Special Internet Pricing?

[Richard (blog)]

The bigger the ticket item, the more mistrust consumers have. It's hard to compare a product at Best Buy or a meal at a restaurant to a car. They are so far apart in price.

Also, the bigger the price, the mare wary the consumer is. Face it, cars are the second highest priced items right behind homes and there will always be a level of mis-trust. The more we put the consumer at ease, the better. There are too many choices that are just a click away

Alex, I think you are right on in your first paragraph. I couldn't agree with you more! As far as your final comment, you may feel they hate your guts but be glad you aren't a mortgage broker right now...

 

[Frank Davis]

Just cannot help myself on this one.

Alex said

"no such thing as an Internet customer - they're all Internet customers....or they're all the same people who have been walking into your store forever if you prefer that definition. Creating two different customer types is just stupid,"

All customers are not the same, there are many types of shoppers and then there are some that do not shop at all the are impulse buyers that drive in and buy. So call me "just stupid" if you like but if I can sell one G6 for 12,995.00 and another for 16,995.00 I am going to do just that, but you would make sure both sell for 12,995.00? No one has created these shoppers at all, we are all creatures of our own habits. As a manager or salesman it is our job to maximize profits for the store and our family.

Just another opinion

 

[Alex Snyder (blog)]

Frank - you misinterpreted what I wrote. All I was saying is that if you display a price online, you should honor it on the lot and vice versa. The simple answer is to price all your online vehicles at whatever your sticker price is (new & used), and work each person making an Internet inquiry close to the same way you would someone who walks in the door. Now you're not dealing in separate pricing, and every customer is unique.

 

[Billy]

I'm with Frank on this one. Minimizing your profit/gross is not something I've heard in any of our meetings since I've been in the car business.

In order to be competitive on the internet, you must price aggressively. If you don't, you may as well not be there. Providing an internet special for a customer viewing your inventory on the internet is not a bad thing. We give discounts to employees, clubs, groups, etc... every day.

Having said that, only a certain amount of vehicles in our online inventory are discounted from the "regular" price. Typically for us it's 40%. The rest are the same price regardless if an internet customer or a walk/drive/phone-up

 

[Wayne Anderson]

Several of you have different opinions about pricing, and you all may be correct. There is not a single pricing strategy that works in all situations/markets.

I know firsthand that pricing strategies work different in the Special Finance Markets (a rapidly growing market BTW). These folks are more concerned about obtaining financing. Price is not their top concern, at first. Payment is more important than price in this market.

Also, are you a volume store or high gross store? Many will say, "we want both." But having it both ways is not realistic.

We prefer high gross - you can always come down in price to scoop up the prime, but you can't go up.

 

[Brian in Etown]

OK since nobody liked my restaurant comparison how about real estate?
If one person prices a house at appraised value, one below appraisal and one above will the buyer still negotiate on all three? I would think a since of value would need to be established for a sale to occur? Is this a better comparison?

 

[Brian in Etown]

Ok I typed that a little fast and realized I made a mistake, I meant a sense of value has to be established before a sale can occur,
pricing does not matter if someone does not see the value.
We need great photos, great descriptions and strong follow up skills.
I have been looking at houses and made a offer the other day just because "it's a buyers market" needless to say it got flat turned down.
I based my offer on whatever they were asking minus 20K, after all "it's a buyers market".
The reason I liked it was because they had already reduced it to the bare minimum price and thousands below appraised value, basically it was quite a bit of land and house for a great starting price. I thought I could still deal on it because they seemed desperate and it had been on the market for over six months. No luck, they said they would not budge a dollar. So much for being a buyers market!

 

[Lightnup (blog)]

Great comments. Great topic. I'm surprised at how dealers worry about losing gross online, yet week-in and week-out they'll put their inventory in the newspaper & weekly shopper mag at prices often thousands below their Internet prices. Shouldn't there be better coordination between the Internet Department and the Newspaper & Magazine Department?

To Alex Snyder's point, they ARE all the same customers, it's just a matter of which advertising medium they have used to see your inventory. If prices are different from one medium to another (including walking on the lot) it only reinforces the mistrust that consumers already have with car dealers. IMHO, of course.

 

[Paul Rushing]

In my experience offering the free prize for the shoppers that stand up and identify themselves can pay off in spades. Make your offers entice the consumer to want to do business with you first and foremost.

Work on building your brand then the brand of those that you work for with secondary.

 

[Mike@Carfeine]

Speaking from a customers perspective I want simplicity.

I want to do a Google search for the exact vehicle I'm looking for and be presented with the same result sequence as I get when I search for a pair of new home theater speakers, etc.

Alex is dead on - the lines between off line and online are already gone. Embrace the change and run with it... what always pisses someone off and ensures a non-repeat buyer is when ignorance is preyed on to the benefit of the retail dealer (of any product) and the buyer feels taken advantage of.