"Get your ePrice" for new car inventory?

[MullerToyota]

We use the ePrice button and it made a significant difference. We used to price our vehicles online and we have stopped. We do provide an internet price quote for our customers upon request through the ePrice button.

Our philosophy is to drive appointments and you can't do that if you give away all the information. In our dealership's opinion, customers want to get your numbers and shop. We have found that by limiting the amount of information we give customers over the phone/internet - they better numbers we get when it comes to setting, keeping and selling internet customers.

This may seem opposite from what people think - and it is a struggle to get sales people to understand this - but I train our internet dept. on how to handle customers objections and close for appointments without giving out all the information.

I believe wholeheartedly that people that give you grief for not giving you all the numbers are never going to your dealership - and if they are - it will be at a substantial loss in gross and probably customer satisfaction. On the flip side, by calling customers within a few minutes of the lead, showing empathy, and trying to help them find a car - as opposed to giving away the gross - you will find that you create good customers that spend more and are happier.

Providing low ball quotes is the only way for bad salespeople to compete with good salespeople.

 

[Eley Duke]

Eley,

I am a used guy, so don't laugh ... but isn't this a new day for GM and all GM dealers? Is NEW Chevy inventory turning quickly and not so easy to get (as it once was)?

If so,
then it's a SELLERS MARKET and all past practices are now old and cold.

And, If so, I vote for "get your ePrice"

Would never laugh at ya Uncle Joe, we are new car people with a good used business, but we are trying to increase our used business.

It's tough with a saturated used car market and the 3rd largest used dealer in our market sitting next to me, but, we are learning and tweaking weekly. The Chevy business is getting better, we have not seen the % increase some other Chevy stores in our area have but we are meeting our objectives, I attribute this to the fact we are also a Buick, GMC, Cadillac store carrying about 100 total in inventory; its tough to carry all those lines and have the right mix, GMC buyers are not Chevy buyers, so it dilutes our Chevy sales. If we were a single point Chevy store carrying a wide range of inventory we would probably sell more, but there is no way we are giving up Buick, GMC and Cadillac.

I plan to do a little testing for my market, price some vehicles at MSRP, then minus rebate. Then price some at MSRP, minus rebate and a dealer discount. Does anyone have advice or tried this? I don’t want to look foolish to the consumer that some vehicles are priced and others not, but I also want to test this out.

 

[ddavis]

How did I miss this thread? This is probably the most important and controversial topics among retail automotive Managers.

I am an old car guy, Internet guy and a consumer. My experience is only with volume lines. I price my cars.

As an Internet guy, I don't differentiate between new and used cars. To me, it is all iron, to the frustration of both New and Used Car Managers. I put the same effort in merchandising my new cars as my used. I had custom descriptions, actual pictures, videos and market-based pricing on all of our cars.

On Saturdays, Managers would ask me how many confirmed appointments that we had. I would usually respond with a total ...thirty five, twenty eight, or whatever. When they would ask, how many new or used? I usually didn't know or care. Yes, this aggravated some but I expect Managers to be involved with the CRM. You put out the maximum effort and let the chips fall where they may.

I am a consumer. I purchase many things online. Like everyone, I enjoy the convenience. One of my favorite places is Amazon. I read the consumer reviews and can easily see competitive prices. If Amazon said "click for price", I wouldn't waste my time. One of my friends is a Regional Manager for AutoTrader. In conversation, he told me that Kelly Blue Book had a bounce rate of over 97%. When asked to fill out the required information, consumers bailed. I'm certain that customers, on our website, might be just as reluctant. With market-based pricing, I know that my leads increased along with my closing ratio (sales as a percentage of leads). For the same reason, I don't like coupons popping up when a customer enters our website.

I am a car guy with over thirty years in the business. I am in a large, extremely competitive market. I know that using market-based pricing will effect the front end gross. My focus became undervaluing the trade, leasing, accessory sales and setting up the F&I department.

I have run two Internet departments in this market. In both, we sold more cars than the floor and our average total gross was higher. More recently, I was with one of the larger automotive groups and we were number one in Internet sales among over 75 stores. Compared to the other stores our budget was average. We sold more new than used vehicles.

Because we sold more cars at a higher gross, the best talent tended to migrate to the Internet department.

 

[kcar]

How did I miss this thread? This is probably the most important and controversial topics among retail automotive Managers.

I am an old car guy, Internet guy and a consumer. My experience is only with volume lines. I price my cars.

As an Internet guy, I don't differentiate between new and used cars. To me, it is all iron, to the frustration of both New and Used Car Managers. I put the same effort in merchandising my new cars as my used. I had custom descriptions, actual pictures, videos and market-based pricing on all of our cars.

