The "retail" guys start at the top and work down to our price
Does the retail customer have any say in the matter? I would think Honda buyers would be better negotiators than that. A smart negotiator will start at the bottom....not the "top".
But, your answer to my specific question was somewhat vague. Typically what would an internet buyer pay for a Honda Accord that invoices at $20,000, as opposed to someone that drives into the dealership and negotiates for a price?
I'm assuming the "no hassle" internet price will cost at least a couple hundred bucks more. Which would be very much worth it to many consumers.
2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
On an Accord I'm about $300 under invoice. Each model has their own pricing and any dealer cash gets thrown into the equation also. So an Accord thats $300 under and has $500 dealer cash is priced at $800 under.
The retail customers start at $1000 off MSRP and works down. Most don't get to our level and some might get to be alittle less, but the average gross profits for "retail" vs "Internet" are higher.
"By the same token, why do shoppers send e-mail inquiries in and never bother responding to my replies?"
Buyers answer emails. Shoppers often will not.
You answered my question with your question. The reason salespeople do not anwswer emails is they are not serious about selling vehicles using online methods. They are just "customer kickers".
Although we answer every e-lead (4 hours is goal) a vast majority have bogus phone numbers, never answer our e-mail, or "it must have been my son surfing". Internet close ratio is about 2-4%, phone leads about 15-20%, and showroom about 35-40%. I understand this is typical of a high end store
Internet close ratio is about 2-4%, phone leads about 15-20%, and showroom about 35-40%. I understand this is typical of a high end store
On the flip side, I would think that you could process those internet deals a lot more quickly and easily than the in-store sales. Not helpful to someone selling in low volumes, such as Land Rover, but for a high volume Toyota dealer, I would think that it would be an acceptable channel.
I want you to think about this for a minute. Lets say that you are shopping for a $10,000 widget. Now, widget dealers don't have the best reputations and being that you aren't a out-going people person...you just want to buy your widget and get it over with. So, you go to the widget dealers website or you go to Widget Corps website and you see text that says "Price Quotes on Widgets" and you give your info.
So now, the response from the dealer is "Hey we have this Widget in Chartreuse, just like you wanted...so come on in and lets talk about it." Or you receive "We'll sell this widget for $5500 but it doesn't include 'this' or 'that' or the 'other thing'....but come on in and lets talk."
That response wouldn't be something that you'd like to receive would it?
Ok, so here is what I would like for you to do...as an experiment. The next time you receive an Internet inquiry...price it out copmpletely, leave NOTHING out. Call the customer and let them know you sent their price quote to them and ask them to respond back if they received your quote.
Try that approach for a couple of days, and track your progress.
If a quote on a specific car is requested I will provide it. If they ask for a "bottom line" quote it is provided. It is a diservice to a customer to quote a trade without seeing the car. Blind appraisals always costs the customer dollars. Also, after a bottom dollar quote is given in good faith, they most often want further negotiation.
He seems to be doing a lot more than that. Instead of fretting about buyers being evil and nasty, he communicates a degree of no-BS openness that will win enough trust and confidence from the customer to close deals quickly and efficiently.
If the goal is to move volume, that sounds pretty smart to me. Pretty much what I previously suggested could be a successful strategy for operating an internet sales operation. The closing rate might be lower, but the volume should make up for it.
No figures are givien on trades, and customers know that a dealer needs to see the trade to put an accurate figure on that. Same thing with financing. Customers need to have placed a credit app, and any payment is solely based on their personal credit history.
Our Internet closing rate varies from 12-17% we aqlso account for approx 25% of the dealerships business. I might add that we have the lowest cost per sale in our corp, as we have eliminated third party paid providers and use Googe and our two web sites exclusively.
Our Internet closing rate varies from 12-17% we aqlso account for approx 25% of the dealerships business. I might add that we have the lowest cost per sale in our corp, as we have eliminated third-party paid providers and use Googe and our two web sites exclusively.
That sounds like a good business model for a high-volume dealership located in a competitive market. The cost reduction and the higher closing rate as compared to other internet seller (if the other seller's 4%+/- figure is in the ballpark of the typical average) sound like they would be key.
I'm curious, but are you able to guesstimate how many sales you are able to take away from rivals? I would bet that the ability to capture volume that creates a base for more repeat business and a service relationship must help over the long haul as well by directing customers to you and away from your competitors, but that's just a guess on my part. (I might be exaggerating the value of converting that purchase into an ongoing relationship.)
