- Dec 30, 2009
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- Yago
Online Pricing Myths Debunked
- Thread starter JessicaRuth
- Start date
- Oct 29, 2009
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- Rick
@Yago- That's funny!
I did have a question for ppl reading this thread. Should you price every vehicle in your new vehicle inventory or should you price a select few? Loss leaders so to speak... Do you think it would increase leads by doing it this way( customers submitting leads wanting a price / quote on the vehicles that aren't priced). If you've tested this, please chime in with your results.
I did have a question for ppl reading this thread. Should you price every vehicle in your new vehicle inventory or should you price a select few? Loss leaders so to speak... Do you think it would increase leads by doing it this way( customers submitting leads wanting a price / quote on the vehicles that aren't priced). If you've tested this, please chime in with your results.
I would be ecstatic if our competition priced new cars at invoice. Around here, it's more like 1000-2000 BELOW invoice on most new cars, depending on the model.
We have to do the same, of course... or traffic completely dies. It's tough to make sense of deals when you start that far in the hole.
Rick, I say price it all, consumer may wonder why you price some but not others, which could be what they are interested in and they may move on. Zappos prices every shoe, not just the cheap ones.
We are in the process of pricing all our inventory online. We have done this several times and each with different results. This time we are pricing it through Dealer Specialties, not just one web site, so all our pricing is mirrored across our digital footprint.
As to customers submitting leads with online priced vehicles, we emphasize that they may qualify for additional rebates or incentives, and to please request a sales price so we can get them the exact price they may qualify for.
Will let you all know how it goes.
- Sep 30, 2010
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- Bill
After seeing the ATC presentation at DSES, I have been trying to get our stores on-board with online pricing. The key stats from the ATC presentation were: 1 - vehicles priced below MSRP receive 34% more VDP's, 2 - dealers who list below MSRP capture 20% more buyers, 3 - buyers will drive further to see a vehicle priced below MSRP versus the local dealer who has the car listed at MSRP. I convinced one of our Toyota stores to give it a try and my initial evaluation is it was a success. For the numbers in the chart below to make sense, I need to point out that the store on the right normally crushes the store on the left in VDP views, time on site etc. It is in a larger market and receives more website traffic as a result of that. These numbers are for the 5 day period of November 27th, through December 2nd for the Toyota Black Friday sale. The only difference in this 5 day period is that the store on the left priced their vehicles below MSRP and the store on the right did not. I don't want to get too far ahead of myself and declare the pricing strategy a roaring success, but do believe that these numbers prove an impact. Thoughts?
- Dec 4, 2013
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- Broderick
You do not have to come down to your competitor's level of pricing. I have never price a car online to loss money in the 13 years I have been doing this. Take the time to take really good photos of your cars, make the time to do vid's, take the time to make everyone fill welcome to your store. Even if you have to hire someone to do the pics and vids it will always be worth it to you. I am not saying leave your cars at MSRP but you do not need to be at invoice. Most stores fail with the photos of the cars. If you take really good photos you will win most of the time.
When you do vids include some of the store and everyone just being themselves. There is nothing better than customers being able to see that real people work at the store, that you have fun at the store, and that the store is a family. The best remarks I every got from customers is when they saw our video's of the guys just messing around in parts, or clean up, or joking with each other on the showroom floor. Caught a couple of those moments on vid and put them on our site and others. You do not always have to be a dealership to a customer but a place they can come and know they will get good advice and be taken care of. Yes they want a good price, but they want to be taken care of by great people first.
When you do vids include some of the store and everyone just being themselves. There is nothing better than customers being able to see that real people work at the store, that you have fun at the store, and that the store is a family. The best remarks I every got from customers is when they saw our video's of the guys just messing around in parts, or clean up, or joking with each other on the showroom floor. Caught a couple of those moments on vid and put them on our site and others. You do not always have to be a dealership to a customer but a place they can come and know they will get good advice and be taken care of. Yes they want a good price, but they want to be taken care of by great people first.
