What ways could dealers be more transparent, IDEAS anyone?

[bringles]

Something so simple yet effective. And not over thought.

We use a service that allows us to email all this information to the customer. Sending these packets is something I ride the salespeople hard on. I'm always encouraging them to print them out for the customer in the showroom as well.

Let's make an informed decisions.

This isn't rocket science....

Hi Jeff,

Thanks for your input. What is the name of the email service you use to send that info to the customer? I figure i could scan everything and attach it to an email, but if there is a way to save time and automate the process that would be helpful. I am a one man show, so i am limited on time.

On the subject of automation. Can you make any recommendations on software to automate the sales follow up process. I know there is a ton of CRMs out there. I am looking for one that is more along the lines of what an internet marketer would use. Automated Text and email follow up with list segmentation. For example, customer gets an initial text and or email after opt in. The first contact gathers basic info like when they plan to make a purchase, if they need a loan, etc. Based on their responses, the follow up is more time sensitive and helpful to both buyer and seller.

 

[bringles]

I think the benefits far outweigh the occasional issue like this, especially if your selling a quality car the odds are very low.

 

[Tallcool1]

Not disagreeing with the post @Jeff Kershner but years ago I had a client that did that, customer bought a car from him and engine blew up 6+ months later. Don't remember how old the car was, whether the customer didn't take care of the car, etc. But I remember that it came down to a judge that based on one of this booklets where the dealer described all that work and inspection that the car had to be missrepresented because otherwise it would have never passed all those awesome looking reports (in thr eyes of the judge). So all this info was used against the dealer.

I get what you are saying, but I am leaning more in the direction of @Jeff Kershner and @bringles on this. The point here is not the one time that some judge used the booklet against the dealer. The point here is the 100 times that the booklet sold the car.

 

[yagoparamo]

@Tallcool1 I wasn't trying to set any direction but just some food for thought that while transparency is good, it comes with certain liabilities. Liabilities in business have, unfortunately, a deep correlation to how they are written/presented. So being aware of these may allow you ro present things in a manner that while being transparent and forward about your product, it doesn't catch you back later.

 

[Tallcool1]

@Tallcool1 I wasn't trying to set any direction but just some food for thought that while transparency is good, it comes with certain liabilities. Liabilities in business have, unfortunately, a deep correlation to how they are written/presented. So being aware of these may allow you ro present things in a manner that while being transparent and forward about your product, it doesn't catch you back later.

I understood that you weren't implying that the binders not be used @yagoparamo .

Unfortunately, our industry is full of risks, and we as car dealers have to decide which risks are worth the potential reward.

On a side note, I am inclined to believe that the 3 ring binder IN AND OF ITSELF had absolutely no bearing on the outcome of the court case you mentioned. I would guess that there was something in the paperwork of the actual transaction that caused the dealer to assume responsibility for a failed component.

I know you were the messenger, and I believe you have delivered a good message.

 

[Martin_Bluecar]

I think it's not about being transparent. As you mentioned people don't mind paying crazy money for Apple products - it's because they love Apple - they can buy a smartphone for a half of the price with very similar specs. Apple is a great example so I'm gonna stick with it. People know the story of Apple, its ups and downs, they know Steve Jobs - they feel like they're very close to Apple. Car dealers have to do the same thing - they have to make people know them. The best way to do so is social media - dealers have to be active, post photos of the dealership when they're going to work on Monday, photos of the staff having lunch, some interesting facts/stats about the city/area, about cars they sell, some (car) jokes, etc. This will make the relationship between dealers and clients more personal - they will start to trust the dealership.

People think dealerships care just about the money, and most dealership's current social network posts just support this - it's often just photos of cars from their inventory and the number you can reach them at if you want to buy. Social Media Marketing is far from expensive, even though car dealers still ignore it and they better spend thousands on TV ads (about cars they sell) and then they're surprised it doesn't work. Sure it doesn't, people know they sell cars - they have to see the story behind the dealership.

 

[autohitch]

Opinion coming here so take it easy on me!

