The Kansas City dealer group is hoping the digital steps it’s taken through the years will sustain demand through the COVID-19 pandemic.
By Gregory Arroyo
Pictured is the showroom of Soave Automotive Group’s Mercedes-Benz of Kansas City, Mo.
Soave Automotive Group, a multi-rooftop operation serving the greater Kansas City area, was off to a solid year, with sales and service profitability outpacing 2019 through February and no sign of that momentum wavering. That was before local health officials delivered two COVID-19-related orders within a period of six days.
The first, which ordered the closure of all social venues like bars and restaurants on March 17, left Kristopher Nielsen unfazed. As Soave’s eCommerce and customer experience manager, he was on the line that day with DealerFire’s design team to get the group’s response to the Coronavirus pandemic online and out to its markets.
“We have no plans to scale back our ad budget,” Nielsen said. “We’re not going to have a knee-jerk reaction. I think there are real opportunities to gain market share in this difficult situation.”
Ready for Anything
The forward-thinking steps the group has taken over the years to button up its operations and virtual presence was the reason for Nielsen’s optimism. He felt especially positive about the integration between the group’s DealerFire websites and DealerSocket’s CRM.
The connection allows him to see how many website visitors a campaign generates, which vehicles they look at, time on site, and then alerts his teams when those customers return — critical capabilities in the weeks ahead.
Nielsen also feels good about the group’s online service scheduling and fully online purchase process, which had generated robust engagement in the 90 days prior to his call with DealerFire. The newest addition to Soave’s websites is DealerFire’s test-drive delivery scheduler, which Nielsen added as part of the provider’s 100-day free use offer.
All three shopper experiences would get calls to action on the landing pages he wanted DealerFire to build to house the group’s COVID-19 response. The main message was that Soave Automotive’s dealerships were open and ready to help.
Promoting those landing pages would be an email campaign, press release, announcement bars on the group’s homepages, and the same SEO content strategy Soave had perfected since partnering with DealerFire in 2010. “The biggest thing for us is checking in on customers and orders coming in,” Nielsen said. “We’re contacting customers reaching the end of their leases. They’re going to need a car regardless of what’s going on in the world.”
Stay the Course
Soave was closing out a lighter than usual but still productive weekend when the second health order was issued. This time, all non-essential businesses were ordered to close on March 24 to stem the spread of the virus, which has infected more than 700 people in the Kansas City area. Dealership service departments could remain open, but sales were limited to appointment-only.
Nielsen said the shoppers who visited his group’s showroom that weekend were especially motivated to buy. Online traffic remained relatively stable, but lead and contact volume declined. Service capacity also declined, as customers opted against non-critical repairs.
Pictured is one of the COVID-19 landing pages DealerFire created for Soave Automotive.
“We’re actually still on track with last year, but January and February were very strong,” Nielsen said. “We’re now going to give back some of those gains.”
As for inventory, Nielsen said the group is keeping in touch with manufacturers as production shuts down. The group wasn’t concerned about being oversupplied, Nielsen noting that Soave has enough vehicles on the ground to get through April.
“A rising tide lifts all boats. Only when the tide goes out do you discover who’s been swimming naked,” Nielsen said. “We recognize that all we can control is how we react. So we’re trying to stay positive and plan as best as we can for where things may go.”
The business has navigated unprecedented hardships before, and DealerSocket’s First Pencil blog believes there’s no reason it won’t do it again.
By Gregory Arroyo
Remember the period between late 2007 and 2009, when the housing crash that caused the credit crisis led to the Great Recession? The market was tough to read, and the used-car guides were all over the map.
Dealers that bulked up on big trucks and SUVs were stuck with a lot full of them, as gas prices reached $4 a gallon and finance sources tightened up. Any car buyer with below-prime credit couldn’t get approved, as banks weren’t sure where car buyers — particularly those with investment properties — would land and finance companies were dead in the water.
The good news right now is we’re not experiencing any of those market dynamics. But news surrounding COVID-19 (a.k.a. the Coronavirus) has certainly heated up in recent days.
Hearing about Tom Hanks was disconcerting. So was hearing about the National Basketball Association’s decision to suspend the season, after Utah Jazz center Rudy Gobert became the first major professional athlete to test positive for the virus. Now his teammate, star Donovan Mitchell, has tested positive.
