Catering to the Internet Used Car Shopper

Catering to the Internet Used Car Shopper
New realities of marketing and selling to the Internet
Used Car Shopper
With
Steve Nickelsen
CEO of Nickelsen Partners LLC
And
Chris Patton
President, Mike Patton Auto Family
Moderated by
Mike Bowers
Executive Editor, DealersEdge
Presented by DealersEdge
Steve Nickelsen, CEO - Nickelsen Partners, LLC
Steve Nickelsen, CEO of Nickelsen Partners LLC, has focused on improving dealership net profit for
the past 25 years. In his personal consulting to dealers and as leader of other consultants, he has
worked with more than 8,000 dealers, general managers, and sales managers to improve their businesses, and he has trained more than 20,000 automotive salespeople. His clients include some of the
most profitable automotive organizations in North America, as well as some with among the highest
customer satisfaction and retention.
He is a frequent speaker for companies and conventions related to the automotive industry, and he has
been the highest-rated speaker at NADA. In addition to working directly with car dealers, he has
worked with OEMs and importers to help them improve the sales, profitability, effectiveness, and
satisfaction of their dealer bodies.
Examples of his work include:
*
*
*
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For a group of domestic-brand dealerships, helping them rise from average to outstanding
sales performance (including making their largest store the #12 Chevrolet store in the U.S. in sales) by coaching the dealer
and his management team
For a dealer with both import and domestic stores, enabling the dealer to achieve greater profitability — and happiness —
by helping him define and implement consistent, effective processes for major dealership activities, particularly the vehicle
selling process, thereby creating an earned confidence that the operations were stable and under control.
For a Canadian importer, helping them achieve month-over-month sales growth in an otherwise declining market, by creating
and conducting a series of targeted performance workshops.
For a distributor of Toyota vehicles, helping them grow their market share by more than 15% over two years, through work
with the distributor and directly with their dealers.
Chris Patton - President, Mike Patton Auto Family
Chris Patton is President of the Mike Patton Auto Family in LaGrange, Georgia, operators of Honda, Ford, Lincoln, Mercury, Chrysler,
Dodge, and Jeep franchises. Along with his brother (and partner) Brian, Chris is a third-generation owner and grew up working in every
department in the business, beginning at the age of 10. After college, he went to work full-time with his father, Mike. He became General
Manager of C.J. Patton Mazda-Hyundai in Rock Hill, South Carolina from 1994 to 1997. He moved back to LaGrange in 1997 to assume
his current position. The Mike Patton Auto Family has approximately 95 employees and retailed over 1,800 new and used vehicles in
2009.
The Overview
1. Strategy overview
- What’s possible?
2. The inventory
- What vehicles do we want?
- Creating “buy lists”
3. Finding the vehicles
4. Buying them for the right price
- Transporting them
5. Vehicle tracking
6. Service and Reconditioning
7. Pricing
- Initial and during ownership
8. Merchandising
- Internet merchandising
- On-lot display and merchandising
9. Selling used vehicles
10. Wholesale disposal
Page 4
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
The 10
building
blocks in
this series
Page 5
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
In December’s Webinar
∎
The Strategy, the Inventory, and Finding
Cars
– Selling more than you’d think possible: a variety
of strategies
– What should my inventory look like?
– Where do I find those vehicles?
Page 6
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
In Last Month’s Webinar
∎
Buying, Tracking, getting the vehicles
through Service, and initial Pricing
– Now that you found the vehicles, what are some
of the best strategies for buying? Sounds simple,
but you might hear a new strategy
– New ideas on tracking the vehicles from
purchase to your front line – all designed to
reduce cycle time
– Getting Service and Sales on the same page
– How do you determine the best “initial” price for
each vehicle?
Page 7
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Today We’re Going to Discuss
∎
Marketing, Selling, and the Disposal of used
vehicles
– Now that you have found the right vehicles,
you’ve gotten them through service and recon,
how do we find prospects?
– The “selling” of used cars in this new “efficient
market” has changed. We’ll cover those changes
today.
– The best disposal processes will be discussed.
Page 8
An Offer Before We Get Started
∎
Lots of questions since we started these webinars:
– “How do I know how well I’m doing?”
– “How do I decide what to change?”
– “How do I determine my “market days supply” or my “price to market”?
∎
We can help you answer those questions.
–
–
–
–
Go to www.nickelsenpartners.com/dealers.
Click on the “free used-car mini-assessment” button.
Fill out the short questionnaire about your business.
A consultant from Nickelsen Partners will call you to share the results and
explain how you compare with other dealers.
– No cost, no obligation.
Page 9
Another Offer Before We Get
Started
∎
∎
This is NADA convention week. If
you’re coming to Orlando, I’d love
to meet you.
