Are You Walking the Velocity Walk, or Just Talking the Velocity Talk?

by dpollak on 08/26/2010 · 2 comments

car sticker price 300x203 Are You Walking the Velocity Walk, or Just Talking the Velocity Talk?Here’s a question that I recently received from an intelligent dealer on the journey from traditional to Velocity Management.  I thought that my response would be relevant to the entire Velocity community.

Hi Dale,

Do you have any thoughts about not putting pricing on the cars that are on the lot? I price them obviously on the internet, but with live market pricing doesn’t make sense to sticker them with some inflated price? I know that the Germain Group doesn’t disclose the price. Would be interested in your insight.

 

Thanks for your note.  The real question is whether you’re going to walk the talk or just talk the talk.  Yes, you can certainly get away with pricing the cars on the lot different than the internet and make some grosses that you otherwise might have missed.  I see many dealers using this practice and even some are ones that subscribe to the Velocity principles.  I believe, however that the few additional dollars of gross that you’ll pick up will cost you more in the end.  Allow me to explain.

One of the most essential elements of Velocity success is cost efficient sales operations.  When you try to have your cake and eat it too by having higher prices on the lot than on the internet, you’re sending a signal to your sales people that you’re still pricing the customer rather than the car.  So what’s wrong with that?

The problem with this approach is that your sales people no longer believe in the integrity of your pricing.  In order to have high spirited, high volume and low cost sales, the environment needs to be straight-forward and simple.  When it is, you can more easily hire good hardworking people that come to work every day believing in the employer they represent and products they sell.  The result of this is higher volume and less cost per transaction.  If you don’t appreciate the value of this type of working environment, then you really don’t understand the essence of sales success. 

 In order to achieve sales excellence, the people representing the product have to be passionate advocates of their value proposition. Not to facilitate this type of environment is to sacrifice the long-term success for temporary short-term gains.  For these reasons, I would encourage you to do it right and celebrate it with your staff and customers.

  • http://www.linkedin.com/in/craigbelowski Craig Belowski

    Having the discounted price being offered both on the lot as well as the web will get you some push back from the traditional or “old school” salespeople…….but having the piece of mind, positive reviews and none of the “how come the car I bought last night was less money on the internet when I went home to show someone the pictures?” customer conversations will be well worth it.

    We don’t re-sticker the cars with new prices as we mark them down (not very efficient or eco) we do give salespeople updated price lists and operate from our virtual inventory for the “what’s the best price?” questions with “let’s take a look at our website and see if this vehicle has already been reduced.”

    80-90% of car deals are researched online and yet Dealers still want to hope for the 10-20% of the shoppers that don’t go online to magically appear on their lot………stop waiting and fish where the fish are.

  • http://www.polarchev.com Bill Krouse

    Dale-you are spot on! 18 years ago the leaders at Polar Chevrolet/Mazda here in the Twin cities of Minneapolis and St. Paul decided to lead “an ethical revolution in automotive retailing” by pricing our cars instead of our customers. Our leaders became “passionate advocates” of a value proposition that really was a “mission” that took on greater meaning than just selling new and used cars but in essence became the “fuel” they needed to inspire the front line folks who knew with absolute certainty that their leaders were 100% committed to “walking the talk”. What made this transition to negotiation free selling “stick” was we loaded EVERY manager at the dealership-parts, service, admin., F & I, body shop, new and ussed sales-evweryone-on to the good ship “Integrity” and salied across unchartered waters to the land of “Best price up-front” where there were no games and no gimmicks and where respect was shown for every customer, their time and their money and backed by a “peace of mind money back guarantee” that proved that customer satisfaction was more important to us than their money! We then erected a huge flag pole and raised the “Integrity” flag from the ship and after everyone was unloaded in the new promise land we burned the ship. We are proud that we decided to do it right and we celebrate every day the fact that today the Twin Cities market has the largest % of negotiation-free dealership in the USA.

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