I see mentions to companies like Apple and although dealerships being like Apple stores would be great not many see it as a possibility. Some dealers can dedicate their store to that sort of experience, and I'm sure they will benefit from it, but it will probably never be used enough that the consumer base as a whole starts reporting that car dealership visits are as enjoyable as getting a new phone. What you may be onto though is that the solution isn't just one small change here or there. If your problem is an experience you have to tinker around with many fixes and see what plays out well in reviews or surveys. Even then, what works in one market may not work in another, so the challenge is shaping up to be that all dealers need to make multiple, yet unique changes that alter the experience nationwide.

So, is Transparency one of those changes? Well, Gurus has been on the transparency train for about 10 years now and the results "seems" to be the facilitation of higher volumes with lower margins. It's really not hard to see why right? You have a big color-coded price analysis, followed by a grade of your price, paired with a really solid SEO strategy that drives in shoppers. Dealers margins have certainly shrunk in that time so the consumers must be happier than ever but as Wayne and Garth would have said, "NOT". I doubt (Opinion) that a deeper commitment to providing even further inside information is going to result in anything but more of the same, and something tells me that the 3rd parties that have made hundreds of millions putting out that information won't see putting out more as hundreds of millions more. Will the dealers go along to increase leads and feed the volume machine, or will they draw a line like they did with truecar a few years back and say, "Enough with Transparency"? One telling report that came out recently showed that marketers and dealers, in just the past year, switched their priority from increasing lead volume to increasing lead conversion. That (Another opinion) suggests to us that these 3rd parties have become too good at capturing and sending leads and that many dealers are feeling that in the numbers.

Our (Yes another opinion) feeling is that transparency doesn't need to end or grow, it needs a redefining. Let me set the stage here: That same report about incoming leads also found that prospecting and qualifying were the #1 and #2 most frustrating tasks in the process and that almost all the time the only information available was basic contact information. About half knew the vehicle they were interested in. So, if transparency worked to solve some of the pain points of the consumer, why couldn't it do the same for the dealer? Most people never even consider heading down that road because many assume more information about a lead means more personal information, and who is willing to trust car dealers with that? But, most companies that build these 3rd party products are made up of people who never personally sold a car a day in their life and at best are simply an owner/ investor in a chain or large group of dealerships. Yes, there are exceptions and that's why I used the word "Most". The point I don't want anyone to miss though is that if you haven't recently spent time in the trenches of selling cars, you either lack or have lost some perspective on what's important to making a sale and may think too much like a consumer. In this instance, as a dealer on the ground, you would know that in a scenario where 3 people inquire via email about the same car, although your system brings those leads in as equals, they are likely far from it. There are many variables but two of the most common is that one lead is probably far more interested in your vehicle than anything else they have found, and are capable of buying quickly. Conversely, you can be sure that one of those leads is probably a shopper who has contacted a massive amount of dealerships about similar cars, hoping more for the ultimate bargain than the ideal vehicle. Unfortunately for you, the only way you find this out is with time and effort. You either have to weed through some conversation with all 3 or send out a couple of emails and just realize when you don't hear back that you can move on. But what if you had information from day one that could tell you who was more likely to be hot on your car and who was simply sending out a teaser? That sort of "Transparency" could be very useful in a world where the leads pile up quickly and the cost of going through them continues to rise.

Like truecar discovered a few years back, there is a way to delicately balance providing transparency, and giving away secrets. The consumer wants their anonymity and is in no way interested in what they do today resulting in 20 calls tomorrow or even a month from now for that matter. Giving one side information about the other isn't acceptable unless you can convey to the side you are taking it from that it is in their best interest. That's how transparency should be expanded and if it is it should result in not only an improved experience for consumers but also for dealers. That's what we are hoping to deliver....

 

[ruggles]

Great article be I respectfully disagree with the following statement: "Our (Yes another opinion) feeling is that transparency doesn't need to end or grow, it needs a redefining."

Despite efforts by the self serving in our business, the definition of "transparency" NEVER changed. It was hijacked and used as a marketing ruse. Consumers NEVER believed it, as you point out. Only the most gullible in our business believed it. In our business true transparency is when BOTH parties in the transaction have the same information AND equal ability to interpret it. In that case, the product becomes a commodity, which eliminates the "middle man." Yes, that's the dealer. And that is called "disintermediation."

