“Man alive, I just can’t wait to get in front of that salesperson and argue, bicker, balk, banter, and haggle over the price of a vehicle for the next 2 hours.” ~ said no customer ever.
And yet, during the DrivingSales President’s Club in NYC last week, a study they released stated the opposite.
Apparently, 17% of the people surveyed chose the statement: “I like to negotiate and will grind hard until I am confident I’m getting the lowest price possible.”
Let’s talk semantics. I’m not one to pit words against numbers, but I don’t think “negotiate” was the right word to use. I don’t believe the majority of customers fully understand what negotiating is, or what they are negotiating for. Negotiating is often not necessary in today’s automotive market. Negotiating is over.
A study from Sageworks reported that dealers made an average of $0.03/$1.00 profit on vehicles in 2013, and I doubt that number has gone up since. Negotiating price on a new car is literally arguing over pennies. I know I, for one, don’t have time to spend hours arguing over who deserves .35 cents more.
At DealerKnows, I mystery shop HUNDREDS of dealers every year, and with our lead/ISM/BDC monitoring and grading technology, I’m able to see the dialogue between dealer and prospects more than most. This gives me insight as to what consumers are discussing with the dealership long before the purchase. The “negotiating” or “hard grinding” of today isn’t the need to bicker over dollars and cents. Instead, it is a consumer’s demand for transparency and open, responsive communications before the consumer agrees to a deal.
We’ve all seen the data that 40% of consumers contact the dealership before arriving. They are trying to determine if the dealer is trustworthy. Customers don’t NEED to know what their monthly payment will be before they visit the dealership, but they call/email and “grind” simply to see if the dealer is willing to answer the question. If not, the dealer is ruled out. The “negotiating” people (in the study) say they want to engage in takes place in a different area today than it did ten years ago. It takes place online or on the phone, and not in person. Hence, why “negotiating” as a term is not the correct vocabulary.
[blockquote name=”Melissa Roberts” organization=”@melissarobert55″]Yesterday’s “negotiating” is today’s demand for transparency. They seek information over dollars and cents.[/blockquote]
Dealers need to allure more than evade in their customer communications. Pricing isn’t a secret any longer. Consumers don’t need the dealer or their website to find out what an average price should be on a new or used vehicle. If the dealer is going to play pretend, and act like price is a secret, withholding information from their potential customers, to the bottom of the list they go.
And this has been a “word ball” from Melissa Roberts of DealerKnows.