Thers no real numbers of what we bring in from other areas, except the zip code reports. The "outside" areas aren't something that we concentrate on...the old rules still apply in that the further you are from a dealer the less likely you are to buy from them. If you have to go by 6 dealers to get to me, its a long shot that you'll buy...unless it's a very high demand low availability ordered car.
On some of the other threads I see folks touting dealers in other states and having their cars shipped to them. Thats not in any way our intent, as the base for the car business is the servicing of those customers. Thee are always special circumstances like job relocations/parents buying a car for their son/daughter that goes to school here etc.
the base for the car business is the servicing of those customers.
So, you do find it's worth giving up margin on the front end if it expedites the sale, reduces the sales expense, and creates a service relationship? I'm curious, as that was the basis for my original speculation. If true, that would make the no-fuss internet model good for a high-volume dealer in a competitive metro area, although maybe not so good for a low-volume marque, because their volumes and badge prestige would be compromised by the minimal interaction between dealer and buyer.
I rest my case gang.I think now you can see the depth of feeling against car salesmen.And I still think most of that ill will is richly deserved. I stand by my earlier opinions. To those of you that are honest and straightforward I thank you and I believe you try to do a good job. To the rest(most)of you: :P
I bought from Lia Honda, Enfield, CT, via Internet. Asked for the lowest price they would accept for a CR-V EX with auto.
Got a below-invoice reply the next day. I arranged my own financing, visited, did the paperwork in 10 minutes and signed on the dotted line. Absolutely zero hassle.
I think I contacted five area Honda dealers in all and got price quotes from two within a reasonable time frame. As I recall, the price spread was about $300. Even the higher price was on invoice and a decent deal.
Honda is especially suited to Internet shopping, I think, because the cars' pricing isn't complicated with a lot of option packages and drive-train choices. You simply name your model and ask for a quote.
It's harder, as a buyer, to feel confident about getting a price on brands that have a lot of option packages or pricing that varies significantly by season. I don't care who you are, if you haven't done your homework when you walk into a dealership, you're going to succumb to the Wow! factor.
As an Internet shopper, you have the advantage of not putting a foot in the dealership until you have a quote you're happy with and, since the dealer gave you the quote, it should be a win/win situation. There's no need for stereotypical BS on either side.
I did not shop the quoted price, because I felt I was being treated honestly. They gave me the info in the format I asked for it and stood by it. This is the way cars should be sold (and bought) IMHO.
the internet manager at my store, i averaged a closing ratio of 12%-15%. we were a smaller store that averaged anywhere from 30-50 cars total per month (on the nissan side at least...) my responses to email requests were as follows (providing that they included enough info to allow me to do this...)
Dear Joe,
Thank you for your interest in the 2005 Nissan Maxima. Here at XYZ Nissan, we work hard to make your car purchasing experience a simple and pleasant one! Regarding the particular vehicle you are interested in, pricing and equipment are as follows:
MSRP: $32,087 Invoice: $29,850 XYZ Discount: $300 Nissan Factory Rebate: $1500 Total Sale Price: $28,050 plus tax, registration and dealer conveyance fee.
Please call me at your earliest convenience to set up an appointment for a test drive. I look forward to hearing from you and welcoming you to the XYZ Nissan family!
All the best
Thenebean
worked for me ok! a lot of people probably took my numbers and ran, but those who did buy said i was the first to respond, and i laid out the numbers easily and made it simple to understand. pretty much every car via email was under invoice (with the exception of the Z roadsters)
at first, the owner didnt want me to reply to emails this way - but in all honesty, whether i give a number or not, it really takes the same amount of time to respond, so why not respond with everything i have on the first try. we didnt do preliminary "automated" emails, and i did my best to respond to these within the hour if i could. (it was just me, and i think i dealt with maybe 15-20 leads a day - some had more than others though...)
good question - a lot of the dealers in my area had the same, or very close to the same conveyance fee ($249 was ours). Sometimes I would include the amount in the email if it was requested. some people were even able to haggle it off (but that didnt happen too often)...so i guess there was no particular reason i didnt include the conveyance fee...i just didnt! :P
Reading your posts gives some hope that all is not lost in the auto sales business. I think your models of internet car sales will help bring "some" respectability and trust back into car buying. That is, when you say you are going to give a free quote, you do...and it is a competivive quote.
I can see why "some" car salesmen would be suspicious and be negative about how you do business. Because if it catches on they will have to change their dishonest, and some say sleasy, method of using "free internet price quotes" solely as a front to get someone to walk onto their dealership.
