Jeff Kershner introduced me to two of Seth Godin’s books a while ago:
Purple Cow and Meatball Sundae.  Since reading them I’ve subscribed to Seth’s blog at http://sethgodin.typepad.com and pointed quite a few people toward his ideas.  He speaks to everything DealerRefresh is about:  new marketing, shedding tradition, reevaluating the norm, getting small, etc.

I sent Seth a thank you email this morning, and BCC’d Jeff – Jeff immediately called to say it was time to really share Seth with Dealer Refresh, and here we are!  Jeff has had links to his books on the left-hand column of this site for a long time, and I suggest you use those links to purchase your copies (it helps DealerRefresh stay in business). Seth already responded to my email saying thanks, but hopefully he’ll drop by DR for a second….especially since we’re putting him in lights today!

So Seth, we’re calling to say thank you with the hope you’ll take a second to look at our antiquated business and maybe drop a hello.  We’re also hoping a few others from the automotive industry will start listening to your messages.

Price or No Price? Do you price your dealers inventory?

This topic has many years of life left in it, so I thought I’d start another attempt at mixing oil and water. I know there are at least two sides to this discussion and I look forward to some excellent feedback from those in the trenches. As for me, I believe in offering a price when your prospect asks for one. People are offended when someone on the phone or even worse via email, tells them that their presence is their leverage. Some people make a living teaching car dealers new ways to manipulate, intimidate and control their customers. If you still do business this way, please stop! You’re the reason people go to almost any length to avoid car dealers. How many times have you returned or referred business to some one that treated you that way? Be fair, be good, be honest, because it’s worth it.

Considerations
You wouldn’t be the first person to find that offering price immediately increases customers trust and comfort levels. Remember, most internet shoppers fear being the next victim of old-school-car-sales tactics. It doesn’t matter how much you reassure these people, you have to earn their trust! Delivering the selling price helps eliminate their fears.

And…if you put your prospect on the ceiling (sticker shock) when you offer the price, you will be able to determine their seriousness much quicker and eliminate wasting valuable time.

How Do You Deliver Price?

The best way to offer price is right down to the penny!

And…

Don’t quote dollars over cost or invoice, or percent over cost or invoice.  The Internet shopper will likely perceive this as an old school selling tactic.

Avoid being vague about the price. Offering price ranges can be effective, but be aware of internet shopper’s lack of trust. They are almost always suspicious of the “get ‘em in” mentality which is common at most dealerships. You don’t want your lack of process to result in a buyer’s departure from your dealership.

Why Deliver The Price On The Phone? Won’t People Use It To Shop Me?

Some of your internet prospects may use your price to shop around, but the only way to stop them is by not offering price. Unfortunately, you’ll end up losing more sales by not offering price than by offering one.

People use the internet because they want information NOW. They are trying hard to avoid the same old, run-around at the car dealership. They want simplicity.  If you want to sell more cars through your internet efforts, you’ll need to learn how to sell the value of a process that does not include hassle, pressure, intimidation, manipulation and stress.   Ask yourself this question, isn’t it easier to find out early in the process that your potential customer will not or cannot buy, than it is to find out later?

How Can Your Dealership Create A Plan And Structure For Delivering Price?

Here’s a road map to help simplify the process:

• Establish a price range or “menu” for all models and trims
• Make sure your internet department is on the same page with sales management (this usually means that sales management is aware and supportive of this process)

You’ll see these benefits:

• Quicker price quotes
• Standard info now available for all sales people (most importantly your internet staff)
• Cut-down on extensive calculations (people don’t like waiting through multiple trips back and forth to the sales manager)
• Boosts prospect’s satisfaction level (have the same person work the deal start to finish and see how much your customers appreciate it.

Dealership Management Should Empower The Internet Department

More benefits:

• Instills confidence in your potential customers when it appears that you have pricing authority.
• Cuts down on time required by sales managers for internet deals.
• Management Must Buy-In At The Appropriate Levels To Be Successful

More benefits:

• Forces frequent and better communication between the internet department and sales managers (this is a huge area of weakness in many dealerships)
• Empowers internet department with authority to deliver the sales price.
• Encourages management support.

With encouragement and hope!

Shaun is the CEO and Consultant for Dealer Advisor

Where will this take us?

Should vendors have booth models? I VOTE YES!!

But, how does a vendor measure the ROI of a booth model?

I have an answer! Wanna hear it?..Here it is!!

First, figure out your total cost for each booth model’s attendance. Room, food, transportation, hairspray, makeup, etc.

