May
31
2011
Some frustrated customer advice to new car dealers
Author: Barrett RaineyIn my three score plus 15, I’ve bought a lot of vehicles. Cars, trucks, SUV’s, travel trailers, motorhomes and a couple motorcycles. It would be more correct to say I’ve spent a lot of money on toys for a long time. The point is, I’m no stranger to showroom or process.
So why do what passes for “salesmen” these days think I need to understand the company, be pushed and shoved through corporate “sales steps” and be talked to as if I’d just landed on the planet?
I admit: I’ve bought more than my share of new cars. No matter the chronological age, I’m just a kid around that new car smell. Which, by the way, we’re now being told, is from chemicals in the manufacturing process that are harmful to humans. Who knew?
Some guys buy shotguns, dozens of bowling balls, golf clubs, campers, pick-em-up trucks, fishing gear, airplanes or other fancy toys. I buy cars. It’s a continuing family wonder how I’ve stayed out of the profession.
These days, we’ve been in the market to replace Barb’s perfectly good Malibu. It’s a fine car but it’s got 18,322 miles on it. First time that’s happened in this family. It’s got a lot of bells and whistles, all of which are in great shape. But we’ve got the – well, you know – itch.
It’s been over a year since we last bought a new vehicle. Mine. Which has at least a year left in it. But we’ve had Barb’s for three years and I’ve wondered why. Making contact with car dealers this last week, I now remember. It’s a real pain in the ass! Discordant memories have come flooding back as I try to give some poor hunk of metal a new, permanent home. Well, permanent in my world.
More than half a dozen Internet contacts have shown dealers – all of them – have a great deal of work left to do to make electronic selling as effective as it could be. Of the seven emails used to contact a dealer about a specific vehicle, four got no response. One resulted in a young woman calling to say a salesman would be calling in an hour. Now, eight days later, he/she hasn’t. One salesman called to say the car I wanted had been sold but he would check inventory and call right back. One: if it was sold, why was it still listed in inventory? Two: if he knew it was sold, why not check inventory before calling so I had an alternative to consider while I was still a possible customer? And, three: if he was to call “right back” 10 days ago, why didn’t he?
Just one person responded by email with the “Internet special price.” Which was about $300 less than MSRP. Big deal. He also wrote, “Of course, we must see your vehicle because, when trading, it takes two cars to represent both sides of the transaction.” Now why didn’t I think of that?
But, despite the young man’s ignorance of the many years of customer experience – some if it before he was born – his response highlights the problem with Internet car sales: how to accurately evaluate the trade-in. In this case, I would have to drive 150 miles round trip – at $4 a gallon for gas – for an eyes-on appraisal. And we may not end up getting together on price. I’ll bet this kills a lot of prospective deals.
So, I have a suggestion for the car sellers of the world. Two national companies – Kelley Blue Book and NADA – publish monthly valuations for nearly every kind of vehicle. Nearly all dealers use them as the authority on vehicle appraisals. Those appraisals are based not just on model and year but also on condition: excellent, good, fair. A number of items are listed to make such judgements: mileage, condition of body, glass, tires, interior. So it’s not really a subjective situation.
My suggestion for dealers is this. When considering a trade with an unknown vehicle, develop a sliding scale value to be used with the distant potential customer. Whatever number Kelley/Blue Book gives for each condition, use that as a place to start.
So, if I say my car is in good condition, use the “good” figure from the books; excellent, poor and so on. If my car lists for $12,000 at the top, $11,000 midrange and $10,000 low, use those numbers in conjunction with the value of the new car. With one caveat: if a dealer inspection doesn’t verify the customer’s appraisal, the deal will be adjusted accordingly. If I overvalue, tell me onsite. To be really fair, if I undervalue, tell me that, too.
This isn’t a perfect solution. Experienced dealers would have to shape it to the reality of the marketplace they work in.
But I’m here to tell you, you’re losing business without something like this in place for a potential deal. I’m not going to drive 100-200-300 miles at $4 a gallon prices to find out there’s no deal. At least using the Kelley/NADA idea as a starting place, the customer would know if he’s in the ballpark with estimated numbers and then have some basis for buying the gas and making the drive. I’d do it.
Suppose, on a daily basis, a dealer has five calls with this kind of situation. Suppose four decide not to make the drive because of the lack of even an estimated set of numbers. On a six-day sales week, that’s a potential of 24 lost sales; on a 52 week year, that’s 1,248 people who were interested enough to make contact. If a dealer could convert even 10% of any contact to a sale, that’s 125 new customers.
Note to dealers: The expensive bucket you’re using called Internet Marketing has a very, very large hole in it. Potential sales – like mine- are falling out the bottom. Every day. How long can you afford that?