2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
I think your models of internet car sales will help bring "some" respectability and trust back into car buying
I agree...but on the other side of the coin the other dealers will eat them for lunch in most markets...so what is a dealer to do? stay on course by doing things the way we think they should be done and hope consumers go along or do things the more traditional way and have a higher closing ratio, more sales and more income?
so what is a dealer to do? stay on course by doing things the way we think they should be done and hope consumers go along or do things the more traditional way and have a higher closing ratio, more sales and more income?
I don't see how the internet model would be good for all dealerships. A dealer that tries to sell low volumes at high margins probably wouldn't like it at all. Assuming that you sell Audis, I can see why it wouldn't work for you.
For a busy Honda or Toyota dealership in a competitive market, it makes more sense from the dealership perspective, because the volumes can be high and because the first no-hassle sale will probably lead to a future relationship with the buyer that creates future sales and service opportunities.
It seems that part of the problem is that most salespeople aim for high closing ratios (the commission structure motivates this), when volume seems to be the key to success in the online business. JMurman seems happy to accept a lower closing rate (as measured by sales per a number of emails) and a lower margin in exchange for a quick close and the ability to capture a relationship. Others here are not.
It seems that part of the problem is that most salespeople aim for high closing ratios
Many dealers tie closing ratios to the commission structure...Why tie up desk space with a guy who has a 10% internet closing ratio when the same desk could be used by somebody who has a 20-30% ratio with higher gross profits?
a lower margin in exchange for a quick close and the ability to capture a relationship.
This only works if your selling something that nobody wants..it you got a product that sells well there is no need to drop margins. A quick sale to make less money doesn't benefit the dealer...Very few internet sales are quick. Our tracking has shown that it takes alot longer to close an internet sale than a traditional walk in customer. The typical email sale goes something like this... 30 emails and 2 weeks after the initial email contact the customer emails an offer that is thousands apart from a sale....10 more emails and a week later the guy is now offering invoice for the hottest car on the planet. Then we find out the guy is from 300 miles away (so the so-called relationship means nothing) and will never use the service department or come back with a friend or referral and we still don't have a deal. Now the guy has a trade-in that he forgot to mention. he appraised himself at KBB retail, etc....and on and on it goes.
There are cases where the internet sale was easy but they are the exception not the norm.
Why tie up desk space with a guy who has a 10% internet closing ratio when the same desk could be used by somebody who has a 20-30% ratio with higher gross profits?
When internet sales are not profitable for a dealership, then do not provide the illusion of having an internet sales channel.
This (a lower margin in exchange for a quick close and the ability to capture a relationship) only works if your selling something that nobody wants.
True, but in this day and age, many cars have effectively become commodity products, and a high volume dealership is going to look at quick inventory turn as a source of profit. Even once hot sellers such as the Honda Accord are available at relatively low prices as compared to invoice,because inventories are abundant.
I would think that one goal of a dealership in a busy metro market is to capture a sale so that someone else doesn't take it, instead. If it's a choice between taking the sale for yourself or letting a rival make it, I would think that you'd prefer the former for any vehicle for which inventory is abundant.
Our tracking has shown that it takes alot longer to close an internet sale than a traditional walk in customer.
I can appreciate that more time would pass between initial contact and the signing of the paperwork, but does that same internet sale also require more effort and overall time investment?
I would think JMurman's point is that he can send some emails, have a quick in-person meeting and be done with it, rather than commit large blocks of time that include the turnover process (hand-off between salesperson and sales manager), the latter of whom is paid on salary and who doesn't create much value on a low margin deal. (If he can't pull up the price of the internet sale, then he would seem to be a costly, unnecessary employee to have for those transactions.) Add to that that Hondas have very few option packages, and it must be easy for him to deliver a quote with minimal information from the customer.
Again, I can see why it would work for some dealers and not for others. Perhaps the lower volume sellers would have to compensate by trying to substitute level of service for price, i.e. you'll have to pay something above rock bottom, but we'll deliver it to your home or office and otherwise make the sale painless and highly convenient.
It really doesn't matter whether a lead is an e-lead, a phone lead, or a walk up lead - the deal is the same. All manner of leads are wlcome and responded to. To be honest, the best deals go to the repeat customerm - loyalty is a rewarded virtue
...that many dealerships are completely ignoring the internet. However, if they're smart, they are only giving it the attention that it warrants. The internet is a great thing, but despite what some people want it is not going to replace human interaction in most cases. And car negotiation and sales are so complicated, even for us sophisticated car buffs, that I would say that the internet is going to stay a niche method of sales. Sure, if you know exactly what you want, the dealer actually has it, you have no trade, and you have your own financing set up, then you could do an internet-only deal. But what percentage of sales are like that? If it's more than 1%, I'd be surprised.
