The Secret to Moving Used Vehicles Faster without Touching Price
Jason KnightCo-Founder & Vice Chairman, LotLinx
Michael MeyerDigital Director, Lundgren Automotive Group
Advertising Scale Is Out of Whack
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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
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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?
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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
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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
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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.
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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.
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* 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:
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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?
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What is required to sell a VIN?
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What is required to sell a VIN?
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What is required to sell a VIN?
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What is required to sell a VIN?
Better Shoppers Equal Better Margins
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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.
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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!
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Be publication agnostic
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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?
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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)
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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)
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LOT METRICS
What is the impact at the dealership?
-$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
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SALES MATCH-BACK
What is the impact at the dealership?
+19XIncrease in 30-day
purchase– all brands
+3.3XIncrease in 30 day
purchase – target brand
Successful Retail Strategies
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Create dashboards that track performance: website
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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
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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
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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
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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
• 510-858-0197
Michael MeyerDigital Director, Lundgren Automotive [email protected]