What ways could dealers be more transparent, IDEAS anyone?

[ed.brooks]

My buyer has to, and needs to trust me. Your definition of trust/faith states that it is not based upon proof, yet your method of building credibility is Market-Based Proof. They are one in the same, and necessary. FOR THE MOST PART, customers will not buy from me unless they trust me. Sure, if I have a giveaway type of order taker price on a vehicle the customer may not care. That is the rare exception, not the rule.

Personally, I believe that the level of talent required to sell for your asking price is directly related to the pricing structure that the individual store uses. If you are in a vAuto type of store that aggressively chases the turns, and the vehicle is a 50 day unit that is priced to just get rid of it......it is a clerk's job. If you are pricing your cars at 5% over Retail, you aren't going to get your asking price (generally speaking) and you better be good at negotiation. It all ties back to the gross profit that the individual store is trying to attain.

Anyway, lots of good information in this thread.

Oh, one more thing...I don't know how we can be more transparent. I can however share a link to a dealer's website that in my opinion is about as transparent as it gets. Look at their Shares Program and the vAuto powered Real Deal thing.

http://www.truworthauto.com/default.aspx

I will restate the fact that I find the whole "clerk" thing disparaging and completely unfounded. And yes, I've spent years drinking the "vAuto Kool Aid", so take this for what it's worth.

More gross, more volume, LESS negotiation. Clerks can't do that, Sales Professionals can.

 

[ruggles]

RE: "Your goal doesn't have to be trust, but it should be credibility."

Yes. this is accomplished customer by customer. There is no strategy that will satisfy the market as a whole. Never has been, never will be.

RE: "Credibility, on the other hand, can be gained thru two paths; Negotiation or Market-Based Proof. Neither relies on a need to disclose your profit structure."

"Transparency" requires disclosing your profit structure. What do you think transparency is? Are we in the business for the transparency, or to make money?

If a little relative transparency is good, more should be better, right? Why be relatively transparent when you can be completely and entirely transparent? Consumers believe our claims of transparency, right?

 

[ed.brooks]

RE: "Your goal doesn't have to be trust, but it should be credibility."

Yes. this is accomplished customer by customer. There is no strategy that will satisfy the market as a whole. Never has been, never will be.

RE: "Credibility, on the other hand, can be gained thru two paths; Negotiation or Market-Based Proof. Neither relies on a need to disclose your profit structure."

"Transparency" requires disclosing your profit structure. What do you think transparency is? Are we in the business for the transparency, or to make money?

If a little relative transparency is good, more should be better, right? Why be relatively transparent when you can be completely and entirely transparent? Consumers believe our claims of transparency, right?

Complete transparency is a rather silly concept. It's akin to pulling your pants down and showing the world what you have - and no one wants to see that, right David?

I don't see dealers talking about transparency with customers. Not in their advertising, not their conversations. But I do see dealers being more open and honest with customers winning in the marketplace.

 

[ruggles]

Yes, transparency is a completely silly concept as it regards auto retail. One wonder why the word has become the new buzz word term. Consumers don't believe it and neither do we. So why is everyone using the word when all they are talking about is "relative transparency?"

But your analogy about pulling one's pants down misses the point. That is EXACTLY what the buyer wants to see. So I'll prove it with my own informal surveys. "Mr. and Mrs Consumer, IF you had the choice between knowing the TRUTHFULLY and ACCURATE dealer net cost or NOT knowing the same, which would you choose?"

Again, if a little transparency is good, more is better, right? The relative transparency being bandied about is nothing more than another strategy of negotiation. Perception of honesty and openness is what has allowed us to earn consumer's business since the beginning of auto retail. And we earn that consumer by consumer, not by trying to elevate our industry image with consumers overall. What we try to do is differentiate ourselves. If everyone is the same, no one has an advantage.

 

[ed.brooks]

It IS about differentiation, but it's not necessarily about negotiation - at all. Credibility doesn't depend on a dealer disclosing cost - at all. Consumers don't want or need to see cost. They do want make sure they are getting a fair deal - even a good deal. I'll say it again, credibility can be gained thru two paths; Negotiation or Market-Based Proof. Neither relies on a need to disclose your profit structure.

 

[Tallcool1]

@Ed Brooks

I was not trying to take a swipe at vAuto. I have seen first hand what vAuto can do in some stores.

The point that I was trying to make is when a given vehicle is priced absolutely in the "basement" because it is time for it to go away, there isn't much price justification to it. Here is the car, it is the cheapest one out there by a far cry, you guys already know that, so the price is the price. Take it or leave it. Sure you still have to show the vehicle, and demonstrate and answer any questions.

 

[ed.brooks]

@Ed Brooks

I was not trying to take a swipe at vAuto. I have seen first hand what vAuto can do in some stores.

The point that I was trying to make is when a given vehicle is priced absolutely in the "basement" because it is time for it to go away, there isn't much price justification to it. Here is the car, it is the cheapest one out there by a far cry, you guys already know that, so the price is the price. Take it or leave it. Sure you still have to show the vehicle, and demonstrate and answer any questions.

While I did work for vAuto for years, I am not currently an employee. That said, vAuto is not about being in the "basement" with the lowest pricing in the market, from my experience. It is about having a clearer picture of the supply and demand situation on each individual car to fuel better decision making, including both stocking and pricing. The Performance Toyota case study is a great example of a dealership employing a comprehensive pricing strategy and winning in the marketplace. And yes, that strategy is a bit more "transparent" than some of their competition's.

And I didn't think you were taking a swipe Clint

 

[ruggles]

RE: "Credibility doesn't depend on a dealer disclosing cost."

Certainly not, but again you are using the term in a relative way. Absolute transparency involves disclosing actual triple net cost. Anything else is relatively transparent and harms credibility more than it helps it. Claiming transparency indicates to a consumer you actually are.

But do the math for me. You want to charge everyone the same margin. You don't get the fat deals because you don't ask for them and you pass the cheap deals. How does that math work out. Are you claiming to make it up in volume?

 

[ed.brooks]

We've discussed this for years @ruggles and frankly, I don't see either of us changing our minds.
My parting thought is, don't get your knickers in a twist over the margins, the extremes. Yes, you will miss some potential home runs and yes you will pass on some cheap deals - they are at the edges of the bell curve. Embrace the fat, juicy center where both the volume and the bulk of the profit is...

 

[ruggles]

Ed - The very deals you eschew make up your bottom line and cost you market penetration. With all due respect, there is nothing like owning and operating one of these stores to bring these truths home.