When vendors look at dealer's marketing and training budgets as a fixed pie, disparaging remarks and misinformation are sure to follow. Virtually everything a dealer can buy to increase sales has been said to not work at some point or another. While every product or service related to revenue generation must be held accountable for the value it delivers, nearly all of them can be justified under the proper circumstances and at the right price point.

The following four-minute video uses animation to demonstrate that performing well with one marketing or training solution often increases the value of complementary opportunities. http://revenuegurutraining.articulate-online.com/8685108185 The more a dealership is fixated on a single solution, the deeper they fall into diminishing returns. The good news is that extreme expertise in one area often enhances the value of other opportunities. We refer to this as The Seesaw Effect. The more dealers understand these seesaws the better equipped they are to place the next investment in the opportunity that will serve the store best.

Dealers will be served best by those vendors who accurately identify the revenue enhancement that will come from investing in their products as well as the complementary products that can be profitably invested in before or after their own product is purchased. Vendors have a responsibility to become trustworthy marketing consultants. When a vendor advises the dealer to invest $10,000 per store per month in their own product and minimize the investment in complementary products and services, it's probably time to hide the checkbook until rational advice can be obtained.

There are some cautions and exceptions. Investing in a branding campaign (usually with TV, radio, outdoor, and general display) is not advisable unless the campaign can be sufficiently funded, a unique selling proposition exists, and there is a commitment to maintain the campaign long term. Still, a great branding campaign can have a positive influence on the production of online listings, newspaper ads, SEM, and even the ability to set appointments and close sales. Conservatively, over $1,000,000,000 in dealer advertising and training budgets are misspent  each year. Thinking through the seesaws within Galbraith's map can go a long way toward cutting your portion of that waste. 

When vendors look at dealer's marketing and training budgets as a fixed pie, disparaging remarks and misinformation are sure to follow. Virtually everything a dealer can buy to increase sales has been said to not work at some point or another. While every product or service related to revenue generation must be held accountable for the value it delivers, nearly all of them can be justified under the proper circumstances and at the right price point.

The following four-minute video uses animation to demonstrate that performing well with one marketing or training solution often increases the value of complementary opportunities. http://revenuegurutraining.articulate-online.com/8685108185 The more a dealership is fixated on a single solution, the deeper they fall into diminishing returns. The good news is that extreme expertise in one area often enhances the value of other opportunities. We refer to this as The Seesaw Effect. The more dealers understand these seesaws the better equipped they are to place the next investment in the opportunity that will serve the store best.

Dealers will be served best by those vendors who accurately identify the revenue enhancement that will come from investing in their products as well as the complementary products that can be profitably invested in before or after their own product is purchased. Vendors have a responsibility to become trustworthy marketing consultants. When a vendor advises the dealer to invest $10,000 per store per month in their own product and minimize the investment in complementary products and services, it's probably time to hide the checkbook until rational advice can be obtained.

There are some cautions and exceptions. Investing in a branding campaign (usually with TV, radio, outdoor, and general display) is not advisable unless the campaign can be sufficiently funded, a unique selling proposition exists, and there is a commitment to maintain the campaign long term. Still, a great branding campaign can have a positive influence on the production of online listings, newspaper ads, SEM, and even the ability to set appointments and close sales. Conservatively, over $1,000,000,000 in dealer advertising and training budgets are misspent  each year. Thinking through the seesaws within Galbraith's map can go a long way toward cutting your portion of that waste. 

Fifteen years ago, the shopping radius of your customers was smaller. More of your sales came from people in your local area who used the same cable system, read the same paper, and listened to the same local radio stations. You thought you had a pretty good gut feel for the market, any you probably did. Besides, you didn't have much choice. Good marketing data was scarce.

Today, new customers are considering your inventory from further away and your local customers are looking at inventory from dealers they never considered before. Shoppers are bouncing from site to site like they were in a pinball machine. You have no idea who sees and hears your ads and who strips your commercials from your content. In short, the changes in consumer behavior have given your gut feel a gastric bypass.