As of March 10, there have been at least 116,000 coronavirus cases worldwide. About 64,000 people have recovered, and 4,000 have died. Here in the United States, multiple states are under a state of emergency.
With all that said, the one thing I love about this business is how opposed it is to doom-and-gloom talk. In fact, just yesterday, the founder of a car dealer Facebook group I belong to urged all admins not to allow panic to take over the group.
“I don’t want negative talk about this affecting us,” he wrote.
It made me think of this great line from the first Avengers movie: “Until such time as the world ends, we will act as though it intends to spin on.”
Hey, consumers who need a new car (or used) today will still need it tomorrow. Still, it’s not business as usual, so preparation is vital.
So, if you’ve loaded up with inventory the past couple of months to take advantage of tax season, monitoring aging will be key. And if you’re part of a group that engages in group trading, it’s time to dig into your inventory management systems to ensure vehicles are on the right lots. It’s not time to panic, but you should have exit plans in place.
I recall a story told to me back in 2009. A dealer in the Northeast took on a bulk of pickups in trades just before things got bad. Having dumped $5,000 to $7,000 into the vehicles, he refused to take a loss at auction when things did — even though he was losing money each day those vehicles sat on his lot. His patience was rewarded, however, as he ended up grossing $2,000 to $5,000 by waiting out the storm for a couple of months. Americans do love their trucks and SUVs.
You also need to fire up that CRM. Hey, you know you have customers reaching the end of their finance, lease, or warranty term. Vehicles also need to be serviced. Maybe it’s an excellent time to offer free service pickup and return.
And if you’re a dealer that dipped your toe in the digital retail waters — or maybe offer test-drive deliveries — today’s uncertainty represents an opportunity to really test those strategies.
So, start promoting those customer conveniences, and make sure your digital retail button stands out. In other words, remove any conflicting calls to action on your vehicle details and dedicated landing pages. Banner promotions on your search results pages and VDPs are a must.
Now, when it comes to your employees, I suggest not sticking your head in the sand. Management teams need to get educated on this virus, and communication will be critical. Care also needs to be taken when it comes to the cleanliness of your showroom, employee offices, and common areas.
With all that said, here’s what I do know in all this uncertainty: Every time this business faces a severe hardship, it always seems to come out the other side a better industry. I’m sure that will be the case once again.
Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at email@example.com.
Two industry veterans share their five-point plan for pricing pre-owned inventory to attract more eyeballs and achieve your sales and profit goals.
It takes skill, technology, and a keen eye focused on sales and prices at your dealership and in your market to yield desired profit margins when pricing pre-owned inventory, say Winston Harrell and Nick Oakley.
As two dealership veterans who now serve as strategic-growth managers for inventory at DealerSocket, they combine their expertise to present strategies, practices, and tips to help calculate prices for your online inventory that will attract eyeballs and foot traffic to meet your dealership’s sales and profit goals.
Tip No. 1: Price at the Point of Acquisition
Have a pricing strategy at the point of acquisition; in other words, know how a vehicle fits into your dealership’s marketing plan and your market, and know the vehicle’s best price, Harrell says.
Post the vehicle for sale online four or five days after it is acquired as a trade-in but before its reconditioned. An inventory management tool, such as DealerSocket’s Inventory+ mobile app, puts the power to do just that in the hands of appraisers.
Using the tool, you can scan a vehicle identification number to verify a vehicle’s equipment, obtains its invoice price, and ensures it is properly stocked. Inventory+’s mobile app can also be used to take preliminary photos.
Certification — which calls for reconditioning, a warranty, and a retail price premium when comparing noncertified vehicles of similar make, model, and mileage — matters. “If I don’t have the margin for it, I may not certify that vehicle,” Oakley says. “I wouldn’t price a non-CPO vehicle against a CPO vehicle. Those are the things we look at when pricing vehicles.”
Tip No. 2: Price Similar Vehicles in “Brackets”
That means vehicles of a similar make and model should be further categorized and priced to compete based on attributes such as trim level, optional equipment, or whether it’s certified, Oakley says.
Take a late-model midsize sedan of a specific brand. Many of those vehicles in the market are mid- or upper-midtrim-level vehicles missing certain optional equipment, such as sunroofs and navigation systems.
