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New Toyota MAAP Pricing Trainwreck

ErdmanMotors

Lot Lizard
Dec 8, 2010
8
0
First Name
Ryan
As I'm sure most of you know Toyota just went to the new MAAP pricing guidelines which limits the allowable advertised discount on any new Toyota. In my market discount has been a driving factor ie ($8K off an a new Camry). Since we are in a smaller market on an island we relied heavily on pulling traffic from outside our market for sales and did so pretty well.

Since April 1st when we could not advertise our best price on new vehicles our in market website VDP views are down 23% and our out of market website VDP views are down 48% MTD and our new car sales to start the month have been pretty rough.

Not advertising price is uncharted territory for us and we are feeling it. If the DealerRefresh collective has some insights on getting back up and running I would really appreciate it.
 
Unfortunately, valuable VDP views require competitive pricing. Absent that, driving VDPs to MSRP or Invoice pages is not likely to grow your new car sales.

If I were in your situation I would focus on three things (in no particular order):
  1. Leads. I would be certain I am generating and buying as many quality leads as possible in my market. (This way, you can expose more people to your actual selling prices.)
  2. Database. I would be following a robust process to market to my database. (Here's a free video series on this: http://stevestauning.com/how-to-set-and-sell-owner-marketing-appointments/#.Vw0KkPkrLDc)
  3. Used Cars. I would focus heavily on streamlining all my processes around buying, reconditioning and marketing used cars.
I know there are dealers out there not following the new rules, so if I was a dealer who was in compliance, I would document and report any dealer not in compliance. This practice is not just intended to ensure a level playing field today, but to make certain you have the ammunition you need in the off chance you find yourself in court with your OEM over poor sales efficiency.
 
I just checked your website and your not displaying any sale prices. You can still display sale prices. You just can't go below MAAP. You just need to get creative.

@Stauning
Really, Really good advice
If I were in your situation I would focus on three things (in no particular order):
  1. Leads. I would be certain I am generating and buying as many quality leads as possible in my market. (This way, you can expose more people to your actual selling prices.)
  2. Database. I would be following a robust process to market to my database. (Here's a free video series on this: http://stevestauning.com/how-to-set-and-sell-owner-marketing-appointments/#.Vw0KkPkrLDc)
  3. Used Cars. I would focus heavily on streamlining all my processes around buying, reconditioning and marketing used cars.
I know there are dealers out there not following the new rules, so if I was a dealer who was in compliance, I would document and report any dealer not in compliance. This practice is not just intended to ensure a level playing field today, but to make certain you have the ammunition you need in the off chance you find yourself in court with your OEM over poor sales efficiency.

The new rules have teeth. If your caught breaking them, they will bite and bite very, very hard. There's not much room for error. Also, even if you do market to your database of customers, you still can't advertise pricing below MAAP. The only time you can is when you have 1 to 1 communication with the customer.
 
I just checked your website and your not displaying any sale prices. You can still display sale prices. You just can't go below MAAP. You just need to get creative.

@Stauning
Really, Really good advice


The new rules have teeth. If your caught breaking them, they will bite and bite very, very hard. There's not much room for error. Also, even if you do market to your database of customers, you still can't advertise pricing below MAAP. The only time you can is when you have 1 to 1 communication with the customer.

So many dealers are overly consumed with lead conversion? Do you have social media, 12-13 photos on the VDP, do you use click here for video on the VDP? There are so many other call to actions. There will be a pain in the conversion, and you will get more price competitors. However, there is still hope. Just have to redefine how you convert the customer.

One of our dealer suffers from this pricing module. However, one of the most effective thing we did on the VDP was adding "request sale price" - to then give them the sale price or confirm offers. You can also use a lead accelerator "$500 off a new or used vehicle." I am sure in the compliancy, it might have to say M.S.R.P, but who reads fine print?
 
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@derrickwoolfson
So many dealers are overly consumed with lead conversion? Do you have social media, 12-13 photos on the VDP, do you use click here for video on the VDP?

@ErdmanMotors didn't say his lead conversions are down which I'm sure with the percentage numbers he mentioned his VDP views are off, his lead conversions are really down. He said his VDP views are way, way off. He's got to get em' to the VDP!

@ErdmanMotors You need to put some kind of sale price on the vehicle. If it's nothing but MSRP minus the Customer Cash Incentive. Then maybe a "request sale price" on the VDP.
 
@ErdmanMotors You need to put some kind of sale price on the vehicle. If it's nothing but MSRP minus the Customer Cash Incentive. Then maybe a "request sale price" on the VDP.

I might not be with Toyota anymore, but I know you can list the MSRP and than all cash backs + any incentive rates for that period. While I was with Toyota our plan was to create two spots on the VDP for Request Sale Price + Text for Sale Price.

While yes, this is going to be a hassle at first I think some of the smaller dealers located near the volume dealers will be able to see a rise in new units sold. This levels out the playing field from your big box being able to "poach" online customers to their dealership. I know we had a big problem of customers coming and test driving on our lot and not even getting a price from us and going straight to Omaha/Lincoln Nebraska to buy because they believed they could get a better deal, or saw a better online deal there.

Toyota is just really forcing you to get creative and work harder to get that contact information.

Also while your personal VDP's might go down, I can see leads increasing from Toyota.com as they search for the best prices, so than it will be up to your internet team to really follow up promptly on leads (which shouldn't be an issue since Toyota has a 15 min first contact rule).

Just my thoughts.
 
@ErdmanMotors
As I stated in my post earlier. You need to put some type of sales price on the vehicles online. You don't have to be the cheapest but you do have to be competitive. Now more than ever, you need to focus on your inventory. You need to know which new car models have the quickest turn times thats in your inventory. Not only just the models, but the trims along with the colors. You need to get your new car manager onboard, the person that does your dealer trades and your GM. Before you trade for a vehicle, you need to know exactly what vehicle in the exact color to get back that will have the quickest turn in your area. Use this same logic when ordering vehicles as well. Look at your website, CRM and lead data to determine which used car prospects flipped to a new car sale. Which used year make and model vehicles those prospects inquired on. With that data, you can have your used car mgr or who ever buys your used inventory to pick up a couple of these vehicles at the auction. Those used vehicles are there strictly as a vehicle to flip to a new car and only use them in that manner.
(Ex: Used 2013 Honda Accord. You got 15 inet leads on this car but when you look at the click traffic, 70% of those leads also looked at 2016 Toyota Corolla.)

The Honda Accord might be a great used car to use to flip customers to a new corolla. It might be a good idea to pick up one or two of these at the auction. Don't price them so cheap that they will sell quickly. Your goal is to get them interested in a Corolla. On the outbound emails, include new Corolla offers. Hopefully you kinda get where I'm going with this.

Fix the verbiage on your "Get E-Price" form. Is it to get an eprice or is it to check availability? Also, if it was me, I would try and take pics of the new cars out in the open and away from under the trees. It makes the colors of the cars look darker than they should be.

I just checked and right now all the other Toyota dealers in a 50 mile radius of your store are all posting MSRP and no sales price. Just posting MSRP minus the cash rebate and you would be priced better than everyone around you.
 
We noticed a decline for the first couple of weeks in January having everything at MSRP less rebates. We then decided to price with discounts off of MSRP that were MAAP compliant. As @Rick Buffkin mentioned, we also changed the default new car comment to "Reduced Internet pricing available! Click on the E-Quote button for this 2016 Toyota Camry and one of our internet sales associates will reply with our current sale price" VDP's and form conversions did pickup after showing the discounts and changing the comment. Although the websites prices are not as low as they were before MAAP, our three Toyota stores new car volume is up for the year.