Best Practices

Price or No Price? Pricing your inventory.

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.

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!


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

I am a true internet car guy and the Vice President of Marketing at DealerOn. My automotive career started in a parts warehouse after I fell in love w...
Maybe it varies by dealership, or by make. But I have went down the route of giving prices ( a few hundred back of invoice, less all applicable incentives ) to every customer who asked for you. In my experience, perhaps 5% or less of customers who receive a price quote end up buying from our dealership. The vast majority of these customers end up going elsewhere, and getting a $50 better deal.

We have much better results with being vague about price. I much prefer to do business the first way, but if being vague results in more sales ( for us ), then it's hard to justify going the price quote route.
No matter how you do it, there still has to be some talent behind the message to make a sale. Selling cannot be done by robots or order takers - basic follow up can be, but not selling. Delivering a price, or avoiding the deliverance of a price is selling, and a good salesperson must have talent.
You make a great point Alex. Talent overcomes objections and sells value in much more than price alone.
  • M
  • February 29, 2008
Yep, it's definitely all about phone/email skills. Put some of us in a room with a "no-price" rule, seated next to a typical ISR who's allowed to quote price, and let's see who gets more appointments.

To me, the whole price thing is a non-issue. Not that it isn't an issue, but that there's just no solid resolve to it... depends on who's on the phone, what kind of customer you're working, what region you're in, etc. I have no interest in approaching a department with a "fixed" approach to that question until some kind of revolution comes along in pricing structure. Oh by the way, there are revolutions out there... I've tried to bring dealers to that level but the buy-in necessary is just too much for them to comprehend. The administrators as well as the sales staff need to be in concert to really get to that new level of Internet pricing/buying. Not happening anytime soon.
There is not a definitive answer as to whether to quote price or not that works for everyone - why? Your local market should drive this decision! (and everone's market is different). We constantly mystery shop our market by each brand we sell, and what we see is what drives our decision. If all of our Brand X customers get price quotes from our competition, then we quote as well. If the competition quotes aggressively, we quote more aggressively. If Brand Y customers get no price quotes from our competition, we don't quote at all, or possibly just quote price ranges. I don't believe a universal "quote every customer for every brand every time in the same way" will ever be the best answer to this issue. Your best decision will be driven by what your customers are experiencing within your own market, and how to best work your market with that knowledge. Kevin Frye/eCommerce Director/Jeff Wyler Automotive Family
  • L
    Lao Shi
  • February 29, 2008

This issue always amazes me whenever it comes up. I have shown dealers that have the philosophy that showing price and inventory is not in their best interest. All the client has to do in most cases is go to the OEM’s web site and select the vehicle (S) of choice, put in the zip code and the inventory will show up with prices and in many cases OEM incentives and specials. In many cases the inventory is booked on the OEM’s site before the inventory reaches the dealer. And.....yet many managers think they are being smarter than the consumer. It reminds me of the barn yard hens and the "crabapple dance"

I wonder sometimes where the knowledge is in the planning of some dealer’s business plans. The decisions that are made predicated on beliefs that they are controlling the consumer.

The consumer can be controlled to the level and degree they are kept ignorant and uninformed. Today there are less & less consumers that are in this category, many consumers are more informed, more knowledgeable than the poorly informed sales professional that is trying to sell the vehicle.

During this period of uncertain economic stability (how long will it last) the smart, knowledgeable dealers who are aware of the market place and what is going on will overtake many of the dinosaurs in the industry, and there are some big ones, and they will be the survivors. These dealers will embrace the technology that is available & developing; make their operation, DMS, sales strategy and staff more efficient.

There are always going to be varying opinions on this subject. Kevin Frye commented on adjusting to your current market and react in a similar manner as your competition. You absolutely need to aware of the pricing structure your customers are receiving from your direct competitors and mystery shopping will get you these answers.

To take this subject in a slightly different direction, let me ask you this. Do you simply assume that every customer inquiring on the internet is asking for a price? Is it an unwriiten policy that whenever we receive a lead that we need to discuss price? I don't think we do.