“I’ll know those vehicles typically come from a rental company,” Oakley says, “and the market is flooded with them, which typically drives the price down. “When looking at those cars that have specific features that rental-car companies usually don’t buy — navigation, sunroofs — I bracket that as nonrental. I know that vehicle is more valuable, so I will price it differently.”
A vehicle priced lower than other vehicles of like make, model, and mileage doesn’t necessarily sell faster or better than its peers. Neither does one that is priced significantly higher, Harrell and Oakley note. “Vehicles need to be priced accurately, so a customer doesn’t think there’s something wrong with it,” Oakley says.
Still, shoppers are going to look for price first, Harrell adds. So having some attention-grabbing product with less content and a lower price that also fits the dealership’s business model “is always a very good strategy to have,” he says.
Tip No. 3: Know Thy Market, its Radius, and What Affects It
Know your dealership’s marketing radius and your nearest competitors. For example, dealerships in rural areas might have customers who are willing to drive three hours to buy a car, but consumers in major metropolitan areas won’t travel more than 30 minutes to a dealership.
Inventory+ by DealerSocket can set a market radius unique to each vehicle. A Ford dealer located in a metropolitan area that sets a market radius for a mainstream F-150 XLT for, say, 25 miles could set the radius for a high-performance, low-availability F-150 Raptor at, say, 100 miles, because “people are willing to travel that distance for that vehicle,” Harrell says.
“Seasonal” vehicles should be priced to sell at certain times. For example, in the northwestern part of the country, convertibles don’t sell well in winter versus summer, when drivers want to drop the top. Therefore, I wouldn’t keep as many convertibles in stock from October to April as they are unlikely to sell. It would be ideal to price this vehicle to sell as fast as possible if October is approaching, Oakley says.
Price your vehicles to appear on the first page of a search engine. “I don’t need to be No. 1 in those engines because 90% of the time, customers don’t just look at a top car,” Oakley says. “They’ll look at the first page or page and a half before they move on.”
Tip No. 4: Employ an Inventory Management Tool that Provides Historical Transactional Data
Know what you can sell and when you can sell it for the most profit. If you lack historical pricing and sales information in your inventory tool, you’d have to do it yourself by extracting data from your dealership management system, “and it’s not really set up for that,” Harrell says.
Inventory+ offers a pricing report that can help, filtering sales by make, model, age, and more. It also serves up historical data such as:
The number of vehicles of a particular make and model in a market;
The prices of those vehicles;
A dealership’s sales and price performance with specific vehicles and the vehicles’ market values at the times they were sold;
The vehicles’ book values; and
The number of those vehicles the dealership wholesaled, the wholesale prices and whether a loss was incurred on those units.
“So I have those factors I need to make an intelligent decision,” Harrell says.
Tip No. 5: Have a Pricing Strategy for Aging Inventory
Some dealerships engage in aged pricing — also known as turn pricing — meaning that an unsold vehicle’s price is reduced at set intervals as it ages.
Set standards for how long you will keep a vehicle before reducing its price, Oakley says. “I price a newly acquired vehicle a little higher than I normally would to maximize my profitability on that unit,” he explains. “But after 60 days or 45 days, I’ve held onto that vehicle for a really long time, and maybe I want to get rid of it by day 90. Then I need to start lowering its price, so when people search online and see it, they say, ‘Hey, this is a great deal.’ ”
Pay attention to book values when reducing the price of aged inventory. “If I’m not taking into consideration what the market is doing and changes in book value, I may reduce the price by, say, 2%, but that book value may have changed by 3%,” Harrell says. “Now, I’m in the position of, yes, somebody wants to buy the car, but I can’t get it financed at that amount.”
Nine times out of 10, a core vehicle will sell for a higher price than its going market price. Two industry veterans provide a three-step process for stocking your lot with core inventory.
By Robert Cowan and Sandy Davis
We know that turning and burning through inventory won’t get you to your profit goals, because successfully managing inventory requires a delicate balance between cost of goods, profitability, and, yes, how quickly you can sell it. We call it the Ideal Inventory Model™, an approach designed to help you stock core inventory — or vehicles that deliver above-average grosses in below-average turn times.
There are many ways to determine your dealership’s inventory, and there are plenty of software tools that can help. In this article, we’ll walk through a proven process for stocking core vehicles.