On Saturdays, Managers would ask me how many confirmed appointments that we had. I would usually respond with a total ...thirty five, twenty eight, or whatever. When they would ask, how many new or used? I usually didn't know or care. Yes, this aggravated some but I expect Managers to be involved with the CRM. You put out the maximum effort and let the chips fall where they may.

I am a consumer. I purchase many things online. Like everyone, I enjoy the convenience. One of my favorite places is Amazon. I read the consumer reviews and can easily see competitive prices. If Amazon said "click for price", I wouldn't waste my time. One of my friends is a Regional Manager for AutoTrader. In conversation, he told me that Kelly Blue Book had a bounce rate of over 97%. When asked to fill out the required information, consumers bailed. I'm certain that customers, on our website, might be just as reluctant. With market-based pricing, I know that my leads increased along with my closing ratio (sales as a percentage of leads). For the same reason, I don't like coupons popping up when a customer enters our website.

I am a car guy with over thirty years in the business. I am in a large, extremely competitive market. I know that using market-based pricing will effect the front end gross. My focus became undervaluing the trade, leasing, accessory sales and setting up the F&I department.

I have run two Internet departments in this market. In both, we sold more cars than the floor and our average total gross was higher. More recently, I was with one of the larger automotive groups and we were number one in Internet sales among over 75 stores. Compared to the other stores our budget was average. We sold more new than used vehicles.

Because we sold more cars at a higher gross, the best talent tended to migrate to the Internet department.

I love it! I'm on that battle right now.. ePrice works very very well for getting leads. But at the same point, I feel it's better to be upfront and honest and leave that first impression. No other dealers have the balls of put the prices on the line and display them. I've been tempted to do this for awhile now.. Everyone's asking for the lowest price anyways, why not just display it in the first place. It's what's retailers have been doing for years. You're on point with the Amazon thing, if it asked me to request a price, I'd be sure to leave.. BUT in another regard, we are talking about a HUGE investment vs the $10 product.. People will take the time to research, etc. So leaves me unsure about the concept, but I'll figure it out.. All in do time.

Also what are you showing to your visitors regarding competitive prices? Also how do you feel about this?.. Customer looks at your price.. Calls/E-mails another dealer, they see all your prices online, and go $500 lower.. You just lost that lead, and you have no way to contact them now.. What now? You can't be the lowest or you'll make nothing.. So you can be fair, but you can't beat the other dealers price after you've shown theirs and have no way to contact the customer.. So you're out.

 

[kcar]

We use the ePrice button and it made a significant difference. We used to price our vehicles online and we have stopped. We do provide an internet price quote for our customers upon request through the ePrice button.

Our philosophy is to drive appointments and you can't do that if you give away all the information. In our dealership's opinion, customers want to get your numbers and shop. We have found that by limiting the amount of information we give customers over the phone/internet - they better numbers we get when it comes to setting, keeping and selling internet customers.

This may seem opposite from what people think - and it is a struggle to get sales people to understand this - but I train our internet dept. on how to handle customers objections and close for appointments without giving out all the information.

I believe wholeheartedly that people that give you grief for not giving you all the numbers are never going to your dealership - and if they are - it will be at a substantial loss in gross and probably customer satisfaction. On the flip side, by calling customers within a few minutes of the lead, showing empathy, and trying to help them find a car - as opposed to giving away the gross - you will find that you create good customers that spend more and are happier.

Providing low ball quotes is the only way for bad salespeople to compete with good salespeople.

You have the right concept too. I think it's a mix in the middle. Show your price, discount it down a bit, then have the e-price to show an even lower price (thus capturing the lead).

 

[ddavis]

I love it! I'm on that battle right now.. ePrice works very very well for getting leads. But at the same point, I feel it's better to be upfront and honest and leave that first impression. No other dealers have the balls of put the prices on the line and display them. I've been tempted to do this for awhile now.. Everyone's asking for the lowest price anyways, why not just display it in the first place. It's what's retailers have been doing for years. You're on point with the Amazon thing, if it asked me to request a price, I'd be sure to leave.. BUT in another regard, we are talking about a HUGE investment vs the $10 product.. People will take the time to research, etc. So leaves me unsure about the concept, but I'll figure it out.. All in do time.

Also what are you showing to your visitors regarding competitive prices? Also how do you feel about this?.. Customer looks at your price.. Calls/E-mails another dealer, they see all your prices online, and go $500 lower.. You just lost that lead, and you have no way to contact them now.. What now? You can't be the lowest or you'll make nothing.. So you can be fair, but you can't beat the other dealers price after you've shown theirs and have no way to contact the customer.. So you're out.

My experience is with volume lines. I have never worked for a Lexus, Mercedes or BMW store.

92% of customers spend, on average, 19 hours doing research. In that research, price is a prime consideration. Much of those price comparisons take place on the display advertising pages. Edmonds is just one site that provides invoice prices. It has become a commodity business. When I was at a store, I shopped my competition every month. If they actually gave me a price, they shot me net net. There are no mysteries out there. It isn't a matter of if you are going to price your cars, but when.

