By Steve Finlay, Ward’s Dealer Business
Some car dealership websites frighten Todd Smith.
“It’s scary when you see a site with no specials, no pricing, nothing to engage the visitor,” says Smith, a former general manager of a Chevrolet dealership and now president of ActivEngage Inc., creator of an automotive live-chat system.
Merely loading up a website doesn’t further the cause of trying to move the internet user toward the dealership and an ultimate purchase.
Some websites are so information-laden, they push away, rather than draw in car shoppers, Smith says. “Information is important but give it to customers in bite-size pieces, rather than, ‘Here are 87 videos of cars.'”
More to his liking are engaging websites that are search friendly, link back to the dealership, pull people in “and get them to act.”
Smith joined other auto retailing experts for a panel discussion provocatively titled “New and Creative Ways to Steal Share from Your Competition” at the second annual Ward’s Automotive Spring Training Conference in Tampa, Fla. As if the larcenous-sounding theme isn’t enticing enough, panelist Dale Pollak said, “I’m going to speak the unspeakable.” He proceeds to advocate a modern version of value pricing that precludes negotiating.
That means not only convincing customers that vehicles are properly priced in the first place, but also persuading the sales staff so they don’t partake in sticker-dicker tactics.
“If you price right, usually people will show up realizing that,” Pollak says. “But you have to change the sales culture.”
“Aggressive pricing turns on a faucet like a fire hose,” says Pollak, founder of vAuto Inc., developer of an inventory-management software system that tracks regional demand for various used-vehicle models so dealers can stock and price accordingly.
He tries to debunk a notion that vehicles priced to sell fail to garner enough gross profit for the dealership or staff.
“It is absolutely not the case that your gross profit will drop if you price aggressively,” Pollak says. “Not if you do it right, and that means knowing demand in your market.”
He adds: “The way to make money today on used cars is to get that inventory turning faster, not by trying to squeeze the last dollar from a deal. It means stocking the right cars.
“It correlates to days’ supply. If you price aggressively, people will come, inventory will turn and the total gross profit will increase.”
Competitive pricing drives traffic, but the problem is that 80 percent of dealers do not use inventory-management software to help them determine vehicle demand and value in their regions, says Ralph Ebersole, Cars.com’s director of automotive consulting and dealer training.
“If you don’t have the right cars, then aggressive pricing is not going to work that well,” he says. “Competitive pricing wins. That doesn’t necessarily mean the lowest price. But you also need great marketing that tells a great story. Otherwise, aggressive pricing won’t work.”
Some of the panelists’ advice is traditional, but with a modern twist. An example: relationship building. That’s a foundation of selling, but now all sorts of modern communication channels provide ways to connect with customers.
One way is a chat capability on dealership websites. It lets staffers informally communicate with prospective buyers “so they know who to contact when it comes time to buy a car,” says Jonathan Ord, CEO and founder of DealerSocket.
“It’s still a relationship business,” says Ebersole, a veteran of the business who recalls the “fun” of trying to sell and finance cars at 16.5 percent interest rate during the recession of 1982.
Whether back then or now, it remains vital to measure staff performance and hold salespeople accountable, he says.
“Sometimes you need to change the person or change the person,” Ebersole says. “By that, I mean either change what the person is doing so it alters his or her performance for the better, or make a personnel change.”
A good salesperson shows customers alternative vehicles other than what they originally expressed an interest in, Smith says. That keeps options open and avoids the potential problem of shoppers falling for vehicles beyond their budgets.
“Salespeople should get out of the habit of trying to push a car down the throat of someone who can’t really afford it,” Ord says. “Get people landed on cars that are right for them.”
To do that means learning customer needs by asking qualifying questions, part of the step-selling process, Ebersole notes. “The reason we do step selling is that it works. The reason it works is because we’re listening.”
This article reprinted with permission from Ward’s Dealer Business.