CarGurus ranks the quality of your online price against competitive vehicles in the area and CarStory Market Reports have been confirming the legitimacy of the deal with a higher level of data insights for a couple of years now.
The survival and now success of these corporations prove that more is better when it comes to building trust with pricing data.
Now Cars.com is in on the mix. With their recently released pricing comparisons and deal badging on your inventory listings, there is one more automotive marketplace helping shoppers determine the quality of your online price. You may not realize it, but this is a good thing. The newest data suggests consumers in the car shopping phase spend roughly 60% of their time on automotive resource sites, and yet they are still surfing across a multitude of different sites, because one site doesn’t have all the information they seek.
They search vehicle reviews on reputable sites. They seek out consumer reviews in online forums. They ask around to ensure they’re choosing the right vehicle, they scour dealership ratings to do business with the right dealership and are going so far as to select their salesperson in advance of a store visit. It is only natural that the price of the product needs to be justified. They’re using all the info the Internet has to offer as a means to prepare themselves for a purchase (that fits their budget and their lifestyle). They’ve always asked “what’s the best deal?” Now they have the data to answer it. As dealers, you must embrace this.
As leads, calls, and walk-in customers flow into your store from these sites, are you using the data they’ve provided your clients to your benefit? Your team must reply back with validation of their data. You can’t say “that’s not
really correct” when confronted with this information because they carry more trust in these sites than they do you at this point. You haven’t earned their trust enough to scowl at that pricing data. Instead, you need to re-confirm it. Your research and subsequent replies must include this information back to them, even if it may be redundant. Let the shopper know you’re on the same page with them regarding the professional reviews your vehicles have garnered. Make sure they’ve seen your dealer ratings. And by all means use these sites as well to justify your pricing. This will help streamline the in-store negotiation time and hopefully deliver a less antagonizing experience for every car buyer.
Just because it is online information doesn’t mean it works against you. Leverage it to your advantage. By showing you’re in-line with the online data, you’ll earn their trust and their business.
Joe Webb is the President of DealerKnows, and Jared Hamilton's very best friend in the whole wide world. When Joe is not maximizing companies' online investments through in-store training, virtual consulting, and the industry's first lead management coaching software, he and Jared stay up late at night and share pillow talk about the industry. Joe has been called "the funniest guy in the car business", but Jared doesn't buy it. Instead, he says "Joe is the sweetest and most heartfelt human being I've ever come across in all of my days."
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5 Comments
Debra Bly
Yankee Ford, Rockland Ford, Tucker Ford, Tucker Chevy
Joe, You are on point with the customer journey and information that they are looking for. I do wish before setting Cars.com as an example you had taken time to review the accuracy of what they are providing. I have found that they are quoting huge values to options that come standard on the vehicles. They also are stating an average price point using local inventory pricing as a gauge when there is none displayed in the graph itself. Can't see your entire image but what I do see shows only regional Toyota Camry inventory. I am very disappointed that Cars.com would use inaccurate information to fill the void, it is not only inaccurate but so much so, customers will begin to feel the industry is being dishonest all over again.
It seems like false advertising when you display only Edge Titanium’s but tell the consumer they have added features that were originally standard on the window sticker. The consumer has more tools than ever to understand a vehicle of interest and how it should be equipped. To display as cars.com is doing showing added feature costs (which are standard window sticker items) may actually insult them.
https://www.cars.com/vehicledetail/detail/712013871/overview/
Titanium, AWD, Handsfree/Bluetooth Integration and 2 other features add $6,050 to the value of this Ford Edge in the Auburn area. Price comparison tool only shows Titanium trim vehicles with all these features standard on the window sticker.
Jacob Wittler
Cars.com
Hey Debra,
Hope all is well in Portland since we last spoke! So I do want to clarify that in the example that you cited, as with our Pricing Contextualization features as a whole, we are looking to provide context on the "why" behind the price. A consumer may not understand what is driving a pricing difference between this particular Edge Titanium and a different trim level of the Edge , or a previous year's edition of the Edge that may not have these features. It's also about the badges telling a story on behalf of the vehicle if the consumer is comparing it to something that may not be on the graph (ie a 2016 Equinox they may be cross shopping). Each scenario is going to be different with lots of considerations, but the important factor is we provide data/context to inform the consumer and build trust.
I always appreciate our customers thinking with a "consumer first" mindset, and the good news is that we've tested with consumers and found that they find this type information very helpful and not misleading. This is helping build the trust for both sides, and as Joe put it you can leverage it to your advantage!
Debra Bly
Yankee Ford, Rockland Ford, Tucker Ford, Tucker Chevy
Thank you Jacob for responding. I do not understand what you are trying to say with the added value of $6,050. They are actually on a VDP of an Edge Titanium that a customer has chosen to review, so the details should state the extra features but not indicate the vehicle is actually worth $6,050 more than the asking price, by saying it has added value of $6050 because of those features. So as you said what is the "Why" behind the added value of $6,050.
Jacob this 2015 Infiniti Q70 https://www.cars.com/vehicledetail/detail/712654877/overview/ Has an advertised price of $36,128 and has a added features options with value of $35,050 what are you trying to say to a customer with that? This is where it gets really hard to believe, we are a Ford dealer and with the F-150 similar situations are showing up.
Jacob Wittler
Cars.com
Hey Debra, Christine and I will connect with you off thread to discuss. Certain we can address all of this over a quick call or email :)
Debra Bly
Yankee Ford, Rockland Ford, Tucker Ford, Tucker Chevy
Thank you.