PowerPoint Presentation

USING TRANSPARENCY AS A COMPETITIVE ADVANTAGE

Winning Strategies for Today’s Consumer-Driven Economy

Presented by:

Jim Radogna

Are you transparent on the phone?

How do you handle internet leads?

In his article Does Not Being Transparent Make You Invisible to Customers, Ron Henson from DrivingSales notes:

“The work I do with dealers affords me the opportunity to review many Internet mystery shops of dealerships all over North America.  It blows me away how many times we ask for a price and get an answer like:”

We'll make you a great deal. When can you come in?

We've never lost a deal over price.  Come on down.

What monthly payment were you hoping to get?

Do you have a trade?”

Is your advertising transparent?

How about your negotiating process? Transparent?

F&I Processes?

Are you upfront about vehicle histories?

Is your pricing transparent?

Do you properly disclose all fees?

The Case AGAINST Transparency…

We have to do whatever it takes to stay ahead of the competition. Everybody else is hiding information.

This way of doing business has been successful for decades.

The chances of getting into a legal bind are pretty slim.

If you give customers too much information they’ll just use it to shop you.

Customers have no loyalty.

Why should we be at a disadvantage by following regulations that our competitors ignore?

The Case FOR Transparency…

REASON #10 – Avoid Legal Problems

State & federal regulators frequently target “non-transparent” dealer practices as unfair and deceptive:

Advertising Violations

Bait & Switch (just get ‘em in)

Failure to Sell at Advertised Price

Internet Advertising (dot.com disclosures)

Mailers

Unfair and Deceptive Acts and Practices (UDAP)

Spot Delivery

Payment Packing

Vehicle History Disclosures (rental, demo, damaged)

Getting “caught” is no longer a just a fine and slap on the wrist. Regulators have begun using the media to penalize those dealers caught in order to intimidate others. Regulators want press, and the tougher the press is on the offending dealers the better it is for the regulators in charge.

The severity of the offenses is often exaggerated.

The social media age brings more long-term consequences and public humiliation than businesses have ever seen before.

Do you want your customers seeing Your dealership on the 6 o’clock news?

REASON #9 – Increase Lead Conversion

The ultimate goal is still to “get ‘em in” and close the deal, but for an increasing number of shoppers, transparency is the only thing that will get them in. Not being upfront about details used to have its benefits. Up until recently, the salesperson could control the selling process because he or she controlled the information. Today, it’s just the opposite - consumers have all the information they need at their fingertips. If you resist answering customer’s questions, chances are you’ll never hear from them again.

REASON #8 – Increase Closing Ratios

Higher levels of satisfaction with the selling process result in higher closing rates and higher sales.  

A survey by Maritz Research of over 163,000 Americans found the following:

64.0% are completely satisfied when one person with pricing authority negotiates the deal vs. 20.7% when two or more with no pricing authority are involved.

REASON #7 – Improve Your REAL Reputation

What Is Your Reputation Worth?

A dealership’s reputation is difficult, if not impossible, to maintain when staff members depend on “old school” deceptive practices.

Customers often make decisions during a vehicle sale transaction that they come to regret after the “ether has worn off”.

You can be sure they’re telling somebody about the transaction. Or perhaps they’re telling thousands of people online?

REASON #6 – Increase Customer Satisfaction

Lack of transparency and old school tactics diminish the customer experience. Nobody likes surprises. Sure, you made the deal but are your customers truly satisfied with your processes or do you just wear them down?

Higher Customer Satisfaction = More Repeat and Referral Business

REASON #5 – Increase Customer Loyalty

Customers only have loyalty if you earn it from them.

Transparent processes help build customer loyalty and retention.

A recent JD Power report highlights a growing trend called 'Showrooming' where prospects sitting in your showroom are actually price competing your deal with another dealership using their mobile devices.

REASON #4 - Your Customers Have Unprecedented Access to Information in Real Time

Consumers not only have more access to information but also have access to more dealers.

In the past, consumers were limited to dealers in their local area. The increase in the amount of information available to consumers has brought consumers a quick and easy way to analyze not only different prices via internet quotes but also to identify who they want to do business with. Customers simply have too many choices and will quickly discard dealers they feel are hiding something. Hiding (or reducing) the amount of information available to consumers will only make them trust you less.

The days of internet-savvy customers being

in the minority are long gone.

The internet is probably never going to take over car buying and it’s likely that dealerships will continue to be the primary way that customers will purchase vehicles. But remember this; while customers may always choose to do business with dealerships, they don’t have to choose to do business with your dealership. Just because customers shop your competitors with a perceived better deal, it doesn’t mean they’ll buy there.

REASON #3 – Reduce Chargebacks

Once the ether wears off and the customer goes home and reads the contract how much do you get to keep?

REASON #2 – You’ll Stand Out From Your Competition

What percentage of dealers are transparent today?

There’s an opportunity to not only be transparent, but to trumpet the dealership's transparency. The "friendly, courteous dealer" claim doesn’t resonate with very

many consumers anymore. However, using transparent processes to clearly demonstrate the honesty of the store can and does resonate.

Progressive Dealers Are Marketing Their Transparent Processes and Customers Are Responding

REASON #1 – Transparency Is What Your Customers Have Been Begging For, Why Not Treat Them The Way They Want To Be Treated?

“The difficulty lies not so much in developing new ideas as in escaping from old ones” - John Maynard Keynes

TRANSPARENCY IS NOT A DIRTY WORD BUT COMPLACENCY IS