How To Attract & Sell The Millennial Car Buyer (PART 10)
TRANSCRIPT: We talk about your overall marketing mix, your overall marketing message rather, and what its focus should be. You really need to focus on that 61%. You need to make sure that to attract the connected buyer, our marketing has to address their fears. Right? It has to address that we have hassle-free or easy buying. Right? 99% of people expect a hassle when they start the car shopping process.
We need to focus on our huge selection. Right? Think CarMax. A lot of the ads they’re doing today say, “Hey, just come to us. We’ve got every make and model in stock. You can test drive them all.” We need to guarantee repairs. Right? We need to focus on that. We need to show that we’re guaranteeing repairs. We have great deals, friendly staff. We’re customer-focused. We offer free lifetime whatever, oil changes, whatever, tire rotation. See, it’s the confluence of all three of these in everything we do.
Our marketing message needs to take into account no hassle, great service, and fair pricing, and it needs to have that happen in every message that we put out there. Now that was messaging. We could do a whole show on just that. The other two attractors of the 61%, and the service customer just as important. Right? It’s messaging, it’s reputation, and it’s pricing.
For reputation, I want you to know, real reviews matter. Okay? Gaming is a short term play, I mean really short term. The dealers who are still gaming today end up losing after a couple of months. 99% of consumers, they start shopping and they expect a hassle. If you have negative online reviews, that seals the deal with them. Okay?
When we talk about reputation and online reputation management, we could do a whole show on that, and we did.
We already did. This is what we learned. We learned that just one negative review can reduce sales and service traffic by 22%, and 4 negative reviews can mean a 70% reduction in sales and service traffic. Those who do arrive after reading negative reviews, they look for anything that validates the negative online reviews that they saw. Okay? You’ll learn all that in this series. Okay? Improving an online reputation shouldn’t be expensive. You can even do it yourself.
Now in this series, how to gain and maintain a five-star online reputation, that’s on SteveStauning.com. Again, go to full series videos on the right, slide down until you see that. I give eight steps to getting a great reputation in there, and they could all be do-it-yourself, but step three is the most important. Step three is you need to repair or replace those things that are causing the issues. Because there are no magic reputation bullets, I don’t care what your reputation management company is telling you. You’ve got to fix the things that are broken within your dealership.
All right, that’s messaging. That’s reputation. Let’s jump into pricing. Let’s jump into pricing with connected customers. Some of you still put MSRP out there and nothing else or you’re using cost plus pricing on your used vehicles. Those are relics. Okay? Using these today can turn off both the 39% and the 61 percent. Sales success with the 61% is driven by transparent market-based pricing. Old school online pricing doesn’t help you hold gross. Okay? It really doesn’t. You know what helps you hold gross in the store. It’s discipline and it’s process that help you hold gross.
Now this dealer, and we’re going to look at a commercial from one of their other stores for this dealer, this dealer doesn’t show their price for their new vehicles. You have to click to see the price because it’s too low to show. That generates a lot of leads. That raises the 39%, but it also scares away the 61%. If you’re going to do old school pricing like this online, you’ve got to have old school commercials which we’ll look at one in just a second.
When we talk about pricing, I want to contrast between millennial friendly pricing, MFP, and old school pricing, OSP. Whichever you choose, it doesn’t make you a bad person, but you got to be all in. Okay? When we talk about old school pricing like this, I want you to understand, it’s harder each day. All right? It’s harder each day to get people to come into the dealership.
Because everybody, they’ve looked at 10 dealerships, 9 of them have price and you’re the only one who doesn’t. Okay? They’ve called you and they just your ballpark. You’ve got a choice. You ballpark them, they ain’t coming in. You don’t give them the price, they ain’t coming in. It’s harder and harder each day, and old school pricing can hurt your reputation because you’re grinding for everything. You still earn gross, but when you’re old school, everything’s a grind.
