How do Top Performers answer the price question on leads?

This question comes up and it remains the most hotly debated topic between Dealership management and Internet departments. One thing we do know, customers are very interested in price and those dealerships that do not provide them with a price – quickly – lose out to other dealerships that do.

Why? When customers begin their Internet research on a specific vehicle, they begin by searching automotive manufactures sites, Third party and consumer opinion websites looking for quality ratings and consumer recommendations of the vehicle. In almost all instances, when a customer finds a vehicle they are interested in, most OEM automotive manufacturers’ sites provide a build and price feature. After the customer builds and prices a vehicle, many of the websites will offer up: “Get an Internet Price.” The customer expectations are now set when they see the Internet price option. Usually when they submit their inquiry, they will receive up to two (2) auto responses confirming they will received a price quote.

Top-performing dealers recognize the importance of prompt, complete and transparent communication with consumers. Eighty-three percent of these dealerships have processes in place to phone immediately after receiving an email lead and 95% provide price and vehicle information as part of an initial response.

The best Top Performers establish an Internet pricing policy with their dealership management. Once this pricing policy is set, it is easy to quote a price based upon the customer inquiry. Of course, most dealerships add a disclaimer saying the price may not match exactly as the vehicle described in the customer email. But when the customer receives the price quote, they know you read their email inquiry and provided valuable information to establish trust, so the customer can starting building a relationship with your dealership.

An excellent best practice is to provide vehicle information on a similar vehicle, showing MSRP, less any rebates, less any special Internet discounts, to provide your dealerships best Internet price. Then, include several vehicle alternatives, one vehicle with more options and higher price, another vehicle, lower in price than the vehicle originally quoted and a Pre-owned vehicle. Your closing sentence would ask the customer “Which vehicle is best for you? Please call me to explain the different vehicle alternatives.” You are providing several vehicle alternatives, and exceeding the customer expectations by providing them with a choice.

What if you do not have an Internet pricing policy? Many dealers send the window sticker of a vehicle the customer is interested in to show they are responding to the pricing issue, and note “Here is an example of a vehicle we have in stock that closely matches the vehicle you inquired about.” The message shows you are providing a price and helps begin a dialogue with the customer. Another innovative approach is to make a copy of your weekly newspaper ad and paste the ad on your dealership’s Internet website. Customers will now see all your vehicle prices, either for purchase or lease and the pricing is consistent of what customers see weekly in their newspapers. This approach is a non threatening way to establish an Internet price within your dealership and maintains a consistent pricing policy.

One of most common responses, from Internet Managers on their Internet pricing practices, is the fact that once a customer agrees with your Internet price and comes into the dealership, they often add other vehicle features and options not discussed. They usually do not buy the vehicle at the same price they originally agreed to. They either change their mind or discover another vehicle option they did not know about and now want. Many of the most successful dealership managers, who trust their Internet departments, know they can establish an Internet pricing policy, since many times the customers change their minds when making their final buying decisions.

The dealerships that have a firm Internet pricing policy are the dealerships that treat the Internet department as one and the same as the other departments. They have been empowered to offer an Internet price and have the confidence of the dealership management to do so.

Another important fact to remember: It isn’t all about the price. Results from Cobalt’s recently completed two-year study, 2007 Dealer eBusiness Performance Study: The New Buying Influences, shows that consumers value a good buying experience from a professional sales staff nearly as much as a low price and in some cases are willing to forgo the absolute lowest price in order to have a better buying experience with the dealership sales staff.

In fact, Sixty percent of car purchasers said if they received a response from a dealer and it included a competitive price for the vehicle they were interested in and a compelling reason to buy from that dealer, that they would stop shopping elsewhere and give the dealer a chance to earn their business. Twenty-eight percent said they would give the dealer a chance but still shop the price around to validate it was a good deal.

Only 12% of shoppers surveyed, said they always buy from the dealer with the lowest price. This data indicated that more than half of shoppers value complete and relevant communication with a dealer over a small minority shoppers that are motivated by the lowest price. Dealers who respond to leads promptly, completely and transparently and continue to nurture leads after a 90-day window will fill the void and begin closing the gap.

Author Team: Ben Patawaran, Darlene Mate, Egan Fowler, Michael Savickas and Tony Boyd – members of Cobalt’s best-in-class dealer training team.

Source: 2007 Dealer eBusiness Performance Study: The New Buying Influences