Call my cell at 330.665.9469
Page 10
Our Guest Dealer, Mr. Chris Patton
∎
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∎
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∎
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Located in LaGrange, Georgia
Sells Ford, Honda, Chrysler,
Dodge and Jeep and Preowned vehicles from three
rooftops
Net profit up a lot in 2009
compared to the prior year
My pilgrimage…
Today, we are in “fast learning
mode”.
Our vision is “moving people”.
Page 11
Mike Patton Auto Family Prices Their Vehicles
Competitively, Which Helps Them Turn Fast
Page 12
Mike Patton Auto Family Prices Their Vehicles
Competitively, Which Helps Them Turn Fast
Almost all retail
inventory is no more
than 21 days old
Page 13
Mike Patton Auto Family Prices Their Vehicles
Competitively, Which Helps Them Turn Fast
Almost all retail
inventory is no more
than 21 days old
Most retail
inventory is priced
competitively
Page 14
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Marketing
■
■
■
■
■
■
■
■
Key metrics for Internet shoppers
AutoTrader.com listings
Cars.com listings
Why prospects click through
Website comparisons
Self-assessment quiz for on-line
marketing
Patton’s on-line merchandising reports
On-lot display and merchandising
Page 15
Key Metrics for Internet Shoppers
Physical
Walk or drive
around the lot
Get out and
study the vehicle
Drive, negotiate, buy
Page 16
Key Metrics for Internet Shoppers
Physical
Internet
Scan with search
engines and thirdparty sites
Walk or drive
around the lot
Get out and
study the vehicle
Click through and
study the vehicle
Drive, negotiate, buy
Page 17
Key Metrics for Internet Shoppers
Physical
Internet
Scan with search
engines and thirdparty sites
Walk or drive
around the lot
Get out and
study the vehicle
“page views”
Click through and
study the vehicle
Drive, negotiate, buy
Page 18
Key Metrics for Internet Shoppers
Physical
Internet
Scan with search
engines and thirdparty sites
Walk or drive
around the lot
Get out and
study the vehicle
Click through and
study the vehicle
“page views”
“detailed page views”
Drive, negotiate, buy
Page 19
AutoTrader.com
Page 20
AutoTrader.com
Geographic search by
make, model, and year
Page 21
AutoTrader.com
Geographic search by
make, model, and year
Paid advertisements
Page 22
AutoTrader.com
Geographic search by
make, model, and year
Paid advertisements
Default sort puts high
prices on top
Page 23
AutoTrader.com
Geographic search by
make, model, and year
Paid advertisements
If you don’t pay for
“premium “ position,
you won’t be on page 1!
Default sort puts high
prices on top
Paid real estate: “premium”
listings on top
Page 24
Two Ads for Similar Vehicles on AutoTrader.com:
Where Would You Click?
∎
∎
Lots of
pictures, or
just one
stock
photo?
Vehiclespecific
description?
Page 25
Cars.com
Page 26
Cars.com
Geographic search
by make, model,
year and trim level
Options to narrow
search by
certification, price
band, mileage
band, year, listing
date, number of
pictures, and
keywords
Page 27
Cars.com
Same default sort on
price (high-to-low)
but not “premium”
listings
Geographic search
by make, model,
year and trim level
Options to narrow
search by
certification, price
band, mileage
band, year, listing
date, number of
pictures, and
keywords
Page 28
Same default sort on
price (high-to-low)
but not “premium”
listings
Cars.com
Geographic search
by make, model,
year and trim level
Much less text on
main page than on
AutoTrader.com
Options to narrow
search by
certification, price
band, mileage
band, year, listing
date, number of
pictures, and
keywords
Page 29
Website Comparisons
∎
91% of Internet shoppers for used
cars use third-party sites.
AutoTrader.com and Cars.com are the
biggest.
– AutoTrader makes/lets dealers pay for
premium positioning in a search.
Cars.com does not.
– AutoTrader shows more descriptive text
about each vehicle on the main page
than Cars.com. So more people click
through on Cars.Com, simply because
they can’t get enough description
otherwise.
– Since Cars.com shows so little text, it is
essential to make that one line of
description count.
Page 30
Website Comparisons
∎
Three out of four Internet
shoppers for used vehicles
visit a dealer site. But it is
not clear how much of that is
only after they have visited
third-party sites or the
physical dealership.
Page 31
If Internet Shoppers Don’t See Your Cars on the
Web, They Can’t Shop Seriously for Them
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Is the vehicle posted very quickly after you
own it?
Is it on the major car-shopping websites?
Is it priced accurately and competitivelyenough on the Internet?
Is it prominent enough on AutoTrader, or
do you need to buy better “real estate”?