Step 1: Determine Your Core
The reason you need to identify your dealership’s core inventory is, nine times out of 10, a core vehicle will sell for a higher price than what it’s going for in the market. Nonluxury dealerships, both import and domestic, generally operate best when core vehicles account for 45% to 55% of their preowned inventory.
The Ideal Inventory Model (IIM) is the backbone of Inventory+ and how we determine core at DealerSocket. It looks at your sales history to determine if a vehicle would be a profit driver at your unique dealership, and not just a market performer. Each vehicle will receive a score, or TrueScore, on how it performs at your dealership or in your market. If you’ve never sold a car similar to that, predictive algorithms will pull similar vehicle transactions to help you make a data-driven decision.
It’s important to not rely solely on live market data because other dealers in the same region are getting the same recommendations, which increases wholesale costs for the same vehicle. That often leads to those profit-squeezing, race-to-the-bottom pricing wars. The advantage to using Inventory+ is its algorithms are constantly updating as transaction data flows in daily. That allows the tool to look for areas of improvement when developing your store’s customizable buy/sell list, which the system links to matching available vehicles (such as missed appraisals, in group trades, or auctions).
To determine your core, we focus on profit per day – or vehicles that drive you profit while turning within your desired time frame. It’s important to be able to identify if a vehicle is core or not to your dealership at all stages within a vehicle lifecycle: acquisition to disposition.
Step 2: Acquire Profit Drivers
When acquiring a car, Inventory+ will let you know right away if it’s a profit driver for your lot with TrueScore. Each car on your lot has two TrueScore metrics: one for how the vehicle will perform at your dealership, and one for how that vehicle performs in the market. Both scores are measured on a five-point scale.
Your dealership score is based on your store’s transactional history, while your market score indicates how well the vehicle performs in your local market. The reason why that’s important is some vehicles may perform differently at your store than in your local market, while others might not be profit drivers at your dealership but are high market performers. Your market score is also important when you have no transactional history on a particular unit.
Now, an average car will have a score of about 2.5, while a high-performer will have a score of three or higher. TrueScore also provides the vehicle’s profit per day, average turn time, how it ranks against similar vehicles your dealership sold in the last 30 days, average sales price compared to the market, and much more.
We recommend sourcing vehicles from trade ins, missed appraisals that slipped through the cracks, in group trades, or auctions. While acquiring cars from these sources, you’ll want to make sure your dealership’s TrueScore is at least a 2.5.
When working an appraisal, simply plug in the vehicle identification number into Inventory+’s Single Page Appraisal. The system will immediately extract transaction data from the DMS to provide stocking and pricing recommendations, or the vehicle’s TrueScore. Based on this score, you’ll immediately know if the car will be a profit driver, or loss to your dealership.
As you look to buy cars, refer to your buy/sell list. The stocking recommendations are the result of our Ideal Inventory Model, so you’ll see exactly which cars you need to stock to drive profit per day. You can filter by how many vehicles you already have in stock, filter by your dealership score, market score, cost, profit opportunity, and more. Once you know which cars to purchase, you can source those vehicles directly through Inventory+.
Step 3: Know Your Exit Strategy
You should determine your exit strategy in two places: as soon as a car is in the appraisal process and during reviews of existing inventory (every 10 or so days) to determine any vehicles that have yet to turn.
Remember, as you’re appraising a car, if it’s TrueScore is under 2.5, it’s probably best to get rid of that car before trying your hand at selling it. If a trade in will not be profitable at your dealership, make sure to be transparent and manage a customers expectations. On an ongoing basis, you should use your inventory manager tool to review how your existing inventory is performing. It’s a good idea to pull up the vehicle’s market data every 10 days after it has been traded to see how it differs from the data used at the time of the appraisal. This step will tell you if you need to adjust your pricing up or down.
Your buy/sell will also recommend vehicles to sell, based on unique dealerships performance. If you determine a vehicle needs to be disposed, you can easily trade within your group or launch it to auction from Inventory+.
Finding inventory core to your unique dealership is important. It will allow you to sell vehicles profitably, while maintaining turn. We recommend finding a solution that helps you aggregate your dealerships performance so you’re not relying solely on instinct or market performers to stock your lot.