- May 30, 2013
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- Sean
As a representative of CarGurus, a site that focuses pretty heavily on vehicle pricing, I can't agree with you more, Broderick. We find both in traffic pattern, and from anecdotes from consumers, being the lowest price in your market isn't necessary. We even hear from consumers that they sometimes don't trust the lowest priced cars, assuming that there has to be a catch. While most of our site's consumers are searching for used cars, the same holds true on new car. You don't have to be the cheapest, just don't be the most expensive. Consumers just want a real price, and a real photo (or video) on everything.
At the end of the day, as you correctly have pointed out, its about making a listing on a website into a real car being sold by real people. I love that you take videos of all of the people at the store, that's awesome. The absolute worst performance we see (obviously) is the combination of no reviews, no photos, and "contact me for pricing" which listing MSRP is basically saying the same thing. Yes, you've advertised that the car exists, but you've given the consumer absolutely no reason to reach out to you.
At the end of the day, as you correctly have pointed out, its about making a listing on a website into a real car being sold by real people. I love that you take videos of all of the people at the store, that's awesome. The absolute worst performance we see (obviously) is the combination of no reviews, no photos, and "contact me for pricing" which listing MSRP is basically saying the same thing. Yes, you've advertised that the car exists, but you've given the consumer absolutely no reason to reach out to you.
Price the cars??? We won't make any gross!!!
Are there dealers that still believe that they control the information on new vehicles costs?
Not only do most customers know more about your cars than most salespeople, they know as much about the invoice. Accept it, there are no secrets here.
Transparency sells cars.
Consider your three largest variable expenses: Salespeople compensation, floor plan and advertising. Adjust those to relate to the increase in internet business. Focus on how you can still make money: under allowance, switch to leases, maximize F&I and sell accessories.
Said before ...price only the cars you want to sell.
Are there dealers that still believe that they control the information on new vehicles costs?
Not only do most customers know more about your cars than most salespeople, they know as much about the invoice. Accept it, there are no secrets here.
Transparency sells cars.
Consider your three largest variable expenses: Salespeople compensation, floor plan and advertising. Adjust those to relate to the increase in internet business. Focus on how you can still make money: under allowance, switch to leases, maximize F&I and sell accessories.
Said before ...price only the cars you want to sell.
- May 1, 2006
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- Alex
Yes. Most.
Our industry is deeply indoctrinated by training and practices that are over 100 years old. Practices that stretch back to the days when we sold horses; long before cars. Because the car purchase still has to happen within a showroom many desk managers, and executives who came-up on the desk, have strong connections to the Up Bus.
They understand the Internet is the influencer of the customer. They understand pricing and trade values are fully available online. They have also noticed the customer isn't walking hand-written worksheets in asking for a better deal than down the street as much as they used to.
What they haven't done is connected those dots. Nor has word permeated, through the ranks, that the average consumer is visiting over 20 different web sites, over a period of 90 days, before visiting a dealership. They are beginning to see that customers are not traveling to 3 different dealerships now, but choosing to come to 1 where they did a lot of the negotiation and selecting before showing up. But, like I said, haven't connected all the dots.
Truth is, the consumer is forcing the competition to happen online; not in the store. And that's the piece the traditional car guys don't want to acknowledge. Your web presence (including pricing) sells the opportunity for your sales staff to up that customer.
@Broderick - Your post makes a lot of sense, to a point. You're right - you don't need to be the lowest priced dealer to sell cars, especially if you're personable.
However.
I'm not sure that personality can overcome $1500-$2000 on a car deal on a regular basis. Let's say I price my new cars at, say, $100 over invoice. Several of my local competitors price the same car at $2000 *less* than invoice. I don't think all the personality and fun in the world can overcome a $2100 difference. $300-400? Sure. $2000? I'm much, much less sure.
However.
I'm not sure that personality can overcome $1500-$2000 on a car deal on a regular basis. Let's say I price my new cars at, say, $100 over invoice. Several of my local competitors price the same car at $2000 *less* than invoice. I don't think all the personality and fun in the world can overcome a $2100 difference. $300-400? Sure. $2000? I'm much, much less sure.
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