AutoTrader.com Pricing???

[Lightnup (blog)]

Alex wrote: " .....Yep, that’s right, I called AutoTrader.com a “third party lead provider”. Newsflash AutoTrader: you’re playing on the Internet, you’re trying to get customers to call and email dealerships, and you’re trying to deliver traffic to a dealer’s website. Yes, you’re also putting customers on the lot, but we all know that cannot be tracked effectively. At the end of the day you fit my definition of a “third party lead provider”, so accept it and let’s not have that argument ever again. Yes, that also means I’m going to rank you against Cars.com, AutoUSA, Dealix, and all those other things we have allocated to the…..drum roll please….”INTERNET BUDGET”...."

Newspapers, magazines and radio ads try to get customers to call or email the dealer and try to deliver traffic to the dealer's website. Guess they're third party lead providers too? ATC doesn't ask for any contact info from the customer, doesn't provide any contact info to the dealer. That's a lead provider? Hmmm. Sounds like an advertiser to me.

 

[Alex Snyder (blog)]

Then explain why AutoTrader.com Internet inquiries end up in my CRM. Why does the phone ring with a pre-recorded "Please wait for another quality lead from Autotrader.com?" And explain why I get neither of those things from any traditional media. It is also strange to me when I see those "Contact Seller" boxes all over Autotrader.com and Get a Free Price Quote on the ATC new car listings. Maybe I'm just confused?

 

[Chris K]

AutoTrader is just like the Public Utility Companies: We pay to create, improve and sustain their infrastructure - increasing their value, allowing insiders to reap millions of dollars in profits though nifty stock option schemes... then once we do that - they rake us over the coals with exorbitant listing fees. In addition to that, they reap huge profits by selling ad space on their websites. I'd rather see an honor system in place, so when we sell a car listed on AT - they get a flat fee. Let's say $50. It's just going to be a matter of time, when someone click on your car for sale on AutoTrader, a flash ad will pop-up over the vehicle, forcing you to watch a 20 second ad for Progressive Insurance showing you how much this car will cost you to insure... then it will auto-minimize and you get to look at the vehicle...

Without the dealers... there would be no AutoTrader. Without AutoTrader, there will something else.

 

[Lightnup (blog)]

Sure is a lot of self-righteouness about reasonable pricing coming from folks in an industry known for $1,295 "Environmental Protection" packages ($10 worth of undercoating plus a quickie wax job) and $799 "Dealer Fees."

Like you wouldn't dance through your showroom after putting a car over the curb at M.S.R.P. plus fees plus a big back end? Home run, baby, high-fives all around! It's what car salespeople and sales managers dream of. Or the ever-popular "over-sticker" price of a hard-to-get hot new model. So don't begrudge a company for recognizing that they are entitled to maximize their pricing in the marketplace as long as they are providing value that customers are obviously willing to pay more for.

Does it make everybody happy? No. But then neither does hearing, "Oh, you must pay our dealer fee, it's printed right there on the buyers order."

 

[Alex Snyder (blog)]

Lightnup,

A few of us are commenting with our real names, links to where we work....we're completely transparent. How do you explain yourself? Why are you hiding?

To respond to your last comment, I'll admit my first thought was: is that the best he's got? You're right though. As an industry we are all about profit. We are the industry who is more exposed for this than any other. Yes, I have to respect AutoTrader for maximizing their profit on lip service. I don't respect your argument though. I think it is weak - you're stereotyping all dealers together in one bunch while this entire thread has been about one single company. You're trying to shift the argument.

Since it may be escaping you, here's the point of this thread: the Internet has created individual power. It gave everyone a voice. It is turning traditional media on its nose, and the media companies can't figure out how to make sustainable profit on it. Distribution isn't as much of a factor anymore, so the costs of doing business are less and competition is coming from every corner. But, there is a standard of living people are used to. I believe AutoTrader is battling with this right now. They're raising prices to see if they can sell their Internet package on the same level as their publication package. Nobody has figured this whole Internet thing out yet, but one thing we have from it is a voice. A few of us are using Dealer Refresh to be a voice for dealers. For better or worse, it is something we've never had before.

 

[Bob L]

So I guess I should sell vehicles with one year leases and renegotiate the deals with payment increases of anywhere from 30% to 80% for my customers every year on the same vehicle? Great analogy, totally apples & oranges. You get what you pay for simple as that, many aren't getting what they pay for from Autotrader.com anymore. Anyone seen my Rep? Haven't seen one in the dealership in about 8 mos? Would be out third Rep in under two years.

 

[Joe Pistell]

If I were Cox, this is EXACTLY why I'd get AT ready for sale.

AT has reached it's zenith.
-"1st to market" leverage...GONE.
-Competition growing exponentially.
-AT Brand loyalty stressed
-Sales methods, programs and support causing high turnover.

It'll need a fresh new vision and a total overhaul to remain "relevant".

"It's Elementary, my dear, Watson..."
Fatten the calf just before you take it to market.

Gotta love DR!
Joe

 

[Barney]

If Cox hadn't privatized all divisions I'd think you were on target w/the sale of Autotrader proposition. Too much revenue for them to give up on so easily esp w/out the investment banking speculation driving stock pricing up or down on them since they're private. Most everyone I've known who's been with the company since the early days is long gone, must've got options & rolled elsewhere.

 

[Tim Morris]

What everybody in this thread seems to be missing is this: AutoTrader is comfortable raising their prices because they are confident (and correct) that the majority of their users will simply post a negative reaction on DealerRefresh.com but continue to pay their increases rather than drop the service.

AT has stakeholders to worry about, same as any for-profit company. When they raise rates, I am sure they don't do it arbitrarily...they conduct market studies to gauge what the net effect of a rate raise will equal. If they determine that they will lose an insignificant portion of their customer base by raising rates, and that the additional revenue will exceed any losses, then it's a good idea to raise them!

Long story short: AutoTrader knows that the worst thing to happen to them from their rate hikes is that a bunch of dealers show up on DealerRefresh to complain about them. Big deal.

By the way, I am on the side of the affected dealers in the room...I have seen the rates increase each year, and I think it is highway robbery in most cases. The way to change it, though, is to drop AT before the others have a way to justify their own rate hikes across the board.

 

[Bruce (blog)]

We plan on cancelling autotrader.com in mid November and will not entertain getting back on until they begin their national advertising campaign again next Spring. They've brought little or nothing to the table for us in the Winter months, just based on past performance. Do we pay more every year? you bet, but it washed out when we don't pay them for a 4 or 5 month period when they don't do alot for us. Just our experience. Do they get us back? Yes, but on our terms not theirs. Also, hold out for price, I drag them until the last week of the month and have gotten where I needed to be with them, timing is what it's all about. If more dealers did this they would feel the pressure eventually, it would bury them for the fourth and critical quarter. Hold out on price they will cave eventually.