How To Sell Cars Online or Offline (PART 9)
TRANSCRIPT: “Steve, you said self-desking.” Yeah, I know. This is where you hand them an iPad. They already know what their car is worth before they ever came into your dealership. They already know what your car is worth, again, before you ever set foot on your dealership lot. When you allow them to self-desk, you can walk them through the process. They can play with the options. This is AutoFi. It’s a great tool. They can play with the options. They chose the lender and their payment. How about that for process transparency? People can actually do this for themselves.
“Steve, if we do this, they’re going to select themselves right out of the vehicle.” No, they’re not. They’re here to buy. They already know what it costs. There’s going to be so much process transparency, they’re not going to be focused on your price. They already know your price or the price they’re going to pay before they came in.
“Now, Steve, what about F & I products?” Let me explain to you here. Dealers who are using software like AutoFi for self-desking are also using it to present F & I products. Whether that means just an education where your product specialist or your sales person takes them through and keeps them engaged or its actual selling of the F & I products, you know, without going into F & I, that’s up to you. Empirical data, that means data that people have been testing because it hasn’t been around forever. That’s showing that F & I grosses are actually higher when buyers are presented with options to themselves. That means when a buyer can present the option to themselves, your F & I grosses become higher. How can that be? It’s because F & I products make sense. Things like LoJack. Things like gap insurance. These really make sense if you just give me a second to learn about them.
“Steve, if we do this, does this mean we’re a one-price store?” There’s so much talk about one price out there, I want to be clear. It doesn’t have to mean that. In fact, I don’t want you to be a one-price store. When you announce yourself as a one-price store, that’s had mixed results at best. Right now, your price to market online and off. That’s a typical store. I want you to defend the price and any addendums and make yourself an our-price store, not a one-price store. When you say, “We’re a one-price store. No haggle, no hassle,” that tells the customer who hasn’t come into your dealership yet that is their lowest price. It means that they can shop it elsewhere.
By the way, talk to the one-price folks. They have to defend their price the minute the customer walks on the lot because the customer still believes in their head, the ones who do show up, “Eh, you know, they’re going to take another $1,000 off of that.” You do have to assume the sale throughout.
What is an our-price store? Today, it’s about the experience but let’s hit on this point quickly. We’re talking about experience today not pricing but today, you have to be priced to market if you want to attract that 61% who just show up and buy. Sixty-one percent of buyers make no contact with you before showing up at your lot. That means they already know the price. If you just show MSRP online, you’re cutting yourself out of most of that 61% market but you have to defend your online price so that it doesn’t become a starting point for negotiations. That’s what an our-price store does.
If we think about what’s happened with one-price stores out there, I put Surprise Toyota up here. Toyota Surprise and Avondale Toyota. These stores are 20 minutes apart from each other. If you know anything about these store, Avondale Toyota has been a one-price, one-person store for a long time. They’re successful at it. A new point went in 20 minutes away. These are both in the Phoenix, Arizona area. Surprise Toyota, Toyota Surprise is a Penske store. They tried to be a one-price store. They just announced recently that they’re abandoning that effort after, I think, more than a year. They couldn’t make it work. It was too hard to do.
My argument is they should have been an our-price store. They should have been priced to market and then defending that price when the customer walks on the lot. That’s where they would have had the success.