Vendor payments per car sold?

[danmichaeli]

As a new vendor with a lot of flexibility, I think it may be interesting to charge my clients for value realized (cars sold) instead of opportunities created (leads generated). I've read a bit about the "bird dog" issue and how some states don't allow for this type of vendor payments to occur but I just wanted to reach out to the community on this one- any thoughts?

 

[JessicaRuth]

Check out this thread and see if it helps. Might need to merge the two.

 

[joe.pistell]

Daniel,

Google ThinkAuto 2011: Avg Auto shopper sees 23 sites prior to purchase (impossible to award one site as responsible for the sale).

Search threads in here for TrueCar and Zagg for more insight.

 

[danmichaeli]

Thanks for the responses! Jessica, that was actually the thread that inspired the question . I thought of posting there but it seemed like it would be a change of subject so decided to start another one..

Joe, since we work right on the dealership site (and for a few other reasons too), we are able to tell with certainty which are "our leads". Granted, the lead may have originally come from somewhere else but since we provide a unique type of interaction with the customer, once the customer goes through our system, dealers don't have a problem (so far) with letting us claim that lead. This is because its very clear that the lead became an appointment through us (and subsequently/hopefully a sale too).

So since it is possible to tell that we are "responsible" for the sale, do you think its possible/desirable to charge this way? We thought it could be an innovative way to price to value because we only want dealers to pay for us if they can tangibly see what we're bringing..

 

[Jeff Kershner]

So since it is possible to tell that we are "responsible" for the sale, do you think its possible/desirable to charge this way? We thought it could be an innovative way to price to value because we only want dealers to pay for us if they can tangibly see what we're bringing..

From the dealers perspective, I love to pay per sale. I have nothing to loose. Only pay if we make a sale.

From most vendors perspective - it's quite stupid. They are not "responsible" for the sale. They have no control over the sale. What they can be responsible for is the opportunity and possible the quality of the opportunity. The staff (sales and management) control the sale.

 

[Jerry Thibeau]

I've read a bit about the "bird dog" issue and how some states don't allow for this type of vendor payments to occur but I just wanted to reach out to the community on this one- any thoughts?

The folks at TrueCar could fill you in.

 

[joe.pistell]

Thanks for the responses! Jessica, that was actually the thread that inspired the question . I thought of posting there but it seemed like it would be a change of subject so decided to start another one..

Joe, since we work right on the dealership site (and for a few other reasons too), we are able to tell with certainty which are "our leads". Granted, the lead may have originally come from somewhere else but since we provide a unique type of interaction with the customer, once the customer goes through our system, dealers don't have a problem (so far) with letting us claim that lead. This is because its very clear that the lead became an appointment through us (and subsequently/hopefully a sale too).

So since it is possible to tell that we are "responsible" for the sale, do you think its possible/desirable to charge this way? We thought it could be an innovative way to price to value because we only want dealers to pay for us if they can tangibly see what we're bringing..

Dan,

Did your product go out in to the street, grab a passer by & drop them in front of a sales rep?
-or-
Is your product dependent on being a cog in the dealers marketing and merchandising wheel?

In other words, does your product stand alone?

 

[joe.pistell]

Dan,

Saw your site. The product is unique, your site doesn't explain the concept well. Can your system generate appointments? Dealers would pay for appts that show.

 

[Todd Caputo]

I looked at your site and I'm not getting it.

 

[yagoparamo]

Dan,

Did your product go out in to the street, grab a passer by & drop them in front of a sales rep?
-or-
Is your product dependent on being a cog in the dealers marketing and merchandising wheel?

In other words, does your product stand alone?

Joe and Jeff right on on all their answers;

I did this with CL for a little while and this is my experience.

It works for some dealers that suck at buying the right inventory (which is the biggest difference maker) or that suck with their sales team, so even thought we would bring the leads they wouldn't sell much from it. Frustration set on my end pretty quick when you realize that they are wasting your work.

Then we have the dealers where we produced maybe just a few leads but they killed it because they were on top of it. We were happy, the dealer wasn't. Right away they said they want to go to a "flat fee" or monthly fee, however you want to call it, and just like any other website.

So we ended tiered of the balancing act of producing/no producing/closing/not closing. I'm what I'm and I must remain an advertiser that brings relevant traffic and leads to my clients, they have to inventory properly and train adequately to sell.

Then reading Joe's last entry it proposes a different scenario where you are not actually bringing the lead to the dealer but helping convert existing customers. In that case I don;t know how the bid dog laws will work since you are a conversion system not enticing the customer to come to do business with the dealer.