You might want to look at your turnover, too. The dealers that I know that do old school pricing versus millennial friendly pricing have higher turnover. You do, I’ve seen it. Now it’s empirical data, I don’t have the study to back it up, but I’m telling you empirically those that try to grind for everything, that will not show pricing online, you are seeing your turnover go up. All right?
When you have old school pricing, you rely more and more on sales leads and calls because you have to get people to click to get our best price, get pre-approved, value trade. By the way, those three, those are great. Those are three great buttons, and if you do my website series you’ll know those are three great buttons to have on there. If you want to use old school pricing, attracting the 61%, you can do it but your marketing is going to be a little more expensive.
When I say expensive marketing, what am I talking about? What sort of marketing drives the 61% percent into the dealership where there is little to no price transparency? We’re going to look at a commercial right now that ran here locally back in November from a dealer that uses old school pricing.
The race to number one is on. This dealer is rounding the corner to the end of the year, and we need to sell lots of new Chryslers, Dodge, Jeeps and Rams. What does this mean to you? Unheard of low prices on over 2,000 new Chryslers, Dodge, Jeeps, Rams and certified pre-owned vehicles. This dealer is the world’s largest Chrysler, Dodge, Jeep, Ram dealer, and we intend to be number one again in 2016. Call 800-635-8000, or go online and check out the Black Friday event at our dealership.
We’re back, and you know what? Let me be clear, those guys are successful. This dealership is extremely successful. They’re the world’s largest Chrysler, Dodge, Jeep, Ram dealer. Right? The northwest largest GM dealer. I think they are the number one Mopar accessories dealer in the world. The fact is they’re successful, but it’s getting harder every day. I know people who work there. I know people who have worked there. My point is, is that they use commercials here locally.
Now they sell a lot of stuff that’s not local. They’re the number one single point Internet dealer in the world. The fact of the matter is, is what they have to do locally is they have to use expensive marketing like that to drive people in, because they’re not able to do it with reputation, they’re not able to do it with pricing, and their traditional messaging doesn’t work. They have to use expensive marketing to overcome the old school pricing.
When we talk about millennial friendly pricing, this is connected customer friendly. It’s market-driven, and if you’re doing millennial friendly pricing, you know it’s getting easier to do business every day. By the way, the dealers who I work with who use millennial friendly pricing, their grosses are just as high or higher than the old school guys, they really are. You still earn gross if you have processes, discipline, and you do something called seed planting, which we’re going to talk about in just a second. You have to have processes and you have to have discipline. If you don’t have those and if you’re trying to do the old school stuff. Millennial friendly pricing online, but you use old school talk tracks. Guess what, you do the triple discount.
Now we’re going to walk through a buying process in part two. We’ll talk through that process. When we talk about discipline, it’s really just the discipline to defend our price, the no triple discounting. In the seed planting is where your team does a good job of planting the seed to defend your addendum that you’ve added to every vehicle. You’re priced to market online with the disclaimer that dealer added options may not be included, and the customer shows up at your lot and they see that you’ve added a $700 addendum to every vehicle. Okay? You need to plant the seed to hold the gross.
Let’s say you’ve added window tint and other things. Planting the seed just properly defends this.
It’s something like this. When the customer shows up, before they even notice the addendum, you point right to it and you say, “As you know, the factory builds vehicles for the entire world, and what’s good in Alaska isn’t always best here in Texas. That’s why we equip every vehicle with the Lone Star convenience package. Now this package includes …” and you go through. Once you’ve done that and you’ve pointed to it and you were transparent in the dealership, you can move on if you’ve planted the seed, if you follow your process.
Now why would I want you to do millennial friendly pricing? Why would you want to do millennial friendly pricing? The fact is Forbes has told us that millennials are less likely to phone businesses. That means they’re less likely to call for price. Okay? Deloitte tells us that more than half of young buyers prefer to purchase without negotiating, and Blackhawk Engagement tells us millennials are sensitive to price. Of course there’s the 61%. 61% of buyers make zero contact with us before they show up at our dealership. If you’re doing old school pricing, it’s expensive to get that 61% to show up.