Talking to prospects about SeeDealerCost.com

I’ve been having a lot of conversations with boat builders and dealers about SeeDealerCost.com these past few weeks. One conversation in particular is worth passing on for discussion.

I’ve been having a lot of conversations with boat builders and dealers about SeeDealerCost.com these past few weeks. One conversation in particular is worth passing on for discussion.

A lot of dealers have been talking about what they’ll do if a consumer brings in pricing they’ve obtained from SeeDealerCost.com. For example, Paula Fulton wrote in her latest contribution to the conversation within Boating Industry’s LinkedIn group: “I myself am going to focus our efforts on being up front with the customer about our true costs after invoice and build value in OUR business, not just the brands we carry.”

This is a great strategy, except for one problem. The pricing on SeeDealerCost.com doesn’t take into account boat builder programs. A boat builder I spoke with last week gave this example: let’s say a consumer is comparing three competing boat models. In the case of the first boat, the price on SeeDealerCost.com is accurate. It’s exactly what the dealer pays for the boat. In the case of the second boat, the manufacturer’s program offers the dealer a 4-percent discount. And the boat builder’s program on the third boat offers the dealer 12-percent off.

To the consumer on SeeDealerCost.com, the first boat looks like the best deal. So, he visits the local dealer of that brand first. The dealer has decided, like Paula, to be upfront with the customer and explain what the company needs to make to cover its costs (and hopefully make a healthy profit). In this case, the profit margin might be 18 percent.

The consumer then visits the local dealer of the second boat brand. Because that dealer received 4 percent through its boat builder program, that dealer tells the customer the company needs to make 14 percent.

And when the consumer visits the third dealer, whose boat builder offers a 12-percent program, that dealer tells the consumer the company needs to make 6 percent above the SeeDealerCost.com price.

What can the consumer assume from these conversations? If you put yourself in their shoes, would you trust any of them? Consumers can’t be expected to know how much margin dealers truly need to stay afloat. And if everyone's telling consumers a different story, it’s going to discredit the whole industry. That was the boat builder’s point.

He suggested that dealers avoid trying to explain their cost structure to a customer. Instead, he recommended they take the position that SeeDealerCost.com’s prices are often not an accurate portrayal of what the dealer pays.

Now is your chance to weigh in. Have you had any prospects bring SeeDealerCost.com pricing into your dealership for discussion? Have you and your team talked about how to handle this situation if it comes up? What do you think about this boat builder’s suggestion?

4 comments

  1. No one has showed up at our place armed with this information revelation. Having given the matter some serious thought we've decided not to alter our pricing structure or policies. I agree with the boat manufacturer in this case. I don't see anything productive coming from a conversation educating a buyer about our cost of doing business. They don't know and won't care. By the same token I don’t think it will be easy to discredit the information they think they have. I see that being counterproductive as well.
    When it happens our conversation will focus on all the value our dealership adds the product, the delivery of the boat and all the things we're going to be doing to make their ownership and use of that boat exceptional. In short all the things we offer that simply can not be had any where else. The difference between what they saw on SeeDealerCost and our sale price will be the value we need to sell.
    Will this strategy work on everyone....absolutely not. We're beating it will work on the ones we really want to have a customers though!

  2. Liz, Some good points. As of today we have not had a consumer bring up the site. I agree with the manufactures explanation, the information is flawed and will only become more flawed as manufactures react with new programs to keep there distribution alive. It will end up like the car info, useless information. Your position to not engage the customer on this subject is also extremely valid. What will happen is sales staff spending valuable time trying to justify price to a prospective customer,instead of being a professional sales consultant, helping put a round peg into a round hole. Many consumers walk in thinking they know exactly the model and equipment they should purchase. However after a professional, customer focused consultation many find they completely missed a model much better suited for there needs. Currently this is what separates a dealership that receives a high percentage of referral and repeat business compared to one that sells on price and has costumers that continually defect to other dealerships and other brands. If this site does come up effective sales professionals will explain they will discuss price later after first making certain the customer is purchasing the right boat. Something perfect to say is; THE WRONG BOAT AT THE RIGHT PRICE IS STILL THE WRONG BOAT, lets get back to discovering what the best boat would be to fit your family and then we can make sure you are getting the best price. Dealers that survived the recession should know the margins it takes to survive. They also should know the customer they can never please is the one they sold the boat to at or below cost. At the moment we all need to make sure this distraction does not cause any more frustration for consumers with our industry. As I mentioned in a previous post; lets hope we can all look back at this speed bump five years from now and point at this this event as a tipping point helping to take our industry forward for everyone involved.

  3. After giving this a lot of thought, I believe the outcome of the above scenario will be the consumer going back to the first dealer and demanding a 6% deal. That dealer had the lowest cost to begin with, and we should all be able to operate on the same margin. Then the first dealer will say that he can't do it for that and give a long, boring discourse on "cost isn't really cost". The customer will now believe that one or all the dealers are lying, so in disgust he will go GOLFING, or buy an RV and we all will lose.
    The worst part about this website is that it tells the consumer that boating isn't about lifestyle, or pleasure, or quality product, it leads a customer and a dealer down the road to the only important factor being numbers or cost. If we try to run these business on "deals" we are all finished.
    I agree that the buyer that needs to be close to cost is usually the "problem" customer.
    I think it will take time time for the website to create a following, just to "get the word out" will take a while, then if it doesn't have EVERY boat manufacturer on display it will become suspect, why "favor" only certain boat brands, if the boat the customer wants isn't on, and the informaiton isn't accurate, the consumer will lose faith and the site will lose relevance. So far the only people on the site have been in the boat industry.
    When he does arrive I intend to treat this customer as a serious shopper, another lead, another up, I will do all I can to sell him a boat and to try to take the focus off "the deal" and get it back on the customer (like it should be). If I can make a deal that makes sense I will do it, if I cannot get the customer to a reasonable level then I wont make a deal, just like I have for years before there was a cost based website.

  4. Yes, but what does this mean for the factory-direct boat manufacturer? We have no dealer-related mark-up or transportation costs to send product to them. Is there a point in the evolution of your price-conscious shopper when he/she decides to cut out the middle man altogether and just shop direct instead?

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