Find out the total number of registered NADA dealer attendees for 2008. Each dealer attendees would be compared as an impression, like a banner ad on a website.

Every time your booth model makes eye contact, speaks or flirts with a dealer and gets them to approach the booth, this could be compared as a click on your banner ad. Evey time a booth model swipes a dealers pass card or T.O.’s over to a sales agent, this would be considered a lead conversion or the BMCR or "booth model conversion ratio".

Divide the total number of leads each booth model has acquired by the total cost of her attendance and this will give you the CPLPBM or "Cost per lead per booth model".

From here, you want to track your leads to signed contracts. Next, take your yearly net profit from each signed contract and subtract the total cost associated with each booth model.

There you have it!

This simple calculation will give you an exact ROI for each of your booth models.

Now of course this doesn’t take into account the long term effect of a highly effective booth model. Example: Last year I almost fell in love with the stunning Andrea over at the vAuto booth and this year I was not going to miss the opportunity to get a photo with her. She’s HOT!! Case in point for the long term effect here; I remembered Andrea from last year (though didn’t catch her name) and made sure I stopped by the vAuto booth this year just to see Andrea. And of course ended up sitting through a demo for vAuto.

With that being said..your booth model is "like" a landing page. The more effective the landing page the better your lead conversion. The better looking and friendly your booth model, again the better your chances of a lead conversion.

Be sure your booth model has all the right elements for conversion and you can be guaranteed a successful return from your exhibit in NADA!

Andrea, if you read this..I know there was a connection between us during the short moment we had together, but I’m sorry, I just don’t think it’s going to work out between us. The long distance, one sided relationships are just too difficult, I’m sorry

One of the toughest jobs these days is picking the right technology for the job, so we’re going to take a different approach with something called the “Blueprint Series”.  The idea behind this series of articles is to tell our vendors what we want.  Hopefully they’ll take our ideas and put them into a product we can buy!

For the first Blueprint Series we’re focusing on automotive CRM solutions.  ADP, Reynolds & Reynolds, AutoBase, HigherGear, iMagicLabs, DealerSocket, eLeads, and all other CRM vendors please pay attention…but please do not come in here with comments saying “we do that”, “I am the solution for you”, etc.  WE DO NOT WANT VENDOR SPAMMING IN THIS THREAD.  If you have a selling message, please email Alex Snyder:  axsnyder@checkeredflag.com and he will point you in the right direction.

Dealer Refresh crowd – here’s your chance to put all your wishes on the table!  Please use the comments link to add your thoughts.

Starting with Alex’s first CRM wish:  Coming from a dealer group with competing franchises all on the same stretch of road we are prone for duplicate leads.  I’d like to have a single customer base, inside our CRM solution, that allows for a separate salesperson, salesmanager, BDC agent, service writer, service manager, etc to be attached to a single customer record for each store.  I’d also like vehicles of interest and vehicles owned to be unlimited for each customer record.

My Honda and Toyota stores are less than a mile apart, so I’d like to have a customer be able to have an interest in the Accord and the Camry….and have a different salesperson for each car.  I’d like to be able to send marketing messages on both the Camry and the Accord to that customer.

Yes, I understand this could get messy in the database, so we’ll have to figure out a way to clean things up.  However, I’d rather have my CRM cater to the real world than have to make the real world cater to the CRM.

I didn’t get much time on the floor this year as I have in the past. The crew over at MileOne kept me busy at NADA 2008. There were several people that I was supposed to stop by and shake hands with but I just never got around to it, so I do apologize to everyone that I was not able to connect with.

Being my first time there, I thought San Fransisco was wonderful. The weather was fantastic and the city provides an atmosphere like no other. However, in my opinion, this was not the best location for NADA. Having to travel outside between the West, North and South halls of the Moscone Center was a pain in the a$$. Thankfully the weather was nice and the AutoMotion girls were always out side to greet you with their sexy smiles and great attitude between buildings.

Compared to last years NADA Review this one will be a quickie. I only had the chance to visit a hand full of vendor booths this year;

I’ll start of with onecommand (formally know as callcommand). The demo was impressive and they seem to really know their product. Having one program that can take care of your sales/service email, voicemail and text campaigns is strong. I also like the fact that they have aligned themselves with some great companies like ExactTarget to help guarantee email delivery.

I sat through a demo with Autobase CRM to review the new features (features that should have been apart of the CRM years ago). That’s all I’ll say about that.

Once I actually FOUND the Dealer.com booth (hidden in the corner of the West room) I was able to get a taste of their new TotalControl Dominator, allowing dealers to control their own SEM campaigns. If this works as well as it demo’s, it’s a homerun.

