The Secret to Moving Used Vehicles Faster without Touching ... · digital spend $9.3K/mo. BY MEDIA USED Newspapers Radio Television Direct Mail Internet Other TOTAL AVG. OF ALL DEALERSHIPS

The Secret to Moving Used Vehicles Faster without Touching Price

Jason KnightCo-Founder & Vice Chairman, LotLinx

[email protected]

Michael MeyerDigital Director, Lundgren Automotive Group

[email protected]

Advertising Scale Is Out of Whack

Executive Summit#DSES

Advertising Grows as Margin Shrinks

$10

8

6

4

4.5%

4

3.5

3

2.5

2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

TOTAL ADVERTISING EXPENDITURED BY YEAR – IN BILLIONS OF DOLLARS

GROSS MARGIN AS PERCENTAGE OF SELLING PRICE BY YEAR – NEW VEHICLES RETAILED


AVG. OF ALL

DEALERSHIPS

$66,253

$65,690

$97,657

$46,208

$111,822

$42,114

$429,744

BY MEDIA USED

Newspapers

Radio

Television

Direct Mail

Internet

Other

TOTAL

ESTIMATED ADVERTISING EXPENSES PER DEALERSHIP, 2013

Avg. monthly

digital spend $9.3K/mo.

BY MEDIA USED

Newspapers

Radio

Television

Direct Mail

Internet

Other

TOTAL

AVG. OF ALL

DEALERSHIPS

$36,620

$57,942

$86,914

$41,719

$321,001

$35,171

$579,425

ESTIMATED ADVERTISING EXPENSES PER DEALERSHIP, 2017

Avg. monthly

digital spend $26.75K/mo.

Total Ad Spending: +35%

Digital Advertising: +288%

Sales +11%

Margin -38%

The Shift to digital advertising continues

Executive Summit

Where is the Web Dividend?


The internet has changed the buying dynamic so traditional marketing

practices are largely obsolete

q Shoppers use 24 digital resources, but visits fewer than 2 dealerships

q Individual vehicle sale rate can be correlated to online shopping

frequency


THERE IS

NO LINEAR

PURCHASE

PATTERN

First KPI

Percent of Sales

Search InventoryCPO

Request a QuoteBuild your Own

Trade in

Model InformationLocate Dealer

22.2%17.8%

13.8%11.3%

10.2%8.4%

5.5%

Last KPI

Percent of Sales

Search InventoryCPO

Request a QuoteBuild your Own

Trade in

Model InformationLocate Dealer

24.6%14.8%

13.0%11.1%

7.9%9.4%

6.3%

Inventory Search dominates first & last KPI share…

The purchase process is messy

Hope


AUDIENCE INVENTORY

+ Hope

Most digital marketing has it backwards

Advertising typically focuses first on an audience to sell to the dealer and then hope that there is positive ROI.


HOPE IS NOT A STRATEGY

Hoping for the right shoppers in a purchased audience is like hoping to

find a needle in a haystack.

This backwards approach results in wasted investment,

inefficiency and ultimately lost sales.


* Data of 299 dealers & 483,715 VINs Jan 1 – Jun 30, 2016

Shoppers correlate to vehicle sales!

Good News:

The opportunity cost of Hope, is immense

Inadequate targeting results in waste

Bad News:


Start with the vehicle and match shoppers who have declared their purchase intent

VIN-SPECIFIC TARGETING LOW-FUNNEL IN-MARKET

SHOPPERS

+ Hope+ HopeINVENTORY TO DEMAND

Start with the end in mind: Car as the star

How Can Artificial Intelligence Help?


What is required to sell a VIN?







Better Shoppers Equal Better Margins


1. Track consumers online at multiple touch points during the shopping journey.

2. Score purchase intent technology identifies those who are most ready/likely to buy.

3. Target them at the time of maximum opportunity.

Active Targeting w/ Artificial Intelligence

How Do We Find

“Better Shoppers?”

WE ARE

CONNECTED

© 2002-2018 LOTLINX, INC. ALL RIGHTS RESERVED. CONFIDENTIAL AND PROPRIETARY TO LOTLINX, INC. NOT A PUBLIC DISCLOSURE.


Shoppers who have looked at other makes and models in the Silverado category. (ie. Truck Shoppers)

Shoppers who looked for a Silverado. (ie. Silverado Shoppers)

Silverado Shoppers who we have seen on more than one auto site in last 10 days (shopping intent)

Silverado Shoppers who have last-looked at other makes and models of trucks. (Conquest Potential)

Shoppers who have shown interest in a competitive truck AND have shown consistent interest in a Silverado AND

visited multiple auto sites in last 10 days.

