Fifth AROW Conference Reveals Changes In Dealers' Approach To Web
By Mike Bowers
The fifth edition of the Auto Retailing on the Web Conference (AROW V) drew roughly 300 car dealers and dealership managers to Orlando this past October to get an update on the latest thinking in online, automotive retailing. Right from the opening bell, it was clear that the more astute dealers are again modifying their own Internet strategies and tactics. Perhaps modifying is the wrong word. Maturing is more accurate. Two years ago, the big automotive research companies like J.D. Power and Forrester Research were projecting that dealers would be doing staggering amounts of business online. Those heady and unrealistic forecasts have faded. And as the predictions are fading, so is the fear of the outside third-party referral services (as this is being written, the CEOs of Autoweb and Priceline – Auto left their jobs within days of each other).
The realization that the Internet will not be having the huge impact that many once thought it would has led dealers to adopt more practical approaches to Web retailing. Instead of looking for hundreds of Internet sales per month, dealers attending AROW V were hoping to find ways to boost closing ratios from 8 or 9 percent to 12 or 13 percent on the 100 or so quality leads an Internet sales might handle in a month. Those numbers are more in line with traditional showroom sales benchmarks. And Internet sales processes are also stealing a page from the showroom playbook.
In a special pre-conference workshop, trainers Kevin Root and Paul Rogers from the Cobalt Group and Robin Eichely from J.D. Power and Associates provided a preview of their joint venture: The e-Dealer Academy. The foundation of the program rests on the fact that people have different buying styles when they are shopping for a vehicle. In the showroom, customers telegraph these styles through their body language, facial expressions, the words they use, and their tone of voice. Online customers also exhibit different buying styles. But on the Internet, it's a lot harder to pick up on the behavioral cues. The e-Dealer Academy curriculum teaches ways to recognize four distinct buying styles, suggested ways that sales reps can adjust to those styles and methods for closing Web sales at higher price points than the competition. The techniques come straight from the showroom
Firm prices online
Speaking of price points, if AROW V is any indication, the biggest shift in dealer sentiment toward the Internet is in the still controversial idea of offering firm price information to online shoppers. And we're not speaking only of invoice and MSRP data. Dealers are coming up with ways to get competitive, firm prices to Web customers.
The topic causes lots of disagreement among dealers who worry that their firm price will be shopped at several competing retailers. The Internet makes that kind of price comparison extremely easy. But overwhelming numbers of car shoppers say that pricing information is what they want most from a dealer Web site. And speaker after speaker at AROW V emphasized the point. Dealers who withhold prices run the risk of chasing their prospects to a competitor.
Dealership trainer Mark Rikess advises many of his clients on their Internet tactics. Here's an example of online pricing grid developed by one of Mr. Rikess' clients. Web shoppers are encouraged to configure the vehicle model and options they want and send an e-mail request for a firm price quote. The sales reps price the vehicles using the dealership-pricing grid and telephone the customers. (See grid below)
No additional mark up for Décor package during price quote. Package may be offered for $249.
The pricing grid is updated at least every two weeks and more often if necessary due to market conditions and manufacturer incentives.
Other dealers at AROW V may have quibbled about the size of the mark-ups over invoice, but all of them left the conference convinced of the necessity to provide firm pricing information for their Internet salespeople and customers.
Mike Bowers is managing editor of WD&S Publishing, Metuchen, NJ. WD&S is a provider of information services for the automotive retail industry. Publications include Dealer's Edge, Warranty Dollars & Sense, Auto Retailing on the Web, The Parts Manager and Fixed Coverage. mbowers@dealeronline.com
Pontiac (2001 Model Year)
"Invoice plus"
- Bonneville 2.0%
- (All models)
- Grand Prix 2.0%
- (All models)
- Montana 2.0%
- (All models)
- Sunfire 2.0%
- (All models)
- Grand Am 2.0%
- (All models)
- Firebird 2.0%
- (All models except
- Ram Air Trans AM
- WS6 option code)
- Ram Air T/A 7.5%
- WS6
- Aztek 5.0%
Hyundai (2001 Model Year)
"Invoice plus"
- Accent (L model) +$200
- (All models except L) +$400
- Elantra +$300
- Elantra Hatchback +$500
- Santa Fe MSRP
- Sonata (w/o low APR) +$200
- with low APR special +$700
- Tiburon +$500 (all models)
- XG +$1,000
