TL;DR Product and price visibility on the company websites means customers are better informed when they walk in to make a major purchase. The transparent mismatch between the online price and final purchase price exposes sales tactics, kills trust and the deal.
Digital transformation changes the buying dynamic
We have decided to convert a 4×4 cargo van into an RV. Others have had the same idea so the demand for used vans means they are virtually the same cost as buying new. There are 2 competing options. Mercedes Sprinter (the luxury, premier brand so less depreciation) and Ford Transit (more reliable and lower operating costs). The buying experience was very different and shows how digital transformation has dramatically changed the buying experience and the importance of sales and CPQ execution.
Both companies have websites with elegant online configurators (CPQ). We walked into both dealerships having decided on options and an expectation of final price. We were ready to buy. The small price difference between Mercedes and Ford made it an easy choice – Mercedes.
Mercedes Benz San Francisco (zero, not hero)
We went into Mercedes Benz San Francisco and sat with the sales rep to place the order. The Mercedes Benz CPQ order system was connected to their build system so we had to reenter the config I had created on the website. However, it was very different from the website configurator. There were far more options and similar options had different names. Many options had confusing, dependent options. And the hundreds of options were not in alphabetical order. The sales rep was lost and we needed help from her manager. This took forever.
Website price: $55,052 Final price $70,221. A 27% increase. WTF!!
What was the difference? 3 things.
- Website configurator is 2020 prices and options, but MB CPQ is 2021 prices
- Added delivery charge to get the van from factory to their showroom
- A “market adjustment” of an additional $10,000 due to demand for 4x4s.
We walked out disappointed and angry as it felt like the Mercedes Benz website was a “bait and switch”. They chased after us offering a small discount on the “market adjustment”.
BTW After we left we called a Mercedes Benz dealer in another city who said they did not add “market adjustment” as they felt it was unethical.
Result: No sale and brand trust destroyed – forever.
Hilltop Ford (hero)
The Ford website configurator experience was identical to Mercede Benz but with the added option to get an internet price. This sent our configuration to the local dealer, Hilltop Ford, who called back. They could see the config and they confirmed the price was correct. We went into the dealership the next day.
They also had a separate CPQ tied to their build system, but it mirrored the website. So there was still the double entry, but far faster. The sales rep guided us expertly through the options. And importantly the price came as expected. What was unexpected is that any applicable discounts / offers available when van is delivered will be automatically applied.
Website price: $49,030 Final price $49,030.
We placed the order. We walked out excited.
Mercedes Benz (unhappy ending)
We called the salesperson at Mercedes Benz San Francisco to ask if she wanted feedback for the reason she and her manager had lost the sale. She said yes, but then proceeded to defend their CPQ price mismatch and price-gouging policies. #facepalm #arrogance