If you haven't heard of Car Gurus yet, hop over to www.cargurus.com and check them out. What you will find is not just another small time classifieds car site. They take the approach of empowering the consumer like never before using what looks like a pricing tool or software for managing prices. Search results are determined by how far below the market average the vehicle is and Information like days old or pricing history are listed under each vehicle. There is even a handy graph to compare vehicles that aren't only local but nationwide as well. Last month their site traffic reached an all time high of 1.8 million unique visits and are coming fast on rivals like Cars.com(4.8M) and AutoTrader(8.3M). With board member experience ranging from Ebaymotors to TripAdvisor I would be willing to bet this is just a precursor to what we will see from the CarGurus.
Why this should matter to you?
It's very likely this is just the first site of many that will be offering detailed pricing reports on vehicles that are for sale online. What type of leverage does that give the customer? No more will you be able to say "its not an old age to the customer" or "they don't know we've had it that long". Customers will not only know how long you've had the vehicle but what price adjustments you have made. Its not out of the question that many vehicle value or research sites like Edmunds or KBB will begin to use this approach in the future. So what can you do to prepare you dealership and sales staff?
Here are a few steps that you can take to not only immediately compete at a much higher level on and offline but also prepare for the future
1. Get a Real Pricing Tool
I know many of you are already are well scripted on the strategy but there is still an enormous amount of dealerships pricing and buying off there infinite wisdom and gut feelings. If you are one of them then stop, find a company that offers a pricing tool with a good reputation(right here on DrivingSales). If you are already using some type of tool make sure it is sufficient enough to give you accurate data and reporting to allow you to price your inventory correctly. There is a lot of junk out there claiming to give pricing advise that is actually junk. I know we all like to save a buck but pony up and pay for a quality tool that fits your dealership.
2. Actually Use It
Many dealerships have made the step to purchasing such services or software but have far from reached its potential. It takes more then just pricing it when it comes in on day 1. There is a strategy behind pricing your vehicles to sell at the most profitable rate that will get the most out of your vehicle in the shortest amount of time. Monitoring your inventory and changing the price accordingly due to the market, consumer activity, and availability in your own inventory will make a huge difference in this strategy. Make sure you understand every dynamic of data available to you and develop a strategy that works best for your dealership.
3. Think Before You Buy
Now that you have your strategy in place and pricing accordingly make sure you keeping your strategy in mind when your at the auction. Make sure your buyers know your pricing strategy and are trained on all the software and again are held accountable to ensure everyone is consistently following your protocol. If you aren't buying with room to price your vehicles correctly then your strategy is not going to reach its potential. This is a very common mistake dealers make, they are doing everything right in the dealership but not at the auction. Most vendors will even offer a stocking tool in addition to those dealers that are ready to take it on.
4. Don't Forget About Your Sales Staff
Give your sales staff ongoing training and hold them accountable. Train them to educate the buyer on how and why your dealership prices their vehicles. Give them confidence in your price and value on the vehicle they are looking at. Embrace the information they have found online in reference to your inventory. Think Kelly Blue Book, back in the day when customers started walking in talking about book values and being under retail most dealers avoided it. Eventually dealers caught on and realized that if they embraced KBB and their book values you could have an easy sale. Customers are already bringing all kinds of information to the negotiating table that wasn't present before. The flood gates have just begun to open and we need to embrace the change and adapt. Making sure your strategy is included on the front lines brings everything full circle and to the customer.
Car Gurus is a pretty obvious warning sign that more and more information is becoming readily available to the customer. I have every reason to believe they will stay and grow. The site is very well put together and has a fantastic link structure for search engines. They really are only missing branding to the mass's and the sky is the limit. Many dealers don't even realize their inventory is listed or where its listed on the site until a customers comes walking in the door with an overly educated offer. Don't be one of these dealerships, make sure your vehicles are correctly represented and your ready to handle a customer from their site.