The customer, many times, will lead you in the direction they want to go. When a customer asks a specific question in the initial lead, answer that specific question. Attempt to create a dialog regarding their question. The customer may already have a good idea of the price they can buy the car (See Lao's comments). Why open up a can of worms that need not be opened?

My thoughts are simply this...Give the customer what they are asking for. Do not attempt to be a mind reader. If they want price, then price them the car based on sales managements strategy.

If you throw up a blockade and put the customer on the offensive by dancing around or ignoring their questions, you are destined to fail.

  • J
  • March 2, 2008
This seems to be more of an issue for new cars, but as someone who works primarily with used car stores, I see a huge difference in the number of leads for available pricing vs. no pricing. Our customers who don't like to display price see a lot less leads than those who show a price up front.

One thing is certain, if you don't have a price displayed and a customer asks for a price you have to tell them something and not dance around the dollars. Sure they're going to shop around your competition, but if you can sell the value and make them believe they won't be better off saving $50 at another dealer, you're working them the way they need to be worked. Sales starts with selling yourself, so whether it's an email or a phone up you need to get that person thinking they should be dealing with you and not the other guy.

With that said, I CAN see how the issue is a difficult one for the new car stores.
I agree this is always a hot topic. For the most part, the first thing a surfer looks for is the price. I know I do. Think about your last Internet purchase and the steps you took in making your buying decision? I just bought a blue tooth ear piece. I knew what brand I wanted and googled the heck out of it to find where I could get the best price, and I bought it.

There is a distinction between the price offered in your inventory listing and what you quote back (if you quote) in your lead response. I know that it is more aggressive then ever, at least in my market it is. I have never seen it this aggressive.

I think it takes a healthy mix of great presentation and follow up. I have made special templates that build value in not only my price, but the buying experience as well.
Price is often such a touchy topic, where old-school sales people (most of whom are now our managers) don't believe the customer has any business knowing the price, and it takes some coaching to get them out of that thought idea.

Customers will shop you regardless of you giving them a price or not. The difference is, give them a competitive price along with reasons to buy from you, and they'll come back. Quote em MSRP or nothing, no matter what you try to give them, they won't come back.

Good stuff!
Thank you all for commenting on this topic. To Gilbert's point, I find it interesting that there's a similar debate among dealers regarding whether to display price or not on the dealership website. Here's a warning... if you're displaying price on your website and then dropping into memory loss mode when someone engages you about price, you will lose more than you'll win.

Seems to be common in everyone's comments that talented, genuine sales people are of superior value. If all you're offering is price, you won't be the top salesman in your store.

How many products would you buy that showed you a price online or on the shelf, but changed when you got serious about purchasing it? Blind purchases are almost exclusive to that which we know will not fluctuate wildly and that which are necessity (groceries, gas, beer, toothpaste, etc...).

I agree that one-size fits all is not the prescription that will cure every dealership. But, in my opinion the underlying lesson inside the price or no price debate is customer treatment and a sales approach that is relevant to consumers today. Any form of games and BS dished out on customers is simply the wrong way to do it. A good and decent human that relishes in manipulating the customer into the dealership so they get a shot to "take their head off" does not possess a properly functioning brain. No person with their head screwed on right enjoys being taken advantage of, intimidated or controlled by a car salesman. Do the right thing! Price or no price? If price would be important to you, then ask yourself how you'd appreciate being treated, what would make you consider a dealership or salesperson... once you figure that out, treat your customers that way. Thanks again for all the comments thus far.

With encouragement and hope,

You got it right Shaun. The Golden Rule......RULES!
When it comes to pricing vehicles with a customer who isn't in front of you there seem to have always been the same two arguments:

1. Give them a price and they'll probably call your competition where they will get a lower price and never come see you. (Shared most commonly by the Joe Verde Group)

2. If you don't give a price they will HAVE to call your competition, which will lead them to get a price and they will never come see you. (Most commonly preached by Grant Cardone)

After working in two good size automotive groups who used these opposing philosophies I realize you can experience success in both environments.

