Using Transparency as a Competitive Advantage - Winning Strategies for Today’s Consumer-Driven...
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Auto dealers are constantly looking for ways to get an edge in the digital age, yet many continue to follow the same sales and advertising practices that they’ve been using for decades. Let’s face it, consumers have access to much more information, and choices, than ever before. In the past the dealer controlled all of the information, but today it’s just the opposite. Any information you offer is now carefully scrutinized and validated by a vast amount of online data. As a result, the likelihood of old-school sales practices backfiring has increased substantially. In this dynamic session, I’ll be discussing ways to break down deep-rooted stereotypes and embrace the transparency that consumers have been begging for. A transparent business model can greatly enhance your sales, reputation, customer retention, and bottom line. You’ll find that customers will actually be willing to spend more when they feel they’re buying from a business they can trust.
Transcript of Using Transparency as a Competitive Advantage - Winning Strategies for Today’s Consumer-Driven...
- USING TRANSPARENCY AS A COMPETITIVE ADVANTAGEWinning Strategies for Todays Consumer-Driven EconomyPresented by:Jim Radogna
- Are you transparent on the phone?
- How do you handle internet leads?In his article Does Not Being Transparent Make You Invisible toCustomers, Ron Henson from DrivingSales notes:The work I do with dealers affords me the opportunity to reviewmany Internet mystery shops of dealerships all over NorthAmerica. It blows me away how many times we ask for a price andget an answer like: Well make you a great deal. When can you come in? Weve never lost a deal over price. Come on down. What monthly payment were you hoping to get? Do you have a trade?
- Is your advertising transparent?
- How about your negotiating process? Transparent?
- F&I Processes?
- Are you upfront about vehicle histories?
- Is your pricing transparent?
- Do you properly disclose all fees?
- The Case AGAINST Transparency
- We have to do whatever it takes to stay ahead of the competition. Everybody else is hiding information. This way of doing business has been successful for decades. The chances of getting into a legal bind are pretty slim. If you give customers too much information theyll just use it to shop you. Customers have no loyalty. Why should we be at a disadvantage by following regulations that our competitors ignore?
- The Case FOR Transparency
- REASON #10 Avoid Legal ProblemsState & federal regulators frequently target non-transparent dealer practices as unfair and deceptive:Advertising Violations Bait & Switch (just get em in) Failure to Sell at Advertised Price Internet Advertising (dot.com disclosures) MailersUnfair and Deceptive Acts and Practices (UDAP) Spot Delivery Payment Packing Vehicle History Disclosures (rental, demo, damaged)
- Getting caught is no longer a just a fine and slap on the wrist. Regulators have begun using the media to penalize those dealers caught in order to intimidate others. Regulators want press, and the tougher the press is on the offending dealers the better it is for the regulators in charge. The severity of the offenses is often exaggerated. The social media age brings more long-term consequences and public humiliation than businesses have ever seen before. Do you want your customers seeing Your dealership on the 6 oclock news?
- REASON #9 Increase Lead ConversionThe ultimate goal is still to get em in and close the deal,but for an increasing number of shoppers, transparency isthe only thing that will get them in. Not being upfrontabout details used to have its benefits. Up until recently,the salesperson could control the selling process becausehe or she controlled the information. Today, its just theopposite - consumers have all the information they needat their fingertips. If you resist answering customersquestions, chances are youll never hear from them again.
- REASON #8 Increase Closing Ratios Higher levels of satisfaction with the selling process result in higher closing rates and higher sales. A survey by Maritz Research of over 163,000 Americans found the following:64.0% are completely satisfied when one person with pricing authority negotiates the deal vs. 20.7% when two or more with no pricing authority are involved.
- REASON #7 Improve Your REAL ReputationWhat Is Your Reputation Worth? A dealerships reputation is difficult, if not impossible, to maintain when staff members depend on old school deceptive practices. Customers often make decisions during a vehicle sale transaction that they come to regret after the ether has worn off. You can be sure theyre telling somebody about the transaction. Or perhaps theyre telling thousands of people online?
- REASON #6 Increase Customer SatisfactionLack of transparency and old school tactics diminishthe customer experience. Nobody likes surprises.Sure, you made the deal but are your customerstruly satisfied with your processes or do you justwear them down? Higher Customer Satisfaction = More Repeat and Referral Business
- REASON #5 Increase Customer LoyaltyCustomers only have loyalty if you earn it from them.Transparent processes help build customer loyalty and retention.
- REASON #4 - Your Customers Have UnprecedentedAccess to Information in Real Time A recent JD Power report highlights a growing trend called Showrooming where prospects sitting in your showroom are actually price competing your deal with another dealership using their mobile devices.
- Consumers not only have more access to information but also have access to more dealers.In the past, consumers were limited to dealers in their localarea. The increase in the amount of information available toconsumers has brought consumers a quick and easy way toanalyze not only different prices via internet quotes but alsoto identify who they want to do business with. Customerssimply have too many choices and will quickly discarddealers they feel are hiding something. Hiding (or reducing)the amount of information available to consumers will onlymake them trust you less.
- The days of internet-savvy customers being in the minority are long gone.The internet is probably never going to take over carbuying and its likely that dealerships will continueto be the primary way that customers will purchasevehicles. But remember this; while customers mayalways choose to do business with dealerships, theydont have to choose to do business with yourdealership. Just because customers shop yourcompetitors with a perceived better deal, it doesntmean theyll buy there.
- REASON #3 Reduce Chargebacks Once the ether wears off and the customer goeshome and reads the contract how much do you get to keep?
- REASON #2 Youll Stand Out From Your CompetitionWhat percentage of dealers are transparent today?Theres an opportunity to not only be transparent, but totrumpet the dealerships transparency. The "friendly,courteous dealer" claim doesnt resonate with verymany consumers anymore. However, using transparentprocesses to clearly demonstrate the honesty of the storecan and does resonate.
- Progressive Dealers Are Marketing Their Transparent Processes and Customers Are Responding
- REASON #1 Transparency Is What YourCustomers Have Been Begging For, Why Not Treat Them The Way They Want To Be Treated?The difficulty lies not so much in developing new ideas as in escaping from old ones - John Maynard Keynes TRANSPARENCY IS NOT A DIRTY WORD BUT COMPLACENCY IS