At this point, the internet is an evolution, not a revolution, so let's not lose our heads over its importance in all aspects of our lives.
Where would you get the idea that Internet Sales are not profitable?
Considering that Internet Sales generate up front gross and back end gross and service customers...they are HUGELY profitable to the dealership. Now they might not be profitable to most salesmen, as the deals tend to be towards the "mini" side, but the profit is there.
Also I might add...in time you'll see the Management side change from the "Car Guys" to the "Internet Guys" as that is where the market is trending towards.
Is an internet sale one in which the entire transaction takes place via email and the car is delivered to the buyers house? To me this is a true internet sale. Only a tiny percentage of sales are true complete internet sales.
Is an internet sale one in which the initial contact was via email and then things got a little more traditional? to me this isnt an internet sale..its more like a phone-up that came in the form of email.
The huge majority of so-called internet sales are nothing more than initial contact via email and some basic details of the sale...maybe inventory, price etc....then the consumer comes to the dealership and things operate just like any other customer....except the internet customer is probably a little farther ahead in the process.
This type of deal is often counted as an internet sale but it really isnt. If we counted this as an internet sale we probably be in the 20-30% range.
This has actually increased our costs of doing business. In the past we didn't have to pay lead generators, web design services, additional staff, additional advertising sources like google, yahoo, auto trader, msn, etc....anyone who has seen the bills from places like google, yahoo, etc would be shocked at the costs....It's cheaper to advertise in the ny times.
In our dealership we have 5 Internet Salespeople in the Internet Dept.
A Internet Sale is defined as someone who contacts us via the Internet. The sale and everything else takes place along the same lines as a Retail sale. In Maryland the laws require us to have the contracting and delivery take place in the dealership. You also have to hae a brick and mortar store to conduct business. This law alone put all online car selling vendors out of business here in the state.
"This has actually increased our costs of doing business. In the past we didn't have to pay lead generators, web design services, additional staff, additional advertising sources like google, yahoo, auto trader, msn, etc....anyone who has seen the bills from places like google, yahoo, etc would be shocked at the costs....It's cheaper to advertise in the ny times"
It used to cost us alot too...until we figured out that the third party vendors are ripping us off. The third party vendors will take a customers information and sell it to two or three dealers for 20-25 per lead. So we would end up with a HUGE bill at the end of the month.
Then we decided to do everything in house. I learned HTML and used my marketing skills to start driving customers to our web sites. The closing ratio from a third party vendor like Autoweb/etc averages 2-4% The closing ratio from our own websites average 15-20%
The Internet can be profitable, but Management HAS to buy into it, or it won't work.
A Internet Sale is defined as someone who contacts us via the Internet. The sale and everything else takes place along the same lines as a Retail sale.
To me that isnt an internet sale its a glorfied phone up...does anyone really need an entire department to do this type of sale?? I expect alot MORE sales from internet salespeople than traditional salespeople since they are getting direct leads vs. showroom walk in traffic. My two internet people make less than all of our traditional salespeople (they sell higher volume just make alot less per unit)...so its hard for me to keep people in this position. After a few months they want to go on the floor. Less work per sale and higher income....how does your store handle turn over for internet sales??
"To me that isnt an internet sale its a glorfied phone up...does anyone really need an entire department to do this type of sale??"
That's your opinion and the trends are definately away from that type of thinking and process.
"....how does your store handle turn over for internet sales?? "
I don't have turn over in this dept. Our pay plan is based on volume and other factors so the Internet helps my guys get their volume bonuses...which is a huge portion of our pay plan.
Your response format is very close to the info I asked for in my RFQs. Basically, I asked for a sale price figure (i.e., my price for the vehicle after all discounts) that excluded TTL and any other non-negotiable costs.
Customers realize that sales tax, for example, is not negotiable, and they shouldn't compare a quote that excluded the tax with one that included it.
I was a little surprised that some dealers were slow to respond or didn't respond at all to my RFQs. What do they have to lose?
Plus, there was nothing keeping a dealer from giving me the quote I asked for on a CR-V ... and adding FYI if they had a special on a Pilot or Ridgeline. No one did this. Maybe there were no special financing deals or discounts, on those models. Or possibly the Internet manager followed the answer the RFQ and then stop strategy.