I keep asking myself why thousands of dealers subscribing to J.D. Power's PIN product don't use the free PowerDealer tool, or why more dealers haven't signed up for Dataium's free VisiCogn Insite product. Why don't more dealers subscribing to vAuto and FirstLook take full advantage of the tools they subscribe to? These products, and others, provide good useful data that can facilitate sound decision making. I'm beginning to think it's not these analytical tools that are being dismissed as much as it is the process of using them.

Decision makers of my generation need to face up to the fact that marketing is more complicated than it used to be, and our gut feel is less equipped for the job. In fact, some of our experience from 30 years ago is working against us when we make decisions in a vastly different landscape. Networking with other dealers isn't enough either, because media penetration is much different in one community than it is another. You've got to make sense of the numbers in your DMA and base your decision making on the clearer picture they can provide.

We used to say that the homecoming king would make more money than the class nerd. The social skills involved in selling were more valuable than analytical skills. Today, if you don't have enough nerd power going for you there won't be enough store traffic to keep the homecoming king in business. Getting the data is cheap and often free. Start there and begin putting the data to work for better decision making about advertising buys, vehicle acquisitions, pricing, merchandising decisions, and store operations. 

Fifteen years ago, the shopping radius of your customers was smaller. More of your sales came from people in your local area who used the same cable system, read the same paper, and listened to the same local radio stations. You thought you had a pretty good gut feel for the market, any you probably did. Besides, you didn't have much choice. Good marketing data was scarce.

Today, new customers are considering your inventory from further away and your local customers are looking at inventory from dealers they never considered before. Shoppers are bouncing from site to site like they were in a pinball machine. You have no idea who sees and hears your ads and who strips your commercials from your content. In short, the changes in consumer behavior have given your gut feel a gastric bypass.

I keep asking myself why thousands of dealers subscribing to J.D. Power's PIN product don't use the free PowerDealer tool, or why more dealers haven't signed up for Dataium's free VisiCogn Insite product. Why don't more dealers subscribing to vAuto and FirstLook take full advantage of the tools they subscribe to? These products, and others, provide good useful data that can facilitate sound decision making. I'm beginning to think it's not these analytical tools that are being dismissed as much as it is the process of using them.

Decision makers of my generation need to face up to the fact that marketing is more complicated than it used to be, and our gut feel is less equipped for the job. In fact, some of our experience from 30 years ago is working against us when we make decisions in a vastly different landscape. Networking with other dealers isn't enough either, because media penetration is much different in one community than it is another. You've got to make sense of the numbers in your DMA and base your decision making on the clearer picture they can provide.

We used to say that the homecoming king would make more money than the class nerd. The social skills involved in selling were more valuable than analytical skills. Today, if you don't have enough nerd power going for you there won't be enough store traffic to keep the homecoming king in business. Getting the data is cheap and often free. Start there and begin putting the data to work for better decision making about advertising buys, vehicle acquisitions, pricing, merchandising decisions, and store operations. 

    Car buyers pay for the CarWoo service. They have skin in the game, so there is no doubt they are serious buyers. The dealer's opportunity to submit offers to these buyers is completely free with no strings attached, no fee when the sale is made, and no upsell products. This business model is completely different from leads or listings.

    The buyers who sign up with CarWoo are largely the same people who avoid ads by recording programs or watching on-demand movies, Showtime, HBO, etc. Chances are they don't see dealer's ads enough to feel they know any of them and are willing to pay for a good shopping process just like they pay for good, commercial-free TV. Among new-car shoppers, there is reason to believe the size of this group is growing. CarWoo won't replace your need for listings services and leads providers, but it will send some buyers your way for free. 

    Getting the most out of CarWoo requires a few minutes of pre-work. The call notifying the store of an opportunity often ping pongs around the store and ends up in a voicemail. Without registering one or more contacts with CarWoo, this could easily happen at your store and may have already. Meanwhile, your competitor is communicating an offer that demonstrates they are the right store to buy from. The promptness of their response adds credibility to their claim, and now you are starting off in the hole, if you ever get started. In my view, this is a fantastic opportunity and should not be left to chance. Sign your store up ahead of time with the name and contact information of someone responsible for these opportunities. Here is the link to do that: http://dealers.carwoo.com/dealers/new.

