How do I price my cars aggressively and overcome the customer’s need to negotiate?

November 25, 2008

Recently, I received this question from a client and provided the following response:


There is no doubt that once you price vehicles in a highly competitive fashion there needs to be a change of culture in the showroom.  Let’s not forget that we have conditioned our sales representatives and managers that it’s necessary to knock a couple grand off the asking price or over allow on the trade just to start the negotiation.  If you lower your price to draw deal seeking customers and don’t change this culture in your showroom, there will definitely be problems.  To this end, I recommend two specific strategies. 


First, recognize that the initial sale of a vehicle’s price value relationship needs to be made to your sales staff.  When they encounter the customer on the lot who’s first question is, “What are you going to knock off,” your sales person needs to have the firm confidence and conviction to look the customer in the eye and say, “I know why you’re here – you’re here because you recognize that this vehicle is one of the best values in the market.”   So how do you get your sales people and managers to believe that your vehicles are priced to sell, not to negotiate?  The answer is that you should use the vAuto tool in your sales meetings to demonstrate how prepared the dealership is to ensure that each and every vehicle is priced as a “great value.”  Your sales people will understand that the vAuto technology is so impressive that they’ll actually leave the meeting room with a bounce of confidence in their step.  This exercise should become a staple in all of your sales meetings. 


Second, using the vAuto showroom tool, show the customer a competitive list of all of the identically equipped competing vehicles and their respective rank (vRank) to demonstrate that your vehicle is among the best values in the market.  Dealerships around the country are reporting that this has proven to be one of the most effective closing tools of any that they’ve ever experienced. Think about the vAuto showroom tool for the deal as what CarFax is for the vehicle.  We even have dealership clients that are posting the showroom tool report on the windows of the vehicles.  It is a convincing third-party validation for the price value of your vehicle.  Using the showroom report with the customer will not only help you close more deals with less negotiation, but will also reinforce the culture of value pricing in the minds of your sales staff.


I’m not saying that using these strategies will change the culture of your showroom overnight, but it will work, and perhaps faster than you think.