Internet Pricing ___________________________________________Sean Bradley & Joe Turner
I would like to start by saying that even though there is always more than one way to do something, there is always a better way, the right way. Last issue in the Dealerskins newsletter there was advice given that I felt was incorrect and damaging to those Internet/BDC managers who don't know any better and try what they are reading and then ultimately fall short.
The advice stated that it was a good idea to put the invoice and MSRP on the website for the customers. Joe stated, "We all realize that with all the information sites out there today your customer has probably already got the invoice information. Why not include the invoice and MSRP as well as your Internet price for a comparable model that you have in your inventory"? Well for starters are you going to hand every floor customer that walks in the dealership an invoice of the vehicle that they are interested in? Because as we all know 83% of everybody that purchases a vehicle in the United States has done some sort of research on the Internet before they purchased their car. Over 50% of people who purchased a vehicle in the U.S. have been to either Edmunds.com or KBB.com. SO WHAT. An Up is an UP. Whether they call on the phone, send an email, or simply walk in, they are a prospective buyer. Bottom Line, we constantly overcomplicate the situation with stuff that sounds good but in reality doesn't really make sense.
My beef is simple. Why are we going to give any prices other than MSRP before we qualify a customer?? Yes, they can go to numerous sites and find this information. They can even go to configurator on a Dealerskins website (mine included) and build a car and see cost. That I feel is not a problem. My problem is putting an invoice price on your inventory page, or sending emails to customers that are templated with a 100 over invoice or here is invoice this is the "Internet Price"… or here is invoice make me an offer… This is in my opinion weak. Let me clarify, I am not suggesting not disclosing invoice or giving an "Internet Price." What I am saying is absolutely not to do this before you had a chance to qualify your prospect. Again same as in the showroom I am sure we all have sold vehicles at cost or below at one time or another but we worked the deal first. By giving an immediate invoice figure you are giving up the opportunity of making any type of gross. And that is simply ridiculous. You can run a very successful Internet Department in Volume and Gross, Yes I said Volume & Gross.
Joe did say something that I agree with; you need a process, a Standard Operating Procedure. But you need one that is designed to make money not simply to give away units. There are so many reasons for people to be going on the Internet, not all of them are price. Some people are searching for a specific unit, convenience, tired of the old school dinosaurs, the "Al Bundy"s in our industry," Whatever and YES of course price shoppers but even then those people can be pacified and brought into the dealership w/o giving up the gross. You need professionals on the phone, not "telemarketers", or weak sales people. You need Pros that can handle objections fluidly, know product knowledge and are good conversationalists. YOU DO NOT need to devaluate your product or your process by giving gross away. I do this everyday of my career, as well as all my staff that I have trained. We are averaging about $2,000 a copy on INTERNET customers, last month we closed with 62 units online. Does it work with everybody? Of course not, but I am not trying to close everybody I am shooting for a 10-15% closing ratio. Lets do the math 632 leads, 62 units sold and delivered at $1,956 per copy = $121,272 Gross profit with an initial investment of less than $14,500 I just took over this store 2 months ago before I got here they did about 18 units a month on the Net, 2 months later 62 units… with gross! I had at least 5 or six deals last month that were at cost or triple net and still made the average gross what it was. I had 5 deals last month over $4,300 dollars. And on and on it goes.
My steps in the Internet Phone Process are simple:
I am going to close with a quick story. I was a BDC Director at a dealership in NJ before Cherry Hill Nissan and I was on the phone with a customer. During the conversation I established a good connection with the woman and went for the appointment. She told me that she would love to come in but she just gave birth to a little girl a couple of days before, and didn't want to take the baby out of the house yet. After I congratulated her, without skipping a beat I offered to bring the SUV she was interested to her house to view. She was astonished at the offer to say the least and happily agreed. She was so surprised to offer that type of service. I told her that I was personally going to go to her house myself and go over the vehicle with her. So I got one of my sales consultants and we headed over to her house but I made a quick stop at the florist and picked up a bouquet of flowers and congratulations balloons!! When we arrived at her house and she opened the door she was visibly surprised and so very appreciative, she made us coffee and we chatted for at least 15 minutes before we even spoke a word about the SUV. I did a full product presentation for her, then she actually asked me to keep an eye on her daughter (who was sleeping in her crib) while she took the SUV around the block real quick. Well to say that the woman was seriously surprised with her experience and treatment from us she decided to go ahead and lease that SUV. We did everything right there in her kitchen over coffee. I then went back to the dealership had finance bill the deal out, went back to her house with a chase car, signed her up and delivered the unit.
Bottom line is we exceeded her expectations by far. We made serious gross on that deal and a happy customer, that is going to tell everyone that will listen about her incredible experience with a car dealer.
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