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

August 26, 2010

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.