CARY, N.C. -

The four Overby siblings have math stars as bookends: My older sister, the former high school mathematics teacher; my younger brother, the civil engineer.

Ten years of age separate those two, but part of what unites them is their sharp talents when it comes to numbers.

That and math jokes.

But the power of computing numbers goes beyond bonding two siblings who are very good at it.

Apparently, it’s pretty handy in the car business for fostering relationships online between shoppers and dealers.

More specifically, the math of the monthly payment.

Mike Burgiss, the vice president of digital retailing at Cox Automotive, says the biggest opportunity for dealers in online retailing is to create trust and establish a relationship with the consumer online.

The best way to build that relationship? The monthly payment, Burgiss says.

“Using payments to create relationships with consumers. It’s a very weird thing to think that math is going to create a relationship, right?” he said.

“It just doesn’t go together, but the reason it works is because consumers want to know their payment. That’s how they buy, that’s how they emotionally rationalize that they’re going to afford the new BMW that they want.”

It’s all about fulfilling the shopper’s need. And in today’s market, the consumer’s need is to know what the monthly payment will actually be.

“The monthly payment is the gateway, the on-ramp, the starting line of the shift to the digital retailing experience, the digital retailing evolution,” Burgiss said.

Think of all the vehicle detail page views that happen in automotive, he said.

Most just have a price, not a monthly payment, Burgiss said. And for that matter, just getting price listed on every car online has taken years.

“Well, now consumers’ expectations have flown past wanting to just know the price. They want to buy online, well, we’ve got to show them a payment. Because 90 percent of buyers are payment buyers,” Burgiss said. “We have to put payments on VDPs. And I’m not talking about a payment calculator.

“A payment calculator is wrong. It’s by definition wrong because the consumer’s typing in their own APR, which is wrong,” he said. “They’re typing in their own term, which is wrong; it’s not something they can actually qualify for because they don’t know.”

Burgiss said what he means by payment is this: one that is realistic and based on finance terms from the dealer and a valuation of the trade.

He suggests using “self-penciling tool” where consumers can create their proposed monthly terms to generate a realistic payment.

“What that does from a relationship perspective is it puts the consumer in control. If you can sit a consumer down at a VDP and give them a monthly payment — a realistic monthly payment, including taxes and fees — and let the consumer manipulate that, then they’re in control of their own buying process,” he said.

For dealers, that creates a customer who is happy to have the convenience of online and the control of being able to configure a monthly payment.

“And many great dealers know that if you can get the consumer making their own decision, they are much happier and they’ll buy faster and they’ll buy more profitably for the dealer,” Burgiss said.

But here’s the kicker about putting a monthly payment and a self-penciling tool on a VDP: The dealer must maintain control of the deal structure — i.e. determining the financing terms, the valuation book to be used, minimum down payment, taxes, fees and so forth.

Otherwise, Burgiss said, dealers risk losing control of the deal and profitability.

“The biggest opportunity of all,” Burgiss says, “is to put those things together. Create a relationship through using payment. And a realistic payment through a self-penciling tool. Put the consumer in control of the buying experience and the buying process. And have the dealer stay in control of the deal structure.”

When a consumer has agreed upon a payment online before coming into the store, it can eliminate the haggling and back-and-forth, he said.

“And the customer experience is not a negotiation, it’s a confirmation. Meaning, I don’t come into the store to negotiate, haggle or go back-and-forth. I come into the store as a consumer to confirm what we talked about online. Now the customer experience is fantastic in the store, because we go to the test drive and we have an assumptive close into finance.”

 In keeping with our theme, might as well close this column with some math about, well, closing.

After all, Burgiss said one of the big benefits to establishing a relationship with the customer online through payment can be a stronger sales closing ratio.

Typically, he said, leads that a dealer gets from his or her website have a closing ratio that ranges from 4 percent to 8 percent.

If you reach 12 percent, that is considered “great,” he said.

When someone walks into the dealership, a realistic closing rate is about 18 percent, he said.

However, Burgiss suggested that starting deals online instead of the store can lead to much higher sales closing ratios.  Granted, not all buyers are deciding to go the online deal-building route or even know it’s available.

“But for the buyers who choose the online path, the sales closing ratios can be 15 to 50 percent, depending on how you work as a dealership and how you operate your business,” Burgiss said.

“And what comes with that is higher profitability.”

Plus, he said, you have happier customers and maintain control of the deal structure.