USING TRANSPARENCY AS A COMPETITIVE ADVANTAGEWinning Strategies
for Todays Consumer-Driven EconomyPresented 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 toCustomers, Ron Henson from
DrivingSales notes:The work I do with dealers affords me the
opportunity to reviewmany Internet mystery shops of dealerships all
over NorthAmerica. It blows me away how many times we ask for a
price andget an answer like: Well make you a great deal. When can
you come in? Weve 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 theyll 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 ProblemsState & 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) MailersUnfair 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 oclock news?
REASON #9 Increase Lead ConversionThe ultimate goal is still to
get em in and close the deal,but for an increasing number of
shoppers, transparency isthe only thing that will get them in. Not
being upfrontabout details used to have its benefits. Up until
recently,the salesperson could control the selling process
becausehe or she controlled the information. Today, its just
theopposite - consumers have all the information they needat their
fingertips. If you resist answering customersquestions, chances are
youll 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 ReputationWhat Is Your Reputation
Worth? A dealerships 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 theyre telling somebody about the transaction. Or
perhaps theyre telling thousands of people online?
REASON #6 Increase Customer SatisfactionLack of transparency
and old school tactics diminishthe customer experience. Nobody
likes surprises.Sure, you made the deal but are your customerstruly
satisfied with your processes or do you justwear them down? Higher
Customer Satisfaction = More Repeat and Referral Business
REASON #5 Increase Customer LoyaltyCustomers only have loyalty
if you earn it from them.Transparent processes help build customer
loyalty and retention.
REASON #4 - Your Customers Have UnprecedentedAccess to
Information in Real Time 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.
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 localarea. The increase in the amount of
information available toconsumers has brought consumers a quick and
easy way toanalyze not only different prices via internet quotes
but alsoto identify who they want to do business with.
Customerssimply have too many choices and will quickly
discarddealers they feel are hiding something. Hiding (or
reducing)the amount of information available to consumers will
onlymake 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
carbuying and its likely that dealerships will continueto be the
primary way that customers will purchasevehicles. But remember
this; while customers mayalways choose to do business with
dealerships, theydont have to choose to do business with
yourdealership. Just because customers shop yourcompetitors with a
perceived better deal, it doesntmean theyll buy there.
REASON #3 Reduce Chargebacks Once the ether wears off and the
customer goeshome and reads the contract how much do you get to
keep?
REASON #2 Youll Stand Out From Your CompetitionWhat percentage
of dealers are transparent today?Theres an opportunity to not only
be transparent, but totrumpet the dealerships transparency. The
"friendly,courteous dealer" claim doesnt resonate with verymany
consumers anymore. However, using transparentprocesses to clearly
demonstrate the honesty of the storecan and does resonate.
Progressive Dealers Are Marketing Their Transparent Processes
and Customers Are Responding
REASON #1 Transparency Is What YourCustomers 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