Robert Cowan serves as a Senior Customer Success Manager for DealerSocket and has been in the automotive industry for 42 years and consulting with Inventory+ for 14 years. Sandy Davis has been in the automotive industry for 22 years and serves as one of the company’s Strategic Growth Managers.
As the competition goes from trading stocks to precious metals to undo the race to the bottom it created, Inventory+ reminds all that it has always been about profit time.
By Gregory Arroyo
I was fooled, at least during my days covering the F&I trade for an industry publication. And I was reminded of that on Jan. 27. That’s when Automotive News published an article on Dale Pollak’s “new truth of used-car profitability.”
My excuse is I covered F&I, which meant I was limited to “drive-by” reporting when it came to the inventory-management space. What I needed was a connection, and, well, the credit crisis that preceded the Great Recession of 2009 and its impact on inventory-management strategies provided just that. That led to this December 2009 article: Stock Up/Stock Down.
The piece quotes the two leading voices in the inventory space at the time: Pollak and the team at Inventory+. Both were leading the charge in turning inventory-management solutions into pricing tools. Inventory+, according to my sources, was the choice of many of the industry’s big dealer groups, while Pollak was the newcomer. And, yes, he was making a lot of noise at the time.
I remember the blog he wrote in May 2008 (The Core is Rotten), where he bashed Inventory+ and the Ideal Inventory Model that serves as its foundation. So you can imagine my reaction when I saw the video Dale posted in late 2018, the one in which he semi-admits that maybe he was wrong. And you can imagine my reaction when he doubled-downed in that recent Automotive News article, blaming dealers for not paying to get his fix for a problem his software created.
What troubles me is my brethren on the media side have decided to let Mr. Pollak off the hook, allowing him to pin margin compression on some “dramatic turn” in the spring of 2016.
Interestingly, Dale rolled out Stockwave in March 2016, but, as you guessed it, his press release and Automotive News failed to mention that. Instead, Dale uses both platforms to tell dealers to adopt his new software “if they want to be profitable.”
Well, Dale, I’m not sure your customers ever fully embraced your now-debunked theory. “I’d never use [vAuto] the way Dale Pollak … recommends you use it,” wrote Jim Ziegler in a July 2015 column in F&I and Showroom magazine. “I suggest using it as a buying and selling guide, but not a pricing guide. I just believe every used car should have a chance to make a decent profit.”
Now, Pollak has gone from managing inventory like trading stocks to managing it like trading precious metals. And according to his team’s analysis, dealers wrongly managed their best investments, their platinum cars, like their worst investments, and vice-versa. So, the trick is to hold onto those profit drivers and rid your lots of those bronze cars.
In other words, find your core inventory.
So, how will you determine your bronze and platinum vehicles? Well, Dale and his team have gone and developed a new secret algorithm that weighs three main factors — cost of goods being one of them. I singled out that factor because Dale never mentioned cost of goods before, but the Inventory+ rep I spoke to for my 2009 article did: “Simply turning vehicles and selling them quickly is not the answer, because it’s a balance between cost of goods, profitability, and how quickly you can sell it.”
He then added this: “The internet is an incredibly powerful and wonderful thing, but it can also be a wasteland of information.”
See, like Pollak’s software, Inventory+ does show users how competitively priced the market is on a specific vehicle based on how other dealers are advertising that vehicle or a similar vehicle online. But we take it a step further by displaying a market’s actual transactional data. That means the dealer doesn’t have to wonder if the price advertised online is outdated because the vehicle was sent to auction.
What really separates Inventory+ is our algorithm (yes, we have one, too) analyzes a dealer’s transactional history — about 90 days’ worth — to determine the dealership’s core inventory, or vehicles that deliver above-average grosses in below-average turn times.
So, we base our recommendations on your dealership’s unique DNA. The reason that’s important is relying on market data alone — like Pollak’s solution does — means other dealers in the same region are getting the same recommendations, which increases wholesale costs for the same vehicle (I’m sure Cox loves that). That leads to those profit-squeezing, race-to-the-bottom pricing wars. Sound familiar?
And by analyzing your historical transactional data, Inventory+ tells you what your customers are buying — not what your competitors’ customers are buying 25 miles down the road. And if you do well on a particular vehicle, there’s no reason to get down in the gutter with every other dealership engaged in a pricing war. You simply need to differentiate your profit driver with the photos you take and the description you write.