804,663

347,052

76,636

7,617

22,580

Score: 75

Score: 100

Score: 500

Score: 1,250

Score: 2,500

The shoppers are out there!


Be publication agnostic


OBSERVE

MEASURE

SIGNALS

SCORE

TARGETDIRECT TO

LANDING PAGE

MEASURE

IMPACT

OPTIMIZE

/A.I./ Optimization:

• Use free tools like Google Analytics & Google Tag Manager to capture online

activity

• Identify and measure KPIs KPIs (leads,

calls, chats, photo views, etc.) that

correlate to sales

• Drive KPI measurement into targeting by

VIN, shopper, publisher and dealer

• Evolve conquest source & channel mix directly based upon KPI performance

Don’t be satisfied: continuously optimize

What is the A.I. Benefit?


SITE METRICS

What is the impact

at the dealership?

-11XIncrease in engaged

shopping sessions

+76%Cost per goal

conversion

- Delivers +18% increase in net new shopping sessions

- Increases share of unique visitors engaging with VDP by +76%

- Increases VDP volume by +21%

- Decreases cost per engaged VDP session by +400% ($16.69 to $4.09)


ENGAGEMENT METRICS

What is the impact at the dealership?

-298%Increase in key goal

conversions

+170%Cost per VDP

- 170% increase in key goal conversions

- Decreases cost per VDP by 298% (from $8.34 to $2.80)

- -4X decrease in cost per engaged shopping session (from $16.69 to $4.08)


LOT METRICS


-$546Increase in 30-day

close rate

+20%Decrease in average

holding cost

- Decreases inventory turn by +21 days

- Reduces cost per unity sold by + $400


SALES MATCH-BACK


+19XIncrease in 30-day

purchase– all brands

+3.3XIncrease in 30 day

purchase – target brand

Successful Retail Strategies


Create dashboards that track performance: website


Aging units by group

1. Identify and track like groups of vehicles

2. Create performance benchmarks

3. Act on these measures

Create dashboards that track performance: aging


o None of your advertising is designed for autopilot

o Customer walk-ins are YOURsales to lose

o Use available search data

ü Endemic sites will help you be successful

ü Scarcity reports should be part of your shopping list

o Pricing Strategies that work

o Selling used cars is NOT a race to

the bottom

o Adjust pricing on Thursdays & get ready for the weekends

o Then look at your pricing on Monday to do the same for the week

o Include the service manager as part of your used car strategies

Successful marketing strategies


o Reduce wholesale vehicles, turning them into safe and reliable units for retail

o Write quality descriptions, bragging about the work you’ve performed

o Renewed focus new and used vehicle merchandising

o Treat your digital showroom the same as bricks and mortar

o Merchandising Matters

o Plan your work: Have a unique marketing plan for EACH vehicle

o Beach front v ocean view: Most 3rd

party sites give you 120-250 characters to showcase units

o Speed matters: Recon reduced to 40 clock (NOT working!) hours from lot arrival to front line ready and online

o Pride: All used vehicles have custom comments, including RO

work & warranty information

Successful inventory strategies


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Impact of these strategies

Greenville Honda Auburn Honda

Resources That Can Help


Google Analytics Info:Introduction Tutorial: https://www.youtube.com/watch?v=WC3ONXJn9FQ

Standard GA Dashboard: https://www.lotlinx.com/lotlinx-

resources/setting-vin-vertising-dashboard/

General Help: https://support.google.com/analytics#topic=3544906

Google Tag Manager Info: Introduction tutorial:

https://www.youtube.com/watch?v=KRvbFpeZ11Y

Definition of Events: https://support.google.com/analytics/answer/1033068

General Help:

https://support.google.com/tagmanager/?hl=en#topic=3441530

More Insights/White Papers:

https://www.lotlinx.com/resources/library/

Occam’s Razor: http://www.kaushik.net/avinash/ - Insightful blogger/thinker

http://www lunametrics com/blog/ - Wide ranging tips/blog

Free Data Tools:GA/GTM Setup:

https://www.lotlinx.com/contact/

Inventory Analysis: https://www.lotlinx.com/lotlinx-vvo

Resources that can help

#DSES

The Secret to Moving Used

Vehicles Faster

without Touching

Price

Jason Knight• Co-Founder & Vice Chairman,

LotLinx

• [email protected]

• 510-858-0197

Michael MeyerDigital Director, Lundgren Automotive [email protected]

Documents

The Secret to Moving Used Vehicles Faster without Touching ... · digital spend $9.3K/mo. BY MEDIA USED Newspapers Radio Television Direct Mail Internet Other TOTAL AVG. OF ALL DEALERSHIPS