I Walked A Mile in Their Shoes…….

I did it, I actually did it, I leased a new car on-line. Why is this so amazing? Here is a little background on me:

- Age 16, lot attendant (1967 Camaro, private party)

- Age 22, Salesperson (1987 Suburban, private party)

- Age 24 Sales Manager (Demo)

- Age 28 General Manager (Demo)

- Age 30 Chevrolet Dealer (Demo)

- Age 37 Chrysler/Jeep/Dodge dealer (Demo)

- Age 44 Consultant (?)

As I embark on this next chapter of my business career I want to be a part of the most amazing changes in the retail automobile business in the last 30 years, the information revolution. Yes, the internet but so much more; Yelp, Edmunds, Truecar, ZAG, and many more sites are available to consumers who are interested in buying a car. If I was going to help my fellow dealers navigate this information ‘super highway’ by teaching them to ‘think like a consumer who is in the market for a new car’, for the first time in my life I was going to have to be ‘a consumer who is in the market for a new car’.

Vehicle Criteria- Under $30,000, 3 year lease, excellent fuel mileage, reasonable insurance costs, some style, navigation, reasonable interior room, automatic, warranty and maintenance for 3 years (or more), sub 4% money factor, and heated seats. It came down to the Toyota Prius and the Volkswagen TDI Sportwagen.

STEP 1- What to buy

Sites I used- Edmunds comparison tool, Truecar vehicle equipment configurator

Step 2- What to pay

Sites I used- Truecar, Bankrate.com

Step 3- Where to buy

Sites I used- Dealerrater, Truecar, Google (reviews), and Yelp

Time Spent

I spent roughly 4 hours deciding what to buy, what to pay, and who would get the opportunity to earn my business.

Results

Having been a participant in literally thousands and thousands of transactions (but not having bought a car retail from a dealer EVER) I knew, in theory, the best way to go about it was to educate myself, send specific inquiries through the Truecar site and weigh the results.

Here is what I found, ranked from bad, to negligent, to good:
Dealer 1- Very responsive until I asked specific questions about the cap cost of the lease. After 2 days the 'Manager' told me he could not match the cap cost I was calculating due to the fact I was leasing and they would lose a $750 rebate, if I came in ‘this weekend’ he would make me a ‘deal’, I was left to wonder if that tactic still works, needless to say I was very turned off.
Dealer 2- The home of the automated email and the lazy Salesperson; I only received automatic replies with promises to follow up later. Would not quote cap cost.
Dealer 3- I received one automatic email response, nothing more. Would not quote cap cost.
Selling Dealer- OK, now I was onto something. Dealership was very responsive, professional, and I was coupled with an excellent Salesperson. They offered an alternative to me on interior color and equipment in stock, which I took. I calculated what I thought fair price/terms were and asked them to meet it. Their next email met my terms, invited me in for a test-drive, and we set a delivery time. Delivery went smooth, paperwork was perfect, and the car was exactly what was promised.

Did they make any money? I used the Truecar price, purchased lease wear and tear (at a discount) in my contract and within 48 hours had spent $250 in factory accessories.

I wrote reviews on both the dealership and Salesperson in Yelp and Dealerrater, giving them very high marks. As soon as the Manufacturer CSI arrives I will send that in as well.

What did I learn?

We have to respect the customer who has done their homework, they are the buyer. So many buyers (over 90%) conduct some sort of research before EVER contacting a dealership. There was no doubt I was going to buy a car but I was treated by 50% of the dealers I contacted as if I was ‘not a buyer’, 25% played games with me (wasted my time), and 25% treated me as a buyer and delivered the car.

We must think like a customer, see what a customer sees, and give them the information they request. In my case if the dealer did not (give me the information), I simply moved onto someone who did.

Needless to say I am happy with my decision, although not near as luxurious as my last car (LS460), it fits my needs for now and in 3 years who knows, maybe I am a buyer again!

Give me your guess; did I lease the Prius or the Sportwagen?

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Comment by The Cobalt Group on March 11, 2011 at 2:00pm

Valuable reminder, Kip. I think the flip side of this is not just relating to the consumer, but helping the consumer relate to you. In other words, you have to make the consumer see you as a real person and not just an evil car dealer who is out to rip them off. One main way I achieve this is to employ the reporter’s approach of asking open-ended questions. For example, instead of saying “What do you want to spend?” I’ll ask questions like:

What are you driving now? Has it been a good vehicle? What will you want to be different on your next one?
How do you generally use the vehicle? (And asking linking questions that connect the customer’s answers with further conversational questions: “Well, it seems like I’m constantly taking the kids to soccer practice…” LINK – “Oh – how old are your children? Are they in the traveling league? My son did that all through high school!”)
What one or two things are most important to you in a vehicle – safety, comfort, performance, styling – what?
How did you handle the balance on your last vehicle?

