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Beepi and Vroom and Carvana - will they make a DENT?

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#51
Clay Toporski said:
There is a reason anecdotal evidence doesn't pass scientific muster. Don't succumb to making broad generalizations based on the evidence of a few personal experiences because that's bad science.
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Keep in mind that this is a discussion forum, not a research paper. We all have opinions.
If you're going to say that "Dealers are bad" is outdated than you best back that up as well.
I manage an issue tracking software for dealerships so I get to see a very high percentage of their complaints and I hate to tell you, but not every person that buys a car was happy about it. I can also pull down the Sales CSI scores for dozens of dealers and show you quite a few dealers who are absolutely "bad". They're not all bad and they're certainly not all good, I have plenty of examples of both.
 
#52
craigh said:
Keep in mind that this is a discussion forum, not a research paper. We all have opinions.
If you're going to say that "Dealers are bad" is outdated than you best back that up as well.
I manage an issue tracking software for dealerships so I get to see a very high percentage of their complaints and I hate to tell you, but not every person that buys a car was happy about it. I can also pull down the Sales CSI scores for dozens of dealers and show you quite a few dealers who are absolutely "bad". They're not all bad and they're certainly not all good, I have plenty of examples of both.
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If you are trying to make a point using an opinion, then it's a bad point and not even worth mentioning because opinions don't matter. Research paper or not, anecdotal evidence is useless for any discussion. That would be like me saying all customers as jerks because I've had a couple jerk customers or all vendors are worthless because I've had a couple worthless vendors. If you want to state a fact, state a fact. If you want to state an opinion as a fact, then you are wasting your time and everyone else's.
 
#53
While we (dealers) like our current way of doing business and we'd really love to go back 20 years to when held all the knowledge (what cars are available and what they are worth), customers seem hungry for a change.
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Based on research - The Autotrader Car Buyer of the Future Study
 
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#54
Chris Cachor said:
...I understand sales tactics but not straight up lying to your customer. Sure it's a small sample size, but the ol' switcharoo on the interest rate is a complaint I hear far too often.
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Brother Chris, here's my take:unclejoe:.

When I first got into this biz, to my astonishment I discovered "Buyers are Liars"*. DealerRefresh blog post (below) sheds light on the shoppers role in this crazy dance

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A Dark Cloud Over the Dealership Industry

The dark cloud over the dealership industry has got to be one of the most fascinating studies in business psychology ever. About 4 weeks ago, I’m havin’ a beer at a house party at my place, and my neighbor is talking about his new ride:

neighbor: “It drives me nuts, why can’t car dealers just post their lowest price? They force me to negotiate”
me: “you shopped on the internet and you visited the dealer with the lowest price… right?”​

neighbor: “yea…”
me: “did you buy it, or, did you ask for a lower price?”​

neighbor: “well… I offered a lower price to close the deal that day”
me: “I see, it was YOU wanted to negotiate a lower price, so, it was you that forced the dealer into negotiations…”​

neighbor: [silence], then [mumbling], then [back peddling],
me: “still holding on to the idea that dealers are bad? Think about this. Would you be happier if Verizon’s store managers competed against each other and you could get a discount on your phone AND your cell bill?”​

neighbor: “yea, that would be cool”
me: “this is how car dealers work, they FIGHT EACH OTHER for your business!”​

neighbor: [silence]
me: “think about it. If you bought a Tesla, do you think they’ll ever cut your a deal?”​

neighbor: “nope”
me: “Game. Set. Match.”​

The anti-car dealer fever is generations old, yet NO ONE has updated how the Internet has blown up the old model. The tide has turned, car shoppers have enormous power.

Everyone! Buyers are selfish. Let go of the Urban Legend!

Be apart of this conversation over in the dealer forums.​
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*link: one of my 1st blog posts : Evil Dealers & the Slaughter of the Innocents
 
#55
Clay Toporski said:
If you want to state an opinion as a fact, then you are wasting your time and everyone else's.
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Some of the opinions in these forums are more valuable than the "facts" you'll find.
I've read dozens and dozens of whitepapers, studies and other informational releases in the past year and they all conflict and collide and provide false assumptions.
 
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#57
Let's talk about another disruptor in the industry: TrueCar. Can anyone explain how TrueCar has made pricing more transparent, average gross profit considerable less on new cars and yet hasn't made the car buying process easier for customer or made customers happier?

In theory, it should be easy, right? Customers get three prices from three dealers - one is the best - they verify they have a car the customer will purchase and they make the purchase. In practice, this doesn't happen. Customer beat up the dealers for more discounts or, even stranger, take their quotes to their local dealer and purchase for sometimes more money than the quote they have. Even more mysterious, in the above scenario, it is the customer that beats the dealer up for a better price that gives the worst CSI scores and the customer that pays MORE that is generally happier.

This is where as vendors, you probably don't understand that as an industry - the customers that pay MORE are HAPPIER. Why is this? It's because better prices does not equal happier customers. This is what the "dealers are bad" model of marketing tries to accomplish. This is why TrueCar needs to change their model. This is why websites that tout their competitive advantage of being cheaper don't work.

Customers tend to be happiest when they have an easy, quick and fair process. They want to be treated like they matter. They want to their time to not be wasted. They want their questions answered by vehicle experts. They want pricing consistent with what they have researched. They want things to make sense to them and be verified by third parties. The customers that work within this framework and receive this treatment end up being the happiest.

It appears most commenters are vendors. Unfortunately, you don't have any real insight into what happens in a showroom. You don't get to be on the dealer side of day to day negotiations and transactions. You don't get to see the struggle that happens between sales people and customers over pre-owned vehicles that are considerable less than market value.

It is a fact that pricing cars correctly, both new and used, does not necessarily correlate to more sales or an easier process for customers.
 
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#58
#59
Clay Toporski said:
Of course, those same customers that say that don't follow-up on their "survey responses". The tools are out there already. People aren't using them. The same people that say that they would do an entire purchase online also say that they need to test drive a car before purchasing. You can't have your cake and eat it too.
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Clay, I hesitated to post anything further because I am positive that it won't change your views.

But I must.

Just to recap your stance:

CarMax hasn't had a significant impact on the way dealers operate.

It took CarMax several years to reach profitability. You assume that the start-ups referenced in this thread will not get there based on a couple of years of results.

You want science not anecdotes but when presented with a study from Accenture you hesitate to accept the findings.

You are positive that better pricing doesn't lead to increased sales.

You are convinced that people who pay more are happier(I looked again but didn't see a study or white paper attached)

Vendors with access to hundreds if not thousands of dealership across the country know less about the market than a single dealer working in his or her store.

Those same dealers will somehow create the change needed to catch up to rapidly changing customer behavior before new companies like those discussed in this thread will.

I guess in looking at all of your feedback throughout this discussion I have come to one conclusion.

There are no doubt extremely bright, progressive dealers out there. I have worked for and with them. They will continue to adjust to the current market dynamics in order to survive. My opinion is that you are going to struggle to do so. You haven't accepted one shred of opinion or fact provided here.

Maybe it works today where you are. Maybe it continues for some time.
Maybe it never has to change.

Or maybe we are approaching a tipping point. Even in your market. A change that you can't see because you are so invested in defending your point of view.
 
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