The term transparency replaced the word honesty at some point in the early 2000’s as the buzzword for treating your customers with respect.
Most of us learned pretty quickly that the internet created a need for the old school, good ole boys of the car business, to be honest, or the internet would shut them down.
For some reason, businesses still struggle with transparency, in the auction business, for example, we see auctions still hiding known details on red light sales while companies like CarMax are achieving 100% sell rates at their auctions with simple transparency. We see auctioneers using ghost bidders and shiller’s (fake customers) to drive up performance, while companies like ABS auctions use true silent bidding and honest condition reports and achieve better results for their sellers.
But is it just transparency, that drives buyer and seller behavior? Of course not. But I will say that transparency with predictability will increase customer satisfaction and company profits if applied in a consistent and, you guessed it, “predictable” way.
For example at CarMax auctions, they have a predictable arbitration system, where they make every effort to disclose what’s wrong with the driveline, and if they make a mistake they “have buyers back.” The buyers know that the disclosures are a real attempt to describe the vehicle and as a result, they bid higher and more often.
With Auction Simplified’s bid assurance, not only does the auction/dealer have your back, they will not make bidder take a car that is poorly described. It’s a red light auction with transparency AND predictability. A buyer can easily predict the outcome if they purchase a miss-described car; they won’t have to take it. The auction/dealer will simply rerun the car, correcting the condition report so the next bidder gets what they pay for. What’s interesting is many times the winning bid is similar even after the item is disclosed. That’s predictability at work.
Predictability is one of the most powerful tools to manage your business and home life. When you are reliable; for example always being on time to pick up your kids after practice, they know what is going to happen that one time you’re late. They won’t panic because you are predictable and always show up.
If your customers know in advance that you will honor your printed code of conduct, such as money back guarantees or return policies, every time, in a reliable and predictable way, they will pay more and purchase more often.
Thanks to Chris Voss author of “Never Split the Difference” for the thought starter for this article. I highly recommend his book.
Kevin B. Leigh | Co-Founder | Writer | Serial Growth Hacker. Kevin is a results-driven,a highly effective senior executive with an entrepreneurial background. Over 25 years of experience from start-ups to top 20 dealer groups.
Currently Co-Founder at Auction Simplified, a software and marketing company serving the automotive dealer community mostly in the northeast.