But if I were selling cars, I think I'd consider the Internet customer as halfway sold, and I'd get an attractive quote out PDQ.
It sounds like you have a good feel for dealing with serious customers who have done some homework.
Well, part of the reason may be that you appeared to be so unfocused that they didn't take you seriously.
When someone asks for a quote on a CRV and also talks about Ridgelines and Pilots which are totally different cars, we tend to get the feeling we are dealing with a non serious person.
So, when you asked for a quote, did you receive one?
How many requests did you send out? and how many responded to you?
Out of the ones that responded, how did you feel about the quality of the resonse? and most importantly did any of the responses effect your purchasing decision?
Isellhondas - You stated many times that you would never provide a price quote in writing. How about over the phone? Since its not documented it impossible to shop this quote. And may I assume if you do, you would stick to this quote (meaning when I come in into your dealership, the quote won't change). I got couple of quotes over the phone, but when I came to the dealership it was always different (in dealers favor). I never shop the quote I get. I just get the lowest one and go to the dealership to close the transaction. And since I live in large metropolitan area I have many dealerships in similar proximity of my house. That why I prefer a written quote ( email) so if I would accept it, it won't change when I come in.
I'm happy to provide quotes over the phone and I always stick by them. This gives me a chance to determine for sure, exactly what the shopper is looking for too.
I make sure my customers know exactly what is included.
Internet Crime Center complaint? FTC? That will get you ignored so fast. You send emails out using a dist. list of hundreds of people? You might get responses back from some, but I'm sure a fair number of ISPs will through your email in the spam bucket.
Not having luck with email? My advice, call them on the phone or go in person.
Comments
If you had dealt with them before and felt they were the WORST dealer you had ever seen, WHY in the world would you go back there?
"Not if you were the last dealer on earth"
But, you still did the "online thingy" ??
Does the retail customer have any say in the matter? I would think Honda buyers would be better negotiators than that. A smart negotiator will start at the bottom....not the "top".
But, your answer to my specific question was somewhat vague. Typically what would an internet buyer pay for a Honda Accord that invoices at $20,000, as opposed to someone that drives into the dealership and negotiates for a price?
I'm assuming the "no hassle" internet price will cost at least a couple hundred bucks more. Which would be very much worth it to many consumers.
The retail customers start at $1000 off MSRP and works down. Most don't get to our level and some might get to be alittle less, but the average gross profits for "retail" vs "Internet" are higher.
Because you answered their question and they have no more questions.
See how simple everything is in the World of Bob?
Buyers answer emails. Shoppers often will not.
You answered my question with your question. The reason salespeople do not anwswer emails is they are not serious about selling vehicles using online methods. They are just "customer kickers".
On the flip side, I would think that you could process those internet deals a lot more quickly and easily than the in-store sales. Not helpful to someone selling in low volumes, such as Land Rover, but for a high volume Toyota dealer, I would think that it would be an acceptable channel.
I want you to think about this for a minute. Lets say that you are shopping for a $10,000 widget. Now, widget dealers don't have the best reputations and being that you aren't a out-going people person...you just want to buy your widget and get it over with. So, you go to the widget dealers website or you go to Widget Corps website and you see text that says "Price Quotes on Widgets" and you give your info.
So now, the response from the dealer is "Hey we have this Widget in Chartreuse, just like you wanted...so come on in and lets talk about it." Or you receive "We'll sell this widget for $5500 but it doesn't include 'this' or 'that' or the 'other thing'....but come on in and lets talk."
That response wouldn't be something that you'd like to receive would it?
Ok, so here is what I would like for you to do...as an experiment. The next time you receive an Internet inquiry...price it out copmpletely, leave NOTHING out. Call the customer and let them know you sent their price quote to them and ask them to respond back if they received your quote.
Try that approach for a couple of days, and track your progress.
You can email me and let me know how it works.
Jerry
I love it when other stores do that!
I love it when other stores do that!
He seems to be doing a lot more than that. Instead of fretting about buyers being evil and nasty, he communicates a degree of no-BS openness that will win enough trust and confidence from the customer to close deals quickly and efficiently.
If the goal is to move volume, that sounds pretty smart to me. Pretty much what I previously suggested could be a successful strategy for operating an internet sales operation. The closing rate might be lower, but the volume should make up for it.
And you would probably also be surprised that after over ten years how much repeat and referral business I do.
