BrainTrust Query: Why don't car dealers just give people the price?
This is Auto Show season, so here's how I bought my new car recently.
I decided to buy either a Subaru or a Suzuki, whichever price came in lowest. Using the two manufacturers' websites, I called the closest 19 Suzuki and 30 Subaru dealers (all within an hour of my home) to get their fax numbers. Each dealer received a single-page fax listing the model, color, and three dealer-installed options requesting their best cash price faxed back to me (as in "net price," including freight, fees, prep, plates, etc.). Faxes were sent the morning of January 30th, assuming everyone would be under maximum pressure to achieve their monthly sales goal.
I figured it's easier to spend three hours faxing than 100 hours visiting dealers.
The results?
Of the 49 dealers, 19 responded: 13 Subaru and six Suzuki. Exactly one dealer (Suzuki) faxed a typed business letter listing exactly what I wanted, with the price. Everyone else faxed me invoices with handwritten comments, various handwritten forms, business cards, etc. Numerous dealers called me on the phone and wanted to know when I'd "come in."
Of the six Suzuki faxes:
Four omitted the options. Four omitted the taxes. One fax listed two different prices for the same car on the same page. I asked one salesperson why he didn't include the options prices. First, he said that the options were "parts" and parts were another department. When we discussed this further, he said Suzuki customers usually wanted the cars stripped, so options weren't a consideration.
Of the 13 Subaru faxes:
Eight omitted the options. Like the Suzuki dealerships, all three options are dealer-installed. One Subaru dealer told me, "We don't get involved in that" when I asked about the options. Six omitted the taxes. One fax listed two different models, both incorrect.
The low-price winner? A Subaru dealer who phoned. I asked him to submit a fax, and he did. He omitted the options, but after I mentally added them at the list price, I knew he'd win. When I came in that evening to leave a deposit, the salesman turned out to be a fellow with six weeks on the job.
He had a loose-leaf notebook with third-generation grayed-out copies of the options prices, and those prices were less than the ones on the Subaru site. He didn't know if the prices on the copies included labor. He hadn't seen the brand's web site, so I took him through it, showing him how it automatically priced the options. Since he didn't know what to charge for the options, and he was alone (the boss doesn't work nights and neither do the parts or service departments), we agreed to use the web price and signed a deal.
Discussion Questions: Are most car shoppers today simply bargain hunters looking to come out ahead on negotiations? Or are most satisfied with getting a fair price acknowledging that car dealers and salespeople have a right/need to make money? Would car dealers be better off having faith in the basic decency of consumers or do they need to approach selling as if the shopper is a sort of enemy?
The golden rule of sales: treat each shopper the way they'd like to be treated. Of the 19 dealers, only one gave me the information requested, which was extremely basic: what's the price?
What caused the poor salesmanship? I doubt the cause was a conscious attempt at manipulation, since 19 dealers actually did respond. The other 30 dealers either didn't have the inventory (unlikely) and/or don't want price shoppers. Was it basic contempt for the customer? Sloppiness from poor training? Not having simple "How To Price A Car" software? Overwork from too much customer traffic? Recruiting and screening folks with poor empathy for the customer? Why spend time responding when the response is inappropriate?