See, Dale, it’s always been “profit time” at DealerSocket.
Thirty is the new 60 when it comes to a profitable turn of your inventory. The following best practices are designed to get your inventory merchandised faster and more efficiently.
By Judy Greeby
Merchandising is about getting as many eyeballs as possible on your inventory as quickly and for as long as possible. Smart digital tactics — such as great photos, robust descriptions, and rave customer reviews that help drive showroom traffic — are imperative. So is getting vehicles frontline ready as quickly and as efficiently as possible. These seven merchandising best practices can help:
1. Fast and Efficient Reconditioning
Unless a vehicle needs bodywork, get it through the reconditioning process within three days or less. In reality, reconditioning often takes a back seat to customer-pay work in many dealership service departments. To speed up the process, try the following:
Devote one or two full-time service technicians to reconditioning vehicles for the used-vehicle department.
Offer incentives to your service departments to get vehicles reconditioned quickly and without comebacks. Do this with outsourced vendors, too.
2. Do-it-Yourself Photos
An array of high-quality photos are essential to attract interest in listed vehicles. If your lot service company isn’t due back for a couple of days or your service department is tied up, do the following to get a non-frontline-ready vehicle listed online today:
Use a mobile app to take four to six photos that can be posted online before reconditioning. Take shots of the vehicle’s left front quarter and rear right quarter. If the interior or tires are in good shape, get photos of them, too, and highlight features such as sunroofs and custom wheels.
Take photos from farther away to minimize imperfections, such as a nicked windshield your service department can repair later.
No photography booth? No problem. A clean, clutter-free area with the dealership’s name in the background works well.
3. Create SEO-Rich Descriptions
The quickest way to create a description is to use an automated description writer equipped on leading inventory-management tools. They simply require a VIN to pull vehicle details, such as make, model, model year, trim level, engine type. But manually written or manually enhanced descriptions are best.
Over the past several years, Google has made adjustments to its search algorithm to put a little more emphasis on relevant content and a little less emphasis on keywords. Geographic references — for example, the vehicle was purchased and serviced at the dealership that is now offering it for sale — work well for SEO.
Vehicle history matters to consumers. So, for example, if a vehicle was previously owned by a family who outgrew it, say so. Have salespeople and receptionists listen for and jot down such details to include in a vehicle’s description.
Include features, technology advances, and a call to action. Awards, ratings, special offers, and whether the owner’s manual is available should be included, too.
4. Price Strategically
You don’t have to have the lowest prices in your market, but you do need a customized pricing strategy to boost overall gross income per vehicle retailed and reinterest customers tracking your listed inventory.
Retail 70% or more of your inventory within the first 30 days, starting from the day a vehicle enters your dealership management system.
Avoid profit erosion by keeping in mind that a vehicle’s market price could become outdated if it takes 10 or more days to get it frontline ready. The reason is dealers with similar models may lower their prices.
DealerSocket’s Inventory+ offers a Health Report you can use to create customized price strategies that increase your dealership’s overall gross income per vehicle retailed. Complied daily, the report tracks inventory age, prices, third-party websites on which the inventory is posted, and the photos and descriptions accompanying those listings. Have the report emailed to you each morning.
The Health Report also provides profit-per-day information for each parking space on your lot. Shoot for a minimum profit per day of $40 for each spot. Meet that milestone and then work to increase it.
5. Keep Tabs on Listed Vehicles
Vehicles are “marketed” when they’re offered for sale online with pricing and good photography — though descriptions are important, too.
Make sure these elements accompany all inventory offered for sale on your dealership’s website and third-party sites. Check the websites once a week or more.
As previously mentioned, third-party posting information is available in DealerSocket’s Inventory+ Health Report.
6. Drive Rave Reviews
You strive to satisfy your customers. So, strive to get great customer reviews by asking your customers to write them. Reviews help attract internet leads. The facts speak for themselves:
Studies also show that most consumers trust reviews as much as they trust a personal recommendation from a friend, and they are willing to pay around 15% more for a vehicle purchased at a dealership in which they have confidence.
7. Leads Matter
The ultimate goal of effective merchandising is turning SRP/VDP views and internet leads into fresh “ups.” The more fresh ups you drive, the more chances you have to sell a customer your vehicle.
