Some car dealership websites spook 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 with text and graphics doesn't further the cause of trying to move the Internet user towards the dealership and an ultimate purchase, he says.
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 joins 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, FL.
As if the larcenous-sounding theme isn't enticing enough, panelist Dale Pollak says, “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, lest they 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 used vehicles so dealers can stock and price accordingly.
He tries to debunk a notion that margins are inadequate when vehicles are priced to sell.
“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.”
The problem is that 80% 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-automotive consulting and 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.”
Today's successful dealers use customer-relationship management software to leverage their data bases, says Bobby Gaudreau, national sales director at IMN's Automotive Services Group.
That doesn't mean sending 12 service reminders a year to each customer, he says. “That can become annoying.”
But it does mean having a tested and documented marketing plan that keeps in touch with all customers.
“A store in Southern California has 600,000 customers in its data base,” Gaudreau says. “Smaller stores have 1,000. The average is 2,500 to 5,000. If there are less than 1,000, you're in trouble.”
Some of the panelists' advice is traditional, but with contemporary angles. An example: relationship building. It remains a foundation of sales, 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 casually 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, an industry veteran who recalls the “fun” days of trying to sell cars during the recession of 1982 when the going interest rate was 16.5%.
Another constant is the need to measure staff performance and hold sales people 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 improves his or her performance, or make a personnel change.”
A good salesperson shows customers alternative vehicles beyond what they originally expressed an interest in, Smith says. That keeps options open and avoids the potential problem of shoppers getting attached to vehicles they can't afford or the dealership can't get financed.
“Sales people 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 venerable step-selling process, Ebersole notes. “The reason we do step selling is that it works. The reason it works is because we're listening.”