Let's be clear. That's what it is. Period. Dale Pollak notwithstanding. Dale brilliantly points out in his books that transparency leads to an "efficient market." For some reason, he forgot to mention the disintermediation part.

 

[autohitch]

Well, although I don't disagree that true transparency is the 100% divestment of any and all information, I don't necessarily alter my stance on how it "should" be re-defined in our industry.

Before the marketing push, transparency was defined as literally as you wrote it. The problem was reality was so far off in the distance it didn't help or hurt anyone if it was never tried. So along come improvements in technology and companies, ironically that dealers pay a ton of money, that decided they could turn "Transparency" into reality, or at least something they could make feel like reality. The cat's out of the bag (The definition) and getting it back in can't happen by reminding everyone the bag is where it belongs, which is what I think a more literal definition does. What you could say we suggest, which is me really pushing this analogy too far, is that we re-train the cat so that it's not clawing the hell out of us. This is tricky because it takes convincing the benefactor of modern transparency that they can actually benefit more by loosening their grip on it. You could say that's us getting the owner of the cat to let us train it (I know, I know, I'm done with the cat analogy I promise).

The point, which may have been lost in that darn analogy, is that if it's between being accurate and realistic we should choose to be realistic. We know that a buyer paying a lower price isn't the end all be all determining factor for a good vs. a bad deal in their minds. Margins continue to fall while consumer surveys remain as negative as ever. It was a similar pain threshold that lead to the willingness of the consumer in the first place to accept anyone's promise of something better and run with it. The consumer again appears to have arrived at a point, likely due to societal changes from tech advancements and the aging of millennials, that they are ready to try something new again. If we are going to do our own defining it will need to be a group effort, "United we stand divided we fall" right? A company like Gurus can make such a change without any of us having a say and if we ignore it eventually it becomes a "get on or get left behind" decision for dealers. I say we get out in front of it this time so it's not about dealers going to where the consumers are, it's both sides coming together on a neutral field like the Florida Gators and Georgia do when they play in Jacksonville. I know, I love my analogies.

 

[ruggles]

I fail to understand what the big deal is. Consumers don't deserve transparency. Does anyone think we should know the raw wholesale price of a head of lettuce at the grocery store? So what if consumers answer survey questions that aren't complimentary to us. Which is more important. They love us and we make no money, or they're skeptical and we do. Those are the same choices that have existed in commerce where the price has to be negotiated and the parties don't have the same information. If one doesn't have the stomach for it, they should probably fins another business. The only reason this became an issue is when the third party vendors started running self serving surveys that convinced the naive that we can make money by being transparent if we just sign up for their program. Real veterans of the business know consumers behave differently than they answer survey questions. Bottom Line: there are ways to negotiate deals and still have reasonable CSI scores, but you can't please everyone and you'll never be able to completely satisfy consumers. They aren't business people. They mostly work for a salary and don't employ people or pay interest on inventory. Why turn yourself inside out trying to satisfy those who can't be satisfied?

For example: I've conducted many seminars and addressed numerous groups of both industry people AND consumers. When I ask attendees what they think would be a reasonable return for a dealer on a $30K car, most agree that 8 - 10% is fair. A few minutes later I'll ask, what if you got home and your uncle showed you where the dealer had gotten to you for $3K on your recent car deal. Thieves and robbers are some of the nicer terms I hear.

My generation thought it would change the world. As we grew up, we discovered one first needs to learn how to live in the world the way it is before one can effect change. By then, you realize many things are the way they are for good reason. Same with our retail auto industry. It is what it is. The negotiation is what sets our business apart from small ticket items and gadgets like iPhones that one can stick in the mail. Negotiation is also what consumers hate the most. And if you give them your best price to shop, they'll use it against you. If you give them your "best price," then you vary from that to make a deal, you're a liar. AND you open yourself up to legal action, as was pointed out by auto business legal eagle Tom Hudson.

The current market is strong. There are fewer dealers doing record volume. Record low interest rates for finance and floor plan abound. One Price has some practitioners making money. Wait until we get back to a more historical market with REAL interest rates and more dealers on board to add competition. When we get down to the "nut cutting" again, every dollar of every deal will count more and substandard weak practices will go on the wane again.