We created this monster...

[AdamMurray]

Earlier this morning, a friend of mine in the real estate business shared a post on FB promoting a petition to eliminate the scraping of MLS listings by sites such as Zillow. Their contention is that Zillow's "zestimates" mislead homeowners and buyers regarding home values making discussions between realtor and customer very difficult when it comes time to actually arrive at a value when buying or selling a home.

Sound familiar?

Here's a common conversation I have heard between sales managers and sales consultants on a fairly regular basis for quite a few years now:

Manager: Your customer's trade is worth $16k
Salesperson: But, but, but...the customer said KBB valued their trade for $18k
Manager: Tell 'em to sell it to KBB then

Here's another one I'm sure you have all heard before:

Manager: We'll sell them that truck for $32,600 plus T's...
Salesperson: But, but, but...the customer said TrueCar said we should sell that truck for $28k!
Manager: Awesome, tell 'em to roll on over to TrueCar's lot and buy one...

I got in the car business in 1989 selling a very simple CRM program for dealerships. While the program was great for keeping salespeople organized, the real purpose at that time was to get access to dealer's databases so we could sell them direct mail programs...the meat and potatoes of that company. This whole program became necessary when we could no longer get full registration data from the DMV.

I'm afraid it has all gone downhill from there. In our never-ending lust for more leads, it would seem that we have basically dropped our proverbial pants and allowed the world to see every aspect of our business. As a relatively new Internet Director at a dealership in Houston, I will never forget the first time a customer showed me an invoice for a vehicle we were trying to sell him. I was furious and ready to set up a firing line for the traitor in our midst...that salesperson was in deep kimchi and I was the Ginsu knife! Turns out, the customer had found the invoice online and I was quite certain our industry was doomed. Was I right?

My cars dot com rep told me the other day that the most pressed button on their search console was the Sort: Low To High button. That's what this has come to...an absolute race to the bottom and who can drop their pants the lowest and fastest.

Is all this worth it? Can we put the genie back in the bottle and stop letting third party companies scrape our data and publish every invoice, level of holdback and incentive that we ever have? Are online trade valuing tools just #fakenews? Can we fix this and provide a more reliable source for determining realistic trade values?

Sorry for the long post and all the questions. This has really bothered me for a long time and learning of these tactics in another industry and watching them fight back seems to have given me a little glimmer of hope for our future...and our bottom line.

 

[Rick Buffkin]

 

[AdamMurray]

LOL...we all need to be slapped!

On a serious note, though...why does transparency have to equal pricing? I can't think of any other retailer that has to produce their cost of goods to entice and sell customers. Maybe I'm being a little defensive here, but I'm quite certain our margins are significantly lower than most other industries and they're not under this type of scrutiny.

 

[Rick Buffkin]

The root of all of this is transparency. It's spawned numerous plugin's, widgets, websites and vendors. A few years back the buzz word "Transparency" was freaking everywhere! But... It simply didn't start a few years ago. It's been coming for a very, very long time. To my knowledge, I think it originally started with Edmunds posting the invoice and cost for every new vehicle made in their books customers could buy!!! That was the tip of the slide and then vendors, presenters at conferences and everyone else really started adding massive amounts of fuel to the fire a few years back for the digital age. This is whats got us to the place we're at now as far as pricing is concerned! Now that the pricing is gotten to the point that they're happy with and the bottom is completely torn out and they have all the transaction data, the next movement is to remove the sales rep out of the equation and basically make them the ones who simply deliver the vehicles. It's coming!! Just sit back and watch. You'll see.

On a serious note, though...why does transparency have to equal pricing?

What else would transparency equal to???? In our business, the pricing equation is the $64K question. 'Am I paying to much for this car or am I getting a good deal??' and 'Did I get a fair amount of money for my trade-in or did I get ripped off??'

Those managers that you mentioned in your original post, they'll either adapt or they'll be out!! This entire movement in my opinion is way to big now to stop or slow down. It's only gaining more and more momentum in the wrong direction for dealers.

 

[Alexander Lau]

 

[AdamMurray]

What else would transparency equal to???? In our business, the pricing equation is the $64K question. 'Am I paying to much for this car or am I getting a good deal??' and 'Did I get a fair amount of money for my trade-in or did I get ripped off??'

Those managers that you mentioned in your original post, they'll either adapt or they'll be out!! This entire movement in my opinion is way to big now to stop or slow down. It's only gaining more and more momentum in the wrong direction for dealers.

I certainly don't disagree with you but, put simply, I just don't like it. This type of "transparency" does not exist in any other retail platform. As you stated, though, the momentum is there and we are headed for a certain inevitable doom for retail automotive sales as we know it and professional sales associates and managers will be a thing of the past. In the end, though, I truly believe that the customer is going to end up longing for the past...

Call me jaded or bitter, but I have half a mind to build a site that lets dealers know if they're getting a good deal from their vendors. Choose your lead provider, enter your region and a big gauge pops up that tells you what a "fair deal" is in that area. If they want to take our negotiating power off the table it's only fair we have the same option, right? After all, it's all about transparency...

 

[Rick Buffkin]

Call me jaded or bitter, but I have half a mind to build a site that lets dealers know if they're getting a good deal from their vendors. Choose your lead provider, enter your region and a big gauge pops up that tells you what a "fair deal" is in that area. If they want to take our negotiating power off the table it's only fair we have the same option, right? After all, it's all about transparency...

That would be awesome. Flip the table. Ideally for me, I would want it powered by verified dealers / managers or ppl that actually use the tool. Keep the Vendors from being able to go in and edit / manipulate info. Why should leads for one dealer be $15 and another dealer be $30 for the same lead. Or, why should a AT pkg in one area be $1,000 and in another area of the same town be $3,000 for the same package. They're doing things like this on a daily basis simply because they can get away with it and dealers don't know! It's not fair. They'll tell you that you need to have your cars priced to market, you need to focus on your reviews, you need more pic's or you need this or you need that!!! It would be nice to have a section here on DR like your talking about. If you have a good solid vendor that's actively involved with your dealership and who wants to see it succeed, it would be nice to have somewhere to let other people know your experience, the expense and overall return by doing business with that particular vendor.

 

[AdamMurray]

...why should a AT pkg in one area be $1,000 and in another area of the same town be $3,000 for the same package. They're doing things like this on a daily basis simply because they can get away with it and dealers don't know!

Nailed it! The answer is quality of AT salesperson and the value they build in their product intersected by the negotiating ability of the dealer they are sitting in front of. Sounds like an old school car deal to me. We should demand transparency in their pricing!

The rest of your post @Rick Buffkin has some really good ideas as well and would serve us well in our dealerships. In my current state of mind, though, I am merely wanting dealers to privately/anonymously submit their invoices and build a database of pricing insights that will give us negotiating leverage.