Use your inventory management tool to keep tabs on the leads your listings generate is crucial.
Keeping an eye on leads provides direction and opportunity. For example, if your dealership has a vehicle that isn’t attracting leads, try raising the price for a few days. This old tactic will usually draw out a customer who might be following it online in hopes of a price cut. However, if you don't get a bite after a day or two, you might have a vehicle with the wrong color, price, or equipment. Maybe the vehicle is just wrong for your market.
Bottom line, a vehicle doesn’t have to be frontline ready to be merchandised online. In fact, DealerSocket is partnered with very successful dealers who can have a vehicle they just took in as a trade merchandised on their site within two to three days. What they’re doing is giving themselves an extra week or two to sell the car. It may not be frontline ready, but it’s available virtually to everybody in their market.
Judy Greeby has been with DealerSocket for 13 years and currently serves as a Strategic Growth Manager. With an extensive experience in automotive industry, she partners with dealerships to make sure they get the most out of their inventory system. To connect with a Performance Advisor like Judy and learn more about Inventory+’s merchandising capabilities, call (888) 655-1435.
Are you looking to beef up your employee training program, or are you wondering how to help a struggling salesperson? Customer Success Manager Erik Post returns with a tip on how to use the unsold pipeline in DealerSocket CRM’s Daily Checkout Report to identify opportunities for training and improving your employee one-on-ones.
An interesting observation causes a general manager for a Toyota store to wonder if the industry has reached a tipping point in today’s Digital Age.
A general manager (GM) for a Toyota store in Arkansas made a stunning observation: A “super-loyal” customer who has purchased five cars from the same salesperson, who he loves and “won’t buy from anyone else,” came in as an internet lead.
Yup, instead of calling his beloved Jackie to say he’s coming in to look at a new Toyota Tacoma, Mr. Super-Loyal visited the dealership’s website, found the vehicle he wanted, and submitted a lead form. The horror, right? Well, it wasn’t the first time the GM observed such a thing.
“He was an internet sale, so the website got credit for that sale,” the GM told me. “It wasn’t a conquest sale. We didn’t go out and get us a new customer, but, technically, on paper, it’s an internet sale.”
Remember when market studies told us car buyers were shopping less than two dealerships before pulling the trigger. Well, according to a poll of 2,001 consumers conducted by The Harris Poll on behalf of Urban Science, consumers are visiting, on average, 2.5 dealerships. Wait, it gets better.
Generation Z and young millennials — you know, the ones who were supposed to skip the showroom experience altogether — are visiting, on average, 3.5 dealerships. Gen X visits 2.3 dealerships, while older millennials and Boomers visit, on average, two.
Randy Berlin, global director of dealer consulting for Urban Science, says the reason visits are higher among the younger demographics is “they have no brand identity or loyalty.”
“The young people, they’re just not brand loyal at all, except for maybe Apple,” he adds.
And get this: Berlin says the average customer is submitting an average of three leads. The reason, he says, is customers are cross-checking prices. See, price (84%) is the most significant influencer of a buying decision — even above a “low-pressure sales approach (72%).”
The GM’s story and all this new data makes me wonder why data mining isn’t getting more hype, especially when we’re dealing with a less loyal customer who is focused on price and is cross-checking two to 3.5 dealerships.
All of this reminds me of something I heard from one of our Strategic Growth Managers for our RevenueRadar tool. His name is Winston Harrell, a 33-year industry veteran and a serious data-mining pro. To demonstrate the power of the tool to new clients, he asks them to load the solution with the conditions that point to a high-target prospect or are important to the dealership. Then he has them run a report to see how many people the dealership sold a car to in the last month fit those parameters.
“It’s pure amazement,” he says. “Unfortunately, no one reached out to those customers, so they showed up as a fresh up or an internet lead.”
And you know your third-party lead providers are more than happy to take credit for those sales.
Harrell says the reason most dealers lose faith in data mining is they don’t have a defined process that’s written down, implemented, and managed by a dedicated person. Think BDC manager.
DealerSocket commissioned its own study. Conducted by Strategy Analytics, nearly 50% of the 500 dealers polled listed “Identifying the best places to invest marketing spend” as their No. 1 pain point. Again, I’m not sure why data mining isn’t getting more hype when it’s clear the answer is buried in the data.