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Lindsey Auguste and Dennis Galbraith

Lindsey Auguste and Dennis Galbraith Investigative Reporters

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Transparency as a Competitive Advantage

“Just get ‘em in!”  Do sales managers really still say that?  Unfortunately, yes.  What’s even more unfortunate than the lack of transparency offered to customers on the Internet or over the phone with that strategy is the lack of understanding about the way the automotive industry is shifting.  Not being upfront about details in the retail automotive sector used to have its benefits:  giving dealer time to sell their value proposition first, being able to feel out the customer for negotiating purposes, and maybe even getting the upper-hand when it came to closing the deal.  But the truth is, the market doesn’t respond well to that tactic any more, and some dealers have been slow to realize that transparency in the process can actually be a huge competitive advantage.

Many of today’s customers feels like they have all the information they need at their fingertips.  With just a few keystrokes, people can find quotes for health insurance, coupons for pizza, and movie times for the hottest show.  So when they come shopping on your website or find the car of their dreams on a 3rd party site from your store with no or little information, that experience is inconsistent and unsettling, especially if there is no information or incomplete information on price.

Presenting information such as pricing, incentives, and doc fees builds trust with the online shopper.  They begin to form a relationship with your online presence before they form one with you directly, so you want to make sure your giving the impression you want to be seen. Withholding information about your inventory online creates a sense of distrust, scam, or skepticism.  When you omit information about a car, people instantly jump to the conclusion that you’re either pricing your inventory too high (if there is no pricing information) or there’s something wrong with the vehicle (if there are no pictures or descriptions).  Being upfront with details on your inventory immediately gives you a leg up over the dealers who are still withholding information. 

Being forthcoming about details and information about your inventory can also keep you out of hot water.  We’ve seen the FTC take dramatic charge of advertising compliancy to protect the customers.  Being transparent about your pricing and other pertinent disclosures can keep you off the FTC watch-list and save you tons of money and reputation down the line. 

Of course the ultimate goals for dealers is still to “get ‘em in” and close the deal.  The trick is understanding that for an increasing number of shoppers, transparency is what gets them in. There are lots of items shoppers go online for far more frequently than autos. For many shoppers, the process is to simply skip over products or retailers that don't provide enough information and move on to those that do.

 

You can learn more about online pricing and compliancy in our white paper, “New-Car Price Transparency and Regulation Study, Spring 2012,” available for FREE download at http://www.drivingsales.com/research/new-car-price-research-study

Dan Ferguson
great post...this could have been posted long ago, but to your point, it still needs to be said.
Chris Costner
Bravo Lindsey & Dennis, great points here. I have never understood after so much time, effort and money have gone into creating a digital environment that produces a "second moment of truth" for our dealerships, why dealers would want to create any negative obstacles that can prevent a genuine appointment from being made. The more apologies or explanations for the "unknown" we have to make with our prospective clients, the more we lose credibility as it has been said over and over. This is counterproductive and dealers will find themselves spending more time on restoring public loyalty versus developing new business.
Ed Brooks
Chris, I think it's because there are dealers and managers that long for the 'Good 'ol days' of the car business - and they were very good. They see what their competition is doing in their advertising, but don't have an understanding of how they operate on the floor. The dealer longing for the Old Days will obscure information because they not only expect to play the old game of heavy negotiation - they will play it. The dealership truly embracing and leveraging transparency works a very different process on the floor and doesn't need to hide anything to run a highly profitable operation.
Bryan Armstrong
Chris "The more apologies or explanations for the "unknown" we have to make with our prospective clients, the more we lose credibility"...So true. What's worse is that now you really HAVE given your competitor the advantage. All to often I see people given a price but the O.T.D. number withheld. Customer calls the next Dealer saying "they gave me this price but wouldn't give me the total. Will you match it and give me the number?" BOOM That's a 2 car swing on your report.
Jim Bell
Great post. I know that we are starting to see some shady advertising and quotes going on in our market. We have seen lease quotes with fine fine print of $2499 due at signing...plus $595 acquisition fee...plus $395 documentation fee....plus $69 title fee plus taxes. We are also seeing quotes with no transportation fees and the dealers won't tell that customer that until they get to the dealership and say, oh, that doesn't include the $740 destination. How does that make the customer feel? We have been upfront and forthcoming with customers when approached with these quotes and have to tell them, not the dealer that quoted them. It's no wonder why we have a bad reputation in this country. The good dealers that are doing the right thing get penalized.

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