At the Internet Sales 20 Group in Dallas last week, Todd Dearborn presented an educational session focused on strategies for setting optimal online prices. Below are some highlights from his presentation.
As the Internet matures, the online prospect has gotten smarter – especially when it comes to pricing. Online prospects now come to you in a variety of ways, and they often see several different online prices for the vehicle they’re interested from various lead sources before they submit a lead. Therefore, it is crucial to know your lead providers and how they differ from one another in terms of how they present pricing to the consumer.
Here are some tips on how to get to know your lead providers:
Lead Sources: No Two Are the Same
Know the lead provider landscape. CarsDirect has been displaying prices to online consumers since 1999. TrueCar is a new player, while AutoTrader and Cars.com are breaking into the game. Carwoo features a reverse auction structure.
Do Your Due Diligence
When evaluating lead providers, make sure to clarify the following information when it comes to how they handle pricing:
- How are incentives handled? What about customer and dealer cash? This can make a big difference in price.
- How are doc fees and other “dealer fees” handled? For example, in Florida there are different interpretations of what needs to be disclosed in the price of a vehicle.
- How does the provider’s configurator work? Make sure to clarify how it prices options and whether it factors in region-specific trims.
- Do you as the local dealer have any input on the price that is displayed for consumers? If so, take advantage of this capability.
- Are leads from your provider organic, or recycled from another provider? It’s important to know the exact source of each lead.
- Are prices extracted from sticker or from invoice? Again, this can cause significant swings in prices displayed to consumers.
Knowing the answers to the above questions can better position you to respond to customers who come from various lead sources. Having a clear understanding of the price the customer has in mind from the lead source they used to submit the lead gives you valuable context as to the customer’s frame of mind when they speak with you.
In a future post, we’ll look at communication strategies to use when responding to questions from prospects that have seen several conflicting prices online.