By following this practice, you get the person to open up and develop a rapport with the customer that leads to revenue down the road. Gut check: If a sales consultant finds him-or herself showing vehicles minutes after the customer arrives at the dealership, the interaction has quickly become centered on the vehicle and not the customer. If, on the other hand, we first get to know the customer through questions like those listed above, we’ll then be able to be sure to help them into the best vehicle to address their needs.

John Quade, Performance Improvement Consultant for ADP Digital Marketing

Comment by MANNY LUNA on March 2, 2011 at 11:25pm: Did any of the salespeople offer to bring the car to you for a test drive?

Comment by Ken Dugas on March 2, 2011 at 8:38pm: Consumers today are tired of the run around and the tricks...everyone is busy these days and want their issues/questions addressed in a timely manner...That's the bottom line, period (not only in the automotive industry)...

Good Post, Enjoy your new ride and hope you send the 3 dealers a note now that the smoke is cleared and everything is finalized!

I'd say your riding in the VW!

Comment by Alex Schoeneberger on March 2, 2011 at 8:26pm: I moved through six dealers when I bought my last car for various reasons, most of which you outline above. I encountered so many issues with four of them that those four basically weeded themselves out of the running by doing things like insisting I visit the store for a price quote, ignoring my requests for a price quote, or simply not responding at all after the initial e-mail auto-response (all of which, by the way, were 500+ words and way too long... Cut it down to 100!).

I submitted leads on a Saturday and bought on a Monday, so it wasn't like I wasn't a "real" buyer and like you, the dealer I purchased from still made money on me and I was OK with that. I guess there's enough walk-in, don't-shop-around ups out there to stay afloat? I saw many cases where there was a need for either more training or more personnel handling internet leads (or both) and I was very surprised.

Comment by Kip Miles on March 2, 2011 at 8:19pm: Great questions about Truecar (ZAG), they are a very savvy company. Truecar (ZAG) contracts with dealers and allows the dealers to set the price, however it also is allowed to poll the dealers DMS and review the transactions. Then Truecar bills the dealer for the transaction if the consumer purchases from them. They are a part of ZAG ultimately, who is the back-end for AAA, American Express, Overstock, and many other buying services.

As far as ‘what I let them make’ I truly went about it as a consumer, I did not call any of my VW Dealer friends for pricing (invoice), and asked them to honor the Truecar price (it looked to be $500 back of invoice). I shopped on-line as well for the lease wear/tear and the accessories.

Having seen many poor transactions in my life if I paid $250 too much, so be it, I left more value than that having gone through the experience.

One note- once the Salesperson figured out I was a ‘car guy’, he thanked me for being nice to him and not ‘beating him up’. Go figure…..

Oh yea, I love my Sportwagen and can report an honest 43mpg on 1^st road trip and 35mpg all the time (but I do miss my LS460).

Comment by Sue Brief on March 2, 2011 at 7:59pm: First I would likle to say, good for you. I remember my first buying experience post demo. It was a nightmare. I walked away from it totally understanding why consumers dread stepping in to a showroom. I am guessing you ended up with the VW. My reasoning is simple, for some reason VW dealers seem to "get it". Dealers still dont seem to understand the power the Internet plays in their business. We are in the 21st century and still playing the "come in for the deal" game with customers. Until the time comes when all dealers understand that, now, more than ever,the mystery is over. The average consumer, more than likely, has more information on the car pricing than the "power manager" allows the sales person to have ("if they know the invoice, they will give away the gross"..UGH). Does this mean a dealer cant make money? Of course not, it means they need to step up to the plate, earn the profit with their service, professionalism and transparency. But, hey, what do I know, I just left a store where they are still using the 4square and truly do not understand why they are dying

Comment by NANCY SIMMONS on March 2, 2011 at 5:29pm: I am guessing the VW...what do I get if I guessed correctly???? LOL

Comment by Rob Campbell on March 2, 2011 at 12:04pm: This should be eye opening to a lot of dealers but my guess is it won't be. I'm still surprised by the number of dealers who think sitting a guy in front of a computer has "solved" the internet problem. No training, no process, and no follow-up by the dealer will continue to produce the above results. With nearly 90% of all buyers doing some form of research on the internet before they buy, 9 out of 10 customers should be viewed as internet customers. If 75% of leads are truly being handled like you were, and I think they are, it spells trouble for many dealers across the country. Most dealers, GM's, and sales managers have no idea its happening at their store, on their watch.

Comment by NANCY SIMMONS on March 2, 2011 at 10:18am: Great post!!! It's incredible how many things dealers do wrong and think it still works! I think you were fortunate to only pass through 3 dealers before landing dealer 4, who was knowledgable, informative and gave you the information you asked for...period! Imagine the advertising dollars, internet lead dollars, web site dollars spent by Dealers 1-3, to in turn lose a customer due to lack of proper training! This story is a great example of that...I hope more dealers, GM's and GSM's read this story and take a step back and ponder how they would have treated your internet inquiry!