Page 32
If Internet Shoppers Don’t See Your Cars on the
Web, They Can’t Shop Seriously for Them
∎
∎
∎
∎
∎
Is the vehicle posted very quickly after you
own it?
Is it on the major car-shopping websites?
Is it priced accurately and competitivelyenough on the Internet?
Is it prominent enough on AutoTrader, or
do you need to buy better “real estate”?
Are you measuring how many views each
vehicle is getting?
– “Vehicles” report from AutoTrader.com
– “Merchandising” module from vAuto
Page 33
If Internet Shoppers Don’t Like What They See,
They Aren’t Going to Buy Your Vehicles
∎
∎
Is the price competitive with the
other vehicles that show up in the
same searches?
Are there enough pictures showing
different aspects of each vehicle?
– High-quality photos
– Interior and exterior, highlighting
specific vehicle features
∎
Is the description an effective sales
pitch or just a laundry list?
Page 34
A Quick Internet Merchandising Quiz
∎
When was the last time you acted like a
consumer and searched for vehicles like
yours on the web?
– How did your vehicle postings compare?
– Did they show up early enough in your search,
or were they buried behind pages of competing
vehicles?
– If you were a consumer, would you have clicked
through for more information, or did competing
vehicles look more appealing?
∎
Are you consistently measuring how many
click-throughs each vehicle is getting?
– Rule of thumb: On average, 3% - 4% of
prospects click through
Page 35
Here Is the “Vehicles” Report from AutoTrader
This report shows every used
vehicle listed on AutoTrader.com
and the associated activity.
Page 36
Here Is the “Vehicles” Report from AutoTrader
This vehicle appeared in 700
searches and had 8 detailed views.
8 / 700 = 1.1% click-through rate.
Page 37
This Is Patton’s Top-Level Merchandising Screen
from vAuto
Page 38
This Is Patton’s Top-Level Merchandising Screen
from vAuto
List of websites
the dealer
advertises on
Page 39
This Is Patton’s Top-Level Merchandising Screen
from vAuto
List of websites
the dealer
advertises on
Status of vehicles,
photos, price, and
odometer readings
Page 40
This Is Patton’s Top-Level Merchandising Screen
from vAuto
List of websites
the dealer
advertises on
Status of vehicles,
photos, price, and
odometer readings
Full-month forecast for
search results page
views and click-throughs
to vehicle detail pages
Page 41
This Is Patton’s Top-Level Merchandising Screen
from vAuto
AutoTrader click-through rates
tend to be lower than for Cars.com
because Cars.com shows less
information on the search screen
Page 42
This Is the Internet Status for Each Patton Car
Page 43
Each vehicle
This Is the Internet Status for Each Patton Car
Page 44
Each vehicle
Each website
This Is the Internet Status for Each Patton Car
Page 45
This Is the Internet Status for Each Patton Car
The symbols for each vehicle
show – for each website –
whether the vehicle is listed,
and whether the price, photos,
and odometer reading are valid.
Page 46
This Is the Internet Status for Each Patton Car
This vehicle’s price changed today,
so most websites do not yet show
the updated price
Page 47
Here Is the Internet History for that JustRepriced Vehicle
Vehicle that was
just repriced
Page 48
Here Is the Internet History for that JustAdvertised price
Repriced Vehicle
trend before today’s
price change
Page 49
Here Is the Internet History for that JustAdvertised price
Repriced Vehicle
trend before today’s
price change
Search page
views and
trend line
Page 50
Here Is the Internet History for that JustAdvertised price
Repriced Vehicle
trend before today’s
price change
Day-by-day page views
and click-throughs
Search page
views and
trend line
Page 51
New Topic: On-Lot Display and Merchandising
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Groupings
Price display
Hang tags
What’s wrong with this
vehicle?
Loaning used vehicles
As-is vehicles
Page 52
Chris Patton’s Views on Marketing…
∎
We’ve had good success
with:
– Letting all dealerships sell all
used
– Segmenting our vehicles
– With AutoTrader and
Cars.com
– Other wins…
∎
We monitor detailed page
views.
Page 53
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Selling Vehicles
■
The basics
– Sales process
– Morning variable manager meetings
– Sales one-on-ones
■
Building value: the “folder”
– Why buy here?
– CarFax and AutoCheck
■
Sales pay plans
Page 54
Have Everyone Comply with a Strong Sales Process
Page 55
The Morning Variable Manager Meeting
8:30 a.m. is a great start time.
