Equity Mining Defined

Shawn Ryder
I am doing some research into Equity Mining and simply wondering how do dealers define the term? Is it something that a majority of dealers truly understand as of yet?
Lance Knopp
I like the idea of Equity mining however the hard part is finding the right person to work it. At a large dealership we have a ton of customer that fall in to our equity program, however not all customers are interested in upgrading. I ran with VXChange program for about 6 months, great program has lots of upsides to it however is very $$$ I was spending 10,000-12,000 per month. They have a great option of being able to target credit tiers that you want to market too. The down side is this day in age the newer salespeople don't want to work the service drive or this tool. Like anything it is a numbers game the more you talk too the better chance you have at trading customers out of current vehicle in to a new one.
Chris K Leslie
Shawn, I never liked the term Equity Mining. What we are talking about here is Database Marketing. Any good marketing strategy should already be looking at ways to monetize the database. The ones who are good at it will win over the ones who suck at it. That's how great eCommerce companies are getting you to buy things online. Database Marketing + Email = $$$
Tim Schaiberger
I am at rural dealership in Northern Michigan which mostly consists of retirees and 60% Ford retired traffic. What is the best way to optimize a 40 new / 30 used vehicle per month dealership?
mark rask
We have tried several products and are trying to find the secret sauce. I think it is more about the process than the system that you use
Allen Levenson
Shawn, I hate when vendors weigh in with a sales pitch, so I will try to not do that. Our company, Prospect Vision, is one of the big players in the equity mining space, so I believe I can (hopefully objectively) answer your question. I believe Shawn is right as database marketing really is the overarching term as equity is just a piece of that, primarily related to finance and lease customers. For finance customers, equity is pretty straightforward...the ACV of the customer's current vehicle vs. their payoff balance. There are quite a few other criteria one uses in database marketing (months owned, months remaining, etc.) but equity truly is the best determinant of someone who is likely in market and in a position to purchase a new vehicle. BTW, you can target folks who have some negative equity as well. For leases, equity is defined as the ACV vs. the residual value PLUS the remaining payments. For cash customers, you could consider them having 100% equity since they own their vehicle out right. The bottom line is every dealership should be doing database marketing...that is working your customer database methodically and consistently throughout the year...and equity happens to be just one but the most important criteria. There are two basic approaches...using a software (like AutoAlert) where your sales team needs to be reaching out to in equity customers, or using a full service solution (like Prospect Vision) who does the data crunching and develops campaigns (direct mail, email, digital) for you to your in equity customers. I hope this addresses your question, and if not, please reach out to me (203) 521-2001. Thx.

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