New Autotrader study indicates most auto dealership customers see no difference between lowest price and fair and transparent prices.
Price remains important to car buyers. Jared Rowe readily notes that.
“At some point, price has to factor in,” says the president of Cox Automotive’s Media Division, which includes Autotrader, an online automotive marketplace, and Kelley Blue Book, a vehicle-pricing provider .
But citing results of a new Cox study, Rowe says, “Low price and transparent or fair price are the same in the consumer’s mind.”
That’s significant, he says. “We think this is a big deal. It means it doesn’t have to be about continuing profit margin pressures,” an effect on dealers competing solely on price.
In this case, “fair” pricing means competitive pricing, or being in the game. If an online shopper is doing a lowest-to-highest price check on a vehicle, dealers appearing on the fifth or sixth web page of search results essentially are sidelined.
“If pricing isn’t in a specific range, it isn’t perceived as fair,” Rowe tells WardsAuto.
Transparent pricing means, among other things, what customers see online and elsewhere is what they get at the dealership. Transparency reflects openness and consistency across marketing and sales channels.
The study found that the top three dealer differentiators in terms of importance and desirability are: transparent prices, honesty and transparency of dealer service departments and the competitiveness finance rates dealers offer. The study says 90% of consumers expect those things.
Dealers who openly demonstrate price fairness and transparency build consumer confidence, Rowe says. “It puts more focus on value and less on price negotiations.
“It represents a shift in how retailers approach the sales process.”
It also speeds up deals and fosters long-term dealer-customer relationships.
“Only 20% of consumers absolutely want the lowest price,” he says. “Eighty percent want a fair price. If I’m looking for more buyers, I don’t think I’d focus on that 20%.”
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Author: Digital Dealer
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