∎ Review yesterdays prospects
– Rank 1-5, or hot/warm/cold
– Decide specific follow-up for each
salesperson
∎
Review all “hots”
– Brainstorm how we are going to “sell units”
∎
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∎
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Review yesterday’s incoming phone calls
Review Internet leads
Review deals in Finance that are not delivered
Review today’s appointments
Page 56
One-on-Ones with Salespeople
10:00 a.m. Schedule 10 minutes apart
∎ Personal update
∎ Yesterday’s prospects
∎ Review all prospects
∎ Today’s appointments
∎ Review individual data –
goals vs. actual
–
–
–
–
Sales month to date
Discovery
Manager “Hi’s”
Final manager “T.O.”
Page 57
The “Folder” Helps Build Value in the Vehicle
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CarFax/AutoCheck report
Market price comparison
“Why buy here”
Internet pricing policy
Service record
MSRP
Page 58
Build Value: Why Buy from You?
∎
∎
Patton uses a set
of easel charts to
build value.
There are 16
easel “slides” in
this presentation.
Page 59
Patton’s Strategy to Build Value Includes Specific
Benefits
Page 60
Patton Builds Trust by Demystifying the Buying
Process as it Builds Value
Page 61
Patton Also Asks for Referrals During This Process
Page 62
Another New Tool for Building Value in the
Asking Price: “RealDeal”
Page 63
A Sample RealDeal Report
Page 64
Use CarFax to
Show the
Strengths of Your
Vehicles …
∎
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Keep with every
vehicle
Run on lower priced
vehicles you find in
competitive sets
Page 65
… or Use
AutoCheck
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How good are
your vehicles?
How bad are
lower-priced
alternatives?
Patton uses
AutoCheck.
Page 66
Rethinking Sales Compensation
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Get selling
costs under
control
Realign
incentives to
hold gross on
competitive
Internet prices
and reward
process
compliance
Page 67
Chris Patton’s views on Selling…
∎
We’re one-price, so…
– We have a specific selling process
– Which includes explaining one-price
∎
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We have a morning variable
manager meeting every day.
We track all of the “metrics”.
– Showroom
◆ We have greeters.
– Phone
◆ We use an off-site service to log the
calls.
– Internet
Page 68
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Disposing of Vehicles
Our goal is to retail EVERY vehicle, at some
price, to a customer.
That builds market share, plus we have the
potential of finance and insurance income,
future service business, and a better chance of
other purchases that they influence.
- Rich Ackman
Director of Variable Operations
Germain Auto Group - Ohio
Page 69
Wholesale Disposal
∎
∎
If price is managed during
ownership, fewer vehicles
need to be wholesaled.
Internal auctions.
– Other stores you own
– Wholesalers
∎
Who reps the vehicle?
Page 70
Chris Patton’s views on Disposal…
∎
We try to retail every vehicle
– Get F&I
– Get future service business
– Gain market share
Page 71
Chris Patton’s Business Model
Processes
Tools
Core Values
and Strategy
Page 72
Chris Patton’s Business Model
Processes
Tools
Core Values
and Strategy
■ Need to treat
customers
well
■ Need to make
money
■ One-price
■ Velocity
Page 73
Chris Patton’s Business Model
Processes
■ Need to treat
customers well
Tools
■ vAuto
■ Customized N-DOTS
(Nickelsen Dealership
Operations Toolkit)
Core Values
and Strategy
■ Need to make
money
■ One-price
■ Velocity
Page 74
Chris Patton’s Business Model
■ One-price selling
■ Strong process compliance
Processes
– MVMMs and one-on-ones
– Monitoring input and
outcome metrics
■ Need to treat
customers well
Tools
■ vAuto
■ Customized N-DOTS
(Nickelsen Dealership
Operations Toolkit)
Core Values
and Strategy
■ Need to make
money
■ One-price
■ Velocity
Page 75
Chris Patton’s Results
∎
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Sales are up.
We have fewer old
vehicles.
We are more
profitable.
I’m more pro-active
with my time.
– 60-70% is
“scheduled” with
“important” stuff
– I’m doing less
“urgent but
unimportant” today.
Page 76
Some Key Points …
∎
∎
The used-vehicle market has changed
and is changing, so dealers must change
also.
Changing technology is necessary, but it
is NOT sufficient.
–
–
–
–
∎
Software
Processes
Compensation
Organization structure and staffing
The opportunity is big. The right
strategy, executed well, has doubled
used-vehicle sales at a variety of
dealerships.
Page 77
A special “Thanks” to Chris Patton
today for sharing his knowledge
and experiences with us.
For any additional questions, please email me at:
[email protected]
or my cell is 330.665.9469
Steve Nickelsen, CEO
www.nickelsenpartners.com
Page 78
Thanks to all of you for participating and
listening today, and congratulations on your
desire to learn!
For any additional questions, please email me at:
[email protected]
or my cell is 330.665.9469
Steve Nickelsen, CEO
www.nickelsenpartners.com
Page 79