Everyone who has been in the car business for more than five minutes knows that you will have a better chance of maintaining profit if you can build some rapport and investigate. The telephone and online chat offer the opportunity to build rapport to some degree, but being face to face is the best by far.

If everyone blogging were being honest I'm confident we would all say: "I'd rather present & demonstrate my product before quoting price so that I can get them emotionally engaged."

I would agree with anyone who thinks that.

The challenge with this line of thinking is that it isn't about what you or I would rather do before quoting price.

The consumer didn't contact you and say: "Mr. Dealer, how do you prefer to do business and handle price. I need to know so I can adjust the way I prefer to make my purchases - this way I can cater to your needs."

When they contact us by phone, email or chat we have to remember that our #1 goal is to get an appointment. The way to get an appointment is to help the customer feel like they will be getting what they want by dealing with you. (This isn't rocket science.)

As dealers, we must remember that it isn't all about us. It's all about the customer. There is a way to work with the customer in a professional manner, address their price concerns AND still have the opportunity to hold a fair and reasonable profit at the store.

Here are a few suggestions for handling prices with consumers in today's economy and every other economy for that matter.

1. Honest people have nothing to hide:
Nobody ever won an argument with a customer. If a customer asks for a price there is NO LOGICAL REASON to tell them no. As someone else mentioned earlier regarding new vehciles: "They can get the price from the OEM site..." They can also scroll a 1/4 inch and see your competitors prices on, and any other that has vehicles listed. If you tell them you won't give a price it appears that you have something to hide. If you have something to hide they will keep searching for the Dealer who doesn't.

2. It's not about YOUR process:
I know this one won't be popular in the community of people who make their living telling you to follow their process but this is simple truth.

Answer this question: Would you rather buy from someone who does things your way or their way? (Of course you said 'my way')

That being said - we need to be willing to help the customer see that we will do things their way; or help them see why going a certain direction is beneficial to THEM.

3. Choices + Skill = Profit:
There is a way to give the customer what they want while still keeping a fair margin for your dealership and best of all, this isn't difficult or even new for that matter.

Give them at least three options when they ask for a price.

Option 1 - Exactly what they asked for.
Option 2 - Something that costs less like a model down, a lease, or a certified pre-owned vehicle that will save them a good amount of money
Option 3 - Something with more options that costs a little more.

Offering options like these shows the consumer that you have nothing to hide. It also shows them that you're willing to save them money. Finally, the higher priced option shows that you're willing to help them with something they may like more and you aren't afraid to share that price as well.

Plus; since it's a numbers game there are common sense mathematics involved. If I give you three chances to say yes, I have better odds of selling you something.

Pricing vehicles today is no harder than it was 15 years ago. We still need to use great selling skills to help the customer realize that it's the best decision in the world to do business with us.

The internet is just another medium for us, as dealers, to communicate our message and prove that we can serve the customer better than any of our competitors.

Prove that you are the best person to do business with and people will still pay more to work with you than the guy down the street. All you have to do is look at what they paid for the car they are about to trade to understand that this philosophy is true.

Going online doesn't mean you have to put your sales skills on the sideline. It actually offers you more opportunity to prove that you are the best of the best!

Helping the best get better,
Mat Koenig
Sales Training Manager
  • S
    Stan Sher
  • November 15, 2008
Too many times people think that if you give a price, it gives the customer a license to shop. Well they are already shopping so it makes no difference, they will still call other places and try to find a deal. The way to grab them and caputure them is by adding personality and starting to go for building a relationship. I would give a price to give them what they want and in exchange I will go for more out of them. Price will not be the only factor to sell these people a car. There are exceptions to the rule too. Ask the right questions, learn about your customer and let them tell you what makes them buy the car. Use it to your avantage and go for the close when you can. If you give a higher price, just do it to satisfy them. They will buy from whoever makes the experience better.