CONSUMER
A shopper is an independent potential customer of a particular brand or product. 'SHOPPERS ARE NOT LINEAR' is the truest post to this entire Thread, and it takes us along this road. An impulse is necessary to move a shopper from wherever they might be into our 'Transaction'.
Auto retail present is almost out of impulse. The car isn't an impulse most times because 80% of consumers already have studied it well online. Pricing is not even an impulse. AT and Cars must produce a platform for establishing an involuntary inclination prompting to action...
AutoTrader's Chip Perry had the advantage of knowing this 5 or 6 years ago, because I told it to him.
Subscriptions are a poor value proposition in an Information Age. Think about it, what you are paying for in a subscription - simply information. It's free to the consumer to gather all the information a dealer has to offer at traditional OBS's. But, dealers are paying for their access to the info through current AT and Cars subscription-based product models. Why so?
At least a portion of consumers are willing to pay gross profit on a car deal. The approach to traditional advertising takes the portion down percentage-wise because traditional advertising in auto retail for 120 years has conducted a linear conversation (and, let’s remember here the point Joe makes that “SHOPPERS ARE NOT LINEAR”) moving the customer to action primarily on the basis of discount or price driven messaging.
Consumers are not all alike, though. And, this is one of the gigantic pains of traditional advertisers figuring on how to keep their age-old product offerings valuable in an Information Age.
Since consumers are not all alike, ‘the handshake’ which is necessary to deliver a shopper from an online buying service like AT is not always alike, either.
Consumers, hence, are to be driven to the Transaction in any number of ways. As dynamic as consumers are today, it would be impossible to believe any spin on a traditional advertising approach would yield any substantial increase in the percentage transactions a dealer client expects.
A social-based approach to attracting the consumer into the Transaction must be the answer. And, today, the perfect platform for that social-based approach exists.
J. Kershner, consumers/customers, as you well know, are the end client of all OBS’s. All shoppers are not Consumers. And, for 120 years the common denominator in ‘our industry’ (I still can’t help but wonder what exactly Joe Pistell meant by that…) for determining the difference has been the Consultant.
To such point, isn’t easy to see the value of putting the consumer and consultant in ‘the handshake’ mode as soon as possible. Isn’t this what will need to happen anyway, if the shopper is to be converted – whether online, or on premises?
Consumers are social creatures to which we sell our products, and Consultants are the conduit by which we do it in almost every instance.
TRANSACTION
A valuable thing is transpiring online each and every day in an Information Era. Socialization is virtual, now. Because a conversation that once occurred only by phone or physical interactions between prospective consumers/customers is now available online, the sales channel for auto retail has an added dimension.
Transactions are the result of consultants and consumers shaking hands after, during, or in rare instances prior to a conversation about a specific value proposition. That specific value proposition doesn’t exist at AT or at Cars, right now. In example, even cars listed at these OBS’s at clearly competitive prices are being negotiated to less valuable selling propositions for the dealers. This is dysfunctional!
If individual consumers are looking for the one dynamic that moves them to the Transaction point, then individual value propositions must be offered. We are already doing this in auto retail, and have been doing it just this way for 120 years. ‘The handshake’ is how we have done it. And, in this Information Age, it is still how we will do it.
Transactions, let’s say, can come from any one of a 360 degree dynamic. Conversations are the information gathering processes that determine which one. Consultants are prepared with negotiating, product knowledge, and sales process training to help them do this each and every day – several hours at a time. They have the ‘active communicating’ skill down as it pertains to the auto retail process, because they are doing it more often than anyone else.
Transactions are 50% consultant, 50% consumer, and 100% handshake. If a dealer is waiting until a potential consumer from an OBS is actually on the premises to commence ‘the handshake’, then he is shooting himself in the foot. While AT and Cars have products that are relevant to how we all do our work in Auto Retail Present, that they wont need significant innovation behind their next product offerings beyond the idea of driving shoppers to yet another online space is a farce. If I am a dealer who pays to subscribe to their services, I am asking for a per unit breakdown of my cost against which ROI may be measured. The Transactions are eluding AT and Cars on their current platforms.
It is an easy fix. OBS’s must learn to measure the Transaction. There are about 13 Million new cars forecast to be retailed in 2011. If between AT and Cars there are over 25 Million unique shoppers for cars being generated, then this is an instant deduct in the value of their product offering. It says that a subscription to either means I am spending at least 100% more than what I should for each Transaction they are able to deliver. And, that would be if AT and Cars were responsible for 100% of the 13 Million new cars expected to be delivered in 2011.
The fix is inherent what J.D. Rucker is doing through his Hasai offering over at TK Carsites and I do look forward to working with him. At this point, there is more to share. And, of course, “Appreciation Rules Creation” being my life credo, I would be happy to share more of it with you, Jeff.
the ocean is calling! look for my reply asap!