I made a quick stop at the Polk booth where they were touting their Polk Lead Scoring.

TimeHighway has added a few improvements and a new look to their online service scheduler.

I stopped by the ClickMotive booth to check out their new Flashy Websites. The sites look good, but I’m still a leary about all the flash and stuffed HTML in the background.

vAuto continues to build upon their product and continues to impress. Their tool is so clean, it has one of the best looking interfaces for any software program in the dealer industry. I have never used it but if it applies everything that Dale Pollack teaches, then I would think this is one program worth taking a look at.

Last year the eBay booth was PACKED as they touted their eBay Local program. This year..dead. At least every time I walked by. I have to wonder how many dealers signed up for eBay Local last year but are singing a different tune this year.

Some of your more aggressive CRM’s are learning how to tie in personalized video responses in their systems and are building action plans according to whether or not the customer actually watches the video email. NICE!

After attending NADA for the last 4 years, there really isn’t a lot of new stuff to see. Yeah, some vendors will add new features to their products and every now and then you might find something that peeks your interest but overall it’s the same stuff year after year.

I overheard several discussions where dealers are searching for quality SEO vendors. Does this mean dealers are catching on to the snake oil SEO vendors in the past and are now fed up with it?

WHERE ARE THE HISPANIC MARKETEERS? by 2050, Latinos will be 29% of the entire American population but yet I only ran across one Hispanic marketing vendor. Props to Larry John Wright Morales, Inc.

Of course the best part of any NADA is the networking and the PARTIES!

The Chase Bank tequila tasting party pulled a nice crowd. Getting to taste 1,2 or 8 different tequilas was intoxicating to say the least. I stopped by the DealerTrack party for a few minutes then ended up at a small restaurant and bar called Annabelle’s while catching up Jesse and the Homenet crew.

Blue Flame6, DealerSocket and Century Interactive threw a way cool party calling it the “The 3 at the 4“. Each invitee had to arrive in a group of three and they were serving these tasty drinks called a “Threesome”. Very Nice!

The last party I attended was the ADP Reynolds & Reynolds party at City Hall. It was OK, the lack of Bombay Sapphire left me a little disappointed. The party had me feeling quite young, if you know what I mean.

A quick thanks to Joe Vraneza and the KBB crew for dinner Sunday night and Lance over at CarFax for a wonderful dinner at Mccormicks and Kuleto’s Monday night.

So what did I take away from NADA this year?

Dealers are STILL LOST! Seriously. Sitting through some of the presentations and over hearing conversations from other dealers, it’s crazy how much they still don’t get it. They still don’t get technology, they still don’t understand today’s consumer, they still don’t train their sales people how to be effective on the phone and how to answer internet leads in a timely manor. The list goes on and it amazes me. How has this industry survived?

Here are a few of the cars.com commercials aired during the superbowl. Advertisers paid around 2.6 million for 30 seconds of air time during the Super Bowl XLI.

I thought they were average at best. What did you all think?

AOL Autos dropped AutoTrader and has selected Vast to power AOL Autos’ used car marketplace. The changes are scheduled to launch on AOL Autos in the first quarter of 2008.

Apparently AOL Autos and Vast.com are setting out to offer something a little different for the consumer and dealers.

"A rich set of search and filter tools that will make it easy for consumers to search for and find the used car they are looking for. Vast.com’s robust optimization technology will ensure that consumers are presented with the cars most likely to convert to sales, resulting in higher quality leads for dealers."

Something else I found interesting; dealers have several options in the way they pay and promote their inventory on AOL Autos.
It’s something a little different then what we are used to.

I had the opportunity to speak with Doug Eddy, Director of business development for AOL Autos and Kevin Laws, CEO Vast.com about their joint venture.

Jeff: Dealers depend in part on portal traffic.  The portals have traditionally been powered by either AutoTrader or Cars.com. Do AOL Autos and Vast bring something different?

Doug: AOL’s new used car experience is really focused on bringing something better to both the consumer and the dealer. For the consumer, we want to provide the most complete set of listings to search, along with the best search tools. This is very different than just providing cars to our users from a restricted set of dealers. For the dealer, we want to make sure the money spent goes directly towards creating car sales, not just towards paying to appear on AOL.  That’s why we call it the open marketplace.

Jeff: What do you mean by “open” marketplace?