Customers may not engage me through my website or third party providers. They have done their research and just come into a dealership and end up with a floor salesperson. This is usually where there is a complete disconnect. He hasn't been qualified and isn't likely to tell you that he has received bids from the competition or has seen prices on a website. A wall comes up and the desk manager and salesperson agree that he is a flake.

Customers that enter a site and see MSRP are likely to bounce. I believe that they are much more likely to engage me if they have seen a price. "We are talking about a HUGE investment vs the $10 product" True, so we have to figure out how to make money when the front end gross is limited. At my last two stores, we had a higher average gross profit (front and back) than the floor. We sold more new than used.

Considering your three largest variable expenses, how do we structure all of this to end up with a stronger bottom line? I believe that is the most important question for successful dealerships.

Looking at dealerships placement on AutoTrader and Cars.com, I have seen more dealerships cutting back. It is a great time to be in the game. Much of the competition is asleep.

 

[Alex Snyder]

Customers may not engage me through my website or third party providers. They have done their research and just come into a dealership and end up with a floor salesperson. This is usually where there is a complete disconnect. He hasn't been qualified and isn't likely to tell you that he has received bids from the competition or has seen prices on a website. A wall comes up and the desk manager and salesperson agree that he is a flake.

I just want to capture this part of your post. It is a key issue that is rarely talked about.

 

[john.quinn]

I just want to capture this part of your post. It is a key issue that is rarely talked about.

Ahhhhh..... Alex, are you hinting or insinuating that talent and communication still play vital roles in the dealership?

 

[danoneil]

TODAY IS 01-26/12 . Bumping this thread so that I can read through it more.

But I have a question in regards to the MSRP listed vs lthe listed used car internet price.

Do you think internet customers pay attention to how much the discount is on the car ?

Does it really matter if the discount is $500, $750 or $2000 off ?

 

[ddavis]

Alex, I really respect you and I think that you've been one of the pioneers for the Internet movement in the auto industry. However, you are wrong. There are too many things to consider when determining whether or not to price your new car inventory. What if a dealer has 500-1000 new cars in stock? That would make it very difficult and time consuming to price and keep up with all of those vehicles. Also, ArtMorris has a point when he says putting a price on a vehicle "would violate our manufacturer's rules". Honda, for example, does not let you advertise a price below invoice. Therefore, if you advertise a Honda vehicle at invoice on your website and your potential customer sees this and then contacts your competitor for their "ePrice", you are screwed. Plain and simple. I also disagree with the fact that dealers should "aggressively" price each and every new car. The gap between showroom customers and "Internet" customers needs to be bridged. Essentially everybody does "research" on new vehicles before they buy these days, including the customers that show up on your lot. Sometimes, these customers will show up on your lot regardless of whether or not your website gave them the information that they were looking for. Profit is not a bad word. When you aggressively price every new vehicle online, you risk the chance of "short-selling" a vehicle that might have brought close to MSRP. I think that negotiation is a part of the business that will never die. After having said all of this, there are times when a dealership should price all of their new inventory and times when they should not.

You bring up a subject that needs to be talked about more often when you write: There is a huge power struggle going on right now between "car guys" and "Internet guys". "Car guys" want to make money. They want to maximize gross on every car deal. Most of the time they are thinking about profit. A lot of times, this "car guy" mentality is not too sympathetic to the average Joe. The Internet poses a huge threat because it gets harder and harder to succeed in the area that they were taught was most important. Gross. "Internet guys" may still be profit minded, but they go about it in an entirely different way. In my opinion, they often sacrifice gross to be accommodating. I think that they tend to be unit minded instead of gross minded. Typically, the "car guy" lives for the negotiation and wants the objection from the customer and the "Internet guy" wants to avoid any confrontation and for the transaction to go as smoothly as possible. The Internet guy needs the car guy and vice versa. Over time, these two personalities/philosophies will do more than coexist. There is a lot that they can learn from one another.

If you are pricing cars, it is time consuming. I could have that inventory re-priced the first working day of the month.

Honda doesn't have rebates so why would you post a car below invoice?

Let's look at the "get your eprice" guys. I shopped my competitors, every month. I got prices of net.net and below. If I have the lowest price on Cars.com and Autotrader, I don't get into a bidding war.
Front gross is just one way to make money. I had a team of 9 ISMs. We sold 70% of the cars and our average total gross beat the floor guys.

Matt, I have over 30 years in the car business and have held every position in the front of a store from a salesman to the General Manager. Yes, my passion is the internet but are you going to tell me I'm not a "car guy"?

In the internet age, average gross profit is no longer how you measure success. Today, our main consideration has to be departmental net profit.