I came across a great article on the profitability of price transparency from Jim Radogna of Dealer Compliance Consultants.
In brief, here are “10 Things to Consider Before You Blow Off the Idea of Transparency:
- Increase Lead Conversion – Not being upfront about details used to have its benefits until consumers got all the information we have. If you resist answering customer’s questions, chances are you’ll never hear from them again.
- Increase Closing Ratios – Higher levels of satisfaction with the selling process result in higher closing rates and higher sales.
- Improve Your Reputation – A dealership’s reputation is impossible to maintain when staff members use “old school” practices, especially now that they can tell thousands of possible customers about you online.
- Avoid Legal Problems – State & federal regulators frequently target “non-transparent” dealer practices as unfair and deceptive. Who needs the negative publicity anyway?
- Increase Customer Satisfaction – At the end of the day higher customer satisfaction translates into more repeat and referral business.
- Increase Customer Loyalty – Customers only have loyalty if you earn it from them. Transparent processes help build customer loyalty and retention. You’ll find that customers will be willing to spend more when they feel they’re buying from a business they can trust.
- Your Customers Have Unprecedented Access to Information in Real Time – Customers simply have too many choices and too much access to good information and will quickly discard dealers they feel are hiding something. Holding back information will only make them trust you less.
- Reduce Chargebacks – The percentage of chargebacks and cancellations is directly related to transparency in sales and finance processes.
- You’ll Stand Out From Your Competition – Progressive dealers can easily differentiate themselves by marketing their transparent processes and demonstrating their honesty.
- Transparency is what consumers have been begging for so why not treat them the way they want to be treated? – Here’s a hint: it’s happens to be the right thing to do. In my opinion, subjecting customers to old-school processes doesn’t give them the respect they deserve. Just because you can doesn’t mean you should.
The good news is that transparency can be the pot of gold at the end of the rainbow. A transparent business model can greatly enhance your sales, reputation, customer retention, and bottom line. But first you must find the vision and courage it takes to break down deep-rooted stereotypes and embrace transparency.
I’ve said it before and I’ll say it again: Transparency is not a dirty word but complacency is. Do you have the vision and courage it takes to embrace transparency and go from being good to being great?”
See the whole article here: http://tinyurl.com/cf39wo8