That sounds like a good business model for a high-volume dealership located in a competitive market. The cost reduction and the higher closing rate as compared to other internet seller (if the other seller's 4%+/- figure is in the ballpark of the typical average) sound like they would be key.
I'm curious, but are you able to guesstimate how many sales you are able to take away from rivals? I would bet that the ability to capture volume that creates a base for more repeat business and a service relationship must help over the long haul as well by directing customers to you and away from your competitors, but that's just a guess on my part. (I might be exaggerating the value of converting that purchase into an ongoing relationship.)
On some of the other threads I see folks touting dealers in other states and having their cars shipped to them. Thats not in any way our intent, as the base for the car business is the servicing of those customers. Thee are always special circumstances like job relocations/parents buying a car for their son/daughter that goes to school here etc.
So, you do find it's worth giving up margin on the front end if it expedites the sale, reduces the sales expense, and creates a service relationship? I'm curious, as that was the basis for my original speculation. If true, that would make the no-fuss internet model good for a high-volume dealer in a competitive metro area, although maybe not so good for a low-volume marque, because their volumes and badge prestige would be compromised by the minimal interaction between dealer and buyer.
To those of you that are honest and straightforward I thank you and I believe you try to do a good job. To the rest(most)of you: :P
Got a below-invoice reply the next day. I arranged my own financing, visited, did the paperwork in 10 minutes and signed on the dotted line. Absolutely zero hassle.
I think I contacted five area Honda dealers in all and got price quotes from two within a reasonable time frame. As I recall, the price spread was about $300. Even the higher price was on invoice and a decent deal.
Honda is especially suited to Internet shopping, I think, because the cars' pricing isn't complicated with a lot of option packages and drive-train choices. You simply name your model and ask for a quote.
It's harder, as a buyer, to feel confident about getting a price on brands that have a lot of option packages or pricing that varies significantly by season. I don't care who you are, if you haven't done your homework when you walk into a dealership, you're going to succumb to the Wow! factor.
As an Internet shopper, you have the advantage of not putting a foot in the dealership until you have a quote you're happy with and, since the dealer gave you the quote, it should be a win/win situation. There's no need for stereotypical BS on either side.
I did not shop the quoted price, because I felt I was being treated honestly. They gave me the info in the format I asked for it and stood by it. This is the way cars should be sold (and bought) IMHO.
Dear Joe,
Thank you for your interest in the 2005 Nissan Maxima. Here at XYZ Nissan, we work hard to make your car purchasing experience a simple and pleasant one! Regarding the particular vehicle you are interested in, pricing and equipment are as follows:
2005 Nissan Maxima SE
6sp Manual Transmission
Sheer Silver Exterior
Charcoal Gray Leather Interior
Preferred Package
Floor Mats
Splash Guards
Sunroof Wind Deflector
MSRP: $32,087
Invoice: $29,850
XYZ Discount: $300
Nissan Factory Rebate: $1500
Total Sale Price: $28,050 plus tax, registration and dealer conveyance fee.
Please call me at your earliest convenience to set up an appointment for a test drive. I look forward to hearing from you and welcoming you to the XYZ Nissan family!
All the best
Thenebean
worked for me ok! a lot of people probably took my numbers and ran, but those who did buy said i was the first to respond, and i laid out the numbers easily and made it simple to understand. pretty much every car via email was under invoice (with the exception of the Z roadsters)
at first, the owner didnt want me to reply to emails this way - but in all honesty, whether i give a number or not, it really takes the same amount of time to respond, so why not respond with everything i have on the first try. we didnt do preliminary "automated" emails, and i did my best to respond to these within the hour if i could. (it was just me, and i think i dealt with maybe 15-20 leads a day - some had more than others though...)
anyways, my two cents...
-thene
-thene
I can see why "some" car salesmen would be suspicious and be negative about how you do business. Because if it catches on they will have to change their dishonest, and some say sleasy, method of using "free internet price quotes" solely as a front to get someone to walk onto their dealership.
Putting a quote in writing is the quickest way to not make a sale!
This is very true when you have the high price quote!
I agree...but on the other side of the coin the other dealers will eat them for lunch in most markets...so what is a dealer to do? stay on course by doing things the way we think they should be done and hope consumers go along or do things the more traditional way and have a higher closing ratio, more sales and more income?
I don't see how the internet model would be good for all dealerships. A dealer that tries to sell low volumes at high margins probably wouldn't like it at all. Assuming that you sell Audis, I can see why it wouldn't work for you.