Doug:  It’s “open” in the sense that everybody can participate. Rather than displaying the inventory of just one marketing partner, AOL will now show any car – even if we aren’t paid to show it. This means AOL Autos will offer a highly user-friendly experience, allowing users to search across the broadest set of used car inventory in a single destination – over 3 million used cars. It’s still a marketplace in the sense that dealers can absolutely “pay for performance” through their existing marketing partners – but they don’t need to pay to just be included in the experience.

Jeff: Describe “pay for performance pricing” – you mean paying for clicks?

Kevin: "Pay for performance" just means that you set the price you want to pay, but you don’t actually pay it unless you get the result you were looking for. Depending on the deal you have with your marketing partner – that could be a click, a lead, a call, or even a sold car.  The bigger issue is that you can choose on what basis to pay. For example, you don’t need lots of leads on a Ford Escape Hybrid on the lot – it’s going to move anyway. Why not pay nothing for that, and instead pay a lot more for that car that’s been on the lot for more than 30 days?

The open marketplace supports all of that. You should only pay for what is valuable to you.

Jeff: How does a dealer go about figuring out how to promote at a granular level?

Kevin:  With Vast.com, the dealer doesn’t have to.   In a sense, the open marketplace will do this automatically – it doesn’t just put the cars with the highest paying leads at the top. The system automatically takes into account the likelihood that car will appeal to a customer. A car that costs $10,000 over blue book is not likely to generate a lead. No matter how much the lead is worth, Vast won’t put that car at the top. The dealer doesn’t need to do anything to take advantage of that capability – the system will automatically take into account both payment and the likelihood that the car will actually generate a sale.

The other capability – the ability to set the price per lead (or even sale) – is one of the main reasons we are working through existing marketing partners. They can optimize for you, rather than having each dealer try to go down to that granular level.

Jeff: So the search results are based on an algorithm that returns the customer the best “value” for what they are searching for?

Kevin:  Basically, yes.  It tracks what customers are most likely looking for given their behavior so far.  Sometimes that is best value and sometimes it is some other aspect, like right color.  The algorithms automatically match what the customer is looking for to the car most likely to actually become a lead and a sale.

Jeff: What do you need the auto marketing partners and Internet service providers for?  Why not go direct to dealers?

Kevin:  This is actually very related to the last 2 questions. We don’t want to make a new system that the dealers must learn. Instead, Vast’s mission is to “innovate from within” – working with existing channels to make the buying and selling process more efficient.  This way many dealers will participate automatically without having to do anything but choose the right marketing partners.

Additionally, Vast is focused on deep technology to make automotive buying for used cars work better on the Internet. We don’t have a sales force or account managers to contact dealers directly. Instead we have the technology that can execute promotions in an innovative way, which gives the service providers better capabilities to market to their dealers.

Jeff: Who are the current marketing providers? My readers would like a list of partners they can work with.

Establishing a relationship with Vast.com / AOL Autos is fast and easy for your marketing partner, so any partner you work with today will be able to manage your listings on AOL Autos.  Vast.com and AOL Autos already have relationships with many Automotive Service Providers such as AutoByTel, Zag.com, Dealix, and AutoMart.  To find out if your service provider is a current partner, please email us at dealers@vast.com.

Jeff: Is there set pricing or are the marketing partners establishing this? And, will some marketing partners be able to offer higher placed listings?

There is not a fixed price that will be charged for promotion through your marketing partner. Many existing marketing partners are including it as part of the program they already offer (either fixed fee or cost-per-call/lead). You may not need to do anything if you already use one of the existing partners. 

Some marketing partners will be able to get higher placed listings based on what they pay to participate in the open marketplace.

Jeff: How does this compare with how AOL currently promotes dealers?  How will the relationship with Vast.com change the current way dealers work with AOL?

Doug:  Today, used car searches are sent to AutoTrader.  With this change, dealers just want to make sure their current service provider is putting their inventory in Vast.com, or they can put it in themselves: http://www.vast.com/info/automotivedealers.

For those who are interested in broader packages, we absolutely have the capability to sell those as well. Please contact us at AOL.

Jeff: When will the AOL autos used car marketplace be available?

Doug:  Mid-to-end Q1, 2008

Jeff: What should interested dealers do next?

Kevin:  Two things:

1. Immediately talk to your dealer service provider (CDM Data, Dealer Specialties, eBizAutos, Homenet etc.) and ask to have your feed sent to Vast.
2. Talk to your marketing partner to make sure they are marketing your
   inventory on AOL Autos and understand what promotion and positioning
   you get from their program.

You can also contact Vast.com directly:  dealers@vast.com or visit http://www.vast.com/info/automotivedealers.