For a busy Honda or Toyota dealership in a competitive market, it makes more sense from the dealership perspective, because the volumes can be high and because the first no-hassle sale will probably lead to a future relationship with the buyer that creates future sales and service opportunities.
It seems that part of the problem is that most salespeople aim for high closing ratios (the commission structure motivates this), when volume seems to be the key to success in the online business. JMurman seems happy to accept a lower closing rate (as measured by sales per a number of emails) and a lower margin in exchange for a quick close and the ability to capture a relationship. Others here are not.
Many dealers tie closing ratios to the commission structure...Why tie up desk space with a guy who has a 10% internet closing ratio when the same desk could be used by somebody who has a 20-30% ratio with higher gross profits?
a lower margin in exchange for a quick close and the ability to capture a relationship.
This only works if your selling something that nobody wants..it you got a product that sells well there is no need to drop margins. A quick sale to make less money doesn't benefit the dealer...Very few internet sales are quick. Our tracking has shown that it takes alot longer to close an internet sale than a traditional walk in customer. The typical email sale goes something like this... 30 emails and 2 weeks after the initial email contact the customer emails an offer that is thousands apart from a sale....10 more emails and a week later the guy is now offering invoice for the hottest car on the planet. Then we find out the guy is from 300 miles away (so the so-called relationship means nothing) and will never use the service department or come back with a friend or referral and we still don't have a deal. Now the guy has a trade-in that he forgot to mention. he appraised himself at KBB retail, etc....and on and on it goes.
There are cases where the internet sale was easy but they are the exception not the norm.
When internet sales are not profitable for a dealership, then do not provide the illusion of having an internet sales channel.
True, but in this day and age, many cars have effectively become commodity products, and a high volume dealership is going to look at quick inventory turn as a source of profit. Even once hot sellers such as the Honda Accord are available at relatively low prices as compared to invoice,because inventories are abundant.
I would think that one goal of a dealership in a busy metro market is to capture a sale so that someone else doesn't take it, instead. If it's a choice between taking the sale for yourself or letting a rival make it, I would think that you'd prefer the former for any vehicle for which inventory is abundant.
Our tracking has shown that it takes alot longer to close an internet sale than a traditional walk in customer.
I can appreciate that more time would pass between initial contact and the signing of the paperwork, but does that same internet sale also require more effort and overall time investment?
I would think JMurman's point is that he can send some emails, have a quick in-person meeting and be done with it, rather than commit large blocks of time that include the turnover process (hand-off between salesperson and sales manager), the latter of whom is paid on salary and who doesn't create much value on a low margin deal. (If he can't pull up the price of the internet sale, then he would seem to be a costly, unnecessary employee to have for those transactions.) Add to that that Hondas have very few option packages, and it must be easy for him to deliver a quote with minimal information from the customer.
Again, I can see why it would work for some dealers and not for others. Perhaps the lower volume sellers would have to compensate by trying to substitute level of service for price, i.e. you'll have to pay something above rock bottom, but we'll deliver it to your home or office and otherwise make the sale painless and highly convenient.
Listed in alphabetical order
Beaman Pontiac GMC
20%
Bell Road Automall
27%
Family Hyundai
20%
Future Nissan
22%
Germain Motor Group
30%
Gunther VW of Coconut Creek
20%
Heuberger Motors
22%
Honda of Nanuet
40%
Honda of Stevens Creek
27%
Keenan Honda
20%
O’Brien Team Hyundai
25%
Pacific Honda
20%
Phil Long Motor Group
30%
Rosen Honda
32%
Santa Cruz Nissan Dodge VW
27%
Shack Findlay Honda
20%
Toyota of Naperville
20%
Toyota of Wilmington
28%
Weston Kia
50%
All of the above dealers have at least 20% online sales.
Dealerships or salespeople that have no time for online sales are not increasing their profitability, they limiting their profitability.
3 out of 4 people now use internet weekly.
Consider for a second Gunther VW of Coconut Creek. They are the #1 volume VW dealer in the USA. 20% of their sales are online.
How many of the sales professionals whining about online customers work at a #1 dealership?
At this point, the internet is an evolution, not a revolution, so let's not lose our heads over its importance in all aspects of our lives.
Considering that Internet Sales generate up front gross and back end gross and service customers...they are HUGELY profitable to the dealership. Now they might not be profitable to most salesmen, as the deals tend to be towards the "mini" side, but the profit is there.
Also I might add...in time you'll see the Management side change from the "Car Guys" to the "Internet Guys" as that is where the market is trending towards.
Is an internet sale one in which the entire transaction takes place via email and the car is delivered to the buyers house? To me this is a true internet sale. Only a tiny percentage of sales are true complete internet sales.
Is an internet sale one in which the initial contact was via email and then things got a little more traditional? to me this isnt an internet sale..its more like a phone-up that came in the form of email.
The huge majority of so-called internet sales are nothing more than initial contact via email and some basic details of the sale...maybe inventory, price etc....then the consumer comes to the dealership and things operate just like any other customer....except the internet customer is probably a little farther ahead in the process.
This type of deal is often counted as an internet sale but it really isnt. If we counted this as an internet sale we probably be in the 20-30% range.
This has actually increased our costs of doing business. In the past we didn't have to pay lead generators, web design services, additional staff, additional advertising sources like google, yahoo, auto trader, msn, etc....anyone who has seen the bills from places like google, yahoo, etc would be shocked at the costs....It's cheaper to advertise in the ny times.
A Internet Sale is defined as someone who contacts us via the Internet. The sale and everything else takes place along the same lines as a Retail sale. In Maryland the laws require us to have the contracting and delivery take place in the dealership. You also have to hae a brick and mortar store to conduct business. This law alone put all online car selling vendors out of business here in the state.
"This has actually increased our costs of doing business. In the past we didn't have to pay lead generators, web design services, additional staff, additional advertising sources like google, yahoo, auto trader, msn, etc....anyone who has seen the bills from places like google, yahoo, etc would be shocked at the costs....It's cheaper to advertise in the ny times"
It used to cost us alot too...until we figured out that the third party vendors are ripping us off. The third party vendors will take a customers information and sell it to two or three dealers for 20-25 per lead. So we would end up with a HUGE bill at the end of the month.
Then we decided to do everything in house. I learned HTML and used my marketing skills to start driving customers to our web sites. The closing ratio from a third party vendor like Autoweb/etc averages 2-4% The closing ratio from our own websites average 15-20%
The Internet can be profitable, but Management HAS to buy into it, or it won't work.
I just dumped one that was HORRIBLE. Luckilly, I was smart enough to restrict him to a budget otherwise his bill would have been huge!
By far, the best leads come from Honda's website and out own!
To me that isnt an internet sale its a glorfied phone up...does anyone really need an entire department to do this type of sale?? I expect alot MORE sales from internet salespeople than traditional salespeople since they are getting direct leads vs. showroom walk in traffic. My two internet people make less than all of our traditional salespeople (they sell higher volume just make alot less per unit)...so its hard for me to keep people in this position. After a few months they want to go on the floor. Less work per sale and higher income....how does your store handle turn over for internet sales??
That's your opinion and the trends are definately away from that type of thinking and process.
"....how does your store handle turn over for internet sales?? "
I don't have turn over in this dept. Our pay plan is based on volume and other factors so the Internet helps my guys get their volume bonuses...which is a huge portion of our pay plan.
Customers realize that sales tax, for example, is not negotiable, and they shouldn't compare a quote that excluded the tax with one that included it.
I was a little surprised that some dealers were slow to respond or didn't respond at all to my RFQs. What do they have to lose?
Plus, there was nothing keeping a dealer from giving me the quote I asked for on a CR-V ... and adding FYI if they had a special on a Pilot or Ridgeline. No one did this. Maybe there were no special financing deals or discounts, on those models. Or possibly the Internet manager followed the answer the RFQ and then stop strategy.
But if I were selling cars, I think I'd consider the Internet customer as halfway sold, and I'd get an attractive quote out PDQ.
It sounds like you have a good feel for dealing with serious customers who have done some homework.
When someone asks for a quote on a CRV and also talks about Ridgelines and Pilots which are totally different cars, we tend to get the feeling we are dealing with a non serious person.
How many requests did you send out? and how many responded to you?
Out of the ones that responded, how did you feel about the quality of the resonse? and most importantly did any of the responses effect your purchasing decision?
I got couple of quotes over the phone, but when I came to the dealership it was always different (in dealers favor).
I never shop the quote I get. I just get the lowest one and go to the dealership to close the transaction. And since I live in large metropolitan area I have many dealerships in similar proximity of my house. That why I prefer a written quote ( email) so if I would accept it, it won't change when I come in.
I make sure my customers know exactly what is included.
Not having luck with email? My advice, call them on the phone or go in person.