    Car buyers pay for the CarWoo service. They have skin in the game, so there is no doubt they are serious buyers. The dealer's opportunity to submit offers to these buyers is completely free with no strings attached, no fee when the sale is made, and no upsell products. This business model is completely different from leads or listings.

    The buyers who sign up with CarWoo are largely the same people who avoid ads by recording programs or watching on-demand movies, Showtime, HBO, etc. Chances are they don't see dealer's ads enough to feel they know any of them and are willing to pay for a good shopping process just like they pay for good, commercial-free TV. Among new-car shoppers, there is reason to believe the size of this group is growing. CarWoo won't replace your need for listings services and leads providers, but it will send some buyers your way for free. 

    Getting the most out of CarWoo requires a few minutes of pre-work. The call notifying the store of an opportunity often ping pongs around the store and ends up in a voicemail. Without registering one or more contacts with CarWoo, this could easily happen at your store and may have already. Meanwhile, your competitor is communicating an offer that demonstrates they are the right store to buy from. The promptness of their response adds credibility to their claim, and now you are starting off in the hole, if you ever get started. In my view, this is a fantastic opportunity and should not be left to chance. Sign your store up ahead of time with the name and contact information of someone responsible for these opportunities. Here is the link to do that: http://dealers.carwoo.com/dealers/new.

   The Power Information Network is a division of J.D. Power and Associates. Its automated system collects data from roughly 1/3 of all franchised dealers and provides a free reporting tool, PowerDealer, showing both the individual dealer's data and aggregated results from other dealers. PowerDealer is a nice complement to the free Dataium information I wrote about last week. While Dataium is live shopping information, PowerDealer is sales information in near real time. Between the two, you have insight into what is actually being sought and bought.

   Unlike sales reports based on registration data, this information is no more than 24 hours old from the point of sale. This makes the guidebook particularly useful during times of turbulent pricing and fluctuating demand.

   A feature I find helpful for knowing what vehicles to be on the lookout for is the ROI indicator; it combines gross profit and days to turn. If the average retailer cost of a vehicle is $12,000 and its average sales price is $14,000 with an average 30 days to turn, then the dealer could expect to make $2,000 in one month. If this were repeated each month, it would result in a 200% ROI on the $12,000 investment ($2,000 X 12 months = $24,000). Sorting vehicles by ROI is a quick way to identify attractive inventory.

   Another fantastic feature is PowerDealer's ability to plot sales information on a Google map with a variable radius from the store. Franchise sales reports can be seen at four regional levels. It also includes a booking tool backed by current sales data.

   This free tool is not going to replace your vAutos or any other robust market-data tool. It can help your sales managers know whether their expected gross margins line up with benchmarks based on what is actually selling in the same time period.

   I'm told that some dealers still hold back from participating in order to retain anonymity. The 1/3 penetration rate assures that enough dealers are included in the aggregate benchmarks to dismiss that concern in nearly all cases. A fixed-operations module can be added for a fee, but the core product is free to dealers.

   The PowerDealer demo site can be accessed at: https://pinpowerdealer.com

Login: pindemo

Password: pindemo

   The Power Information Network is a division of J.D. Power and Associates. Its automated system collects data from roughly 1/3 of all franchised dealers and provides a free reporting tool, PowerDealer, showing both the individual dealer's data and aggregated results from other dealers. PowerDealer is a nice complement to the free Dataium information I wrote about last week. While Dataium is live shopping information, PowerDealer is sales information in near real time. Between the two, you have insight into what is actually being sought and bought.

   Unlike sales reports based on registration data, this information is no more than 24 hours old from the point of sale. This makes the guidebook particularly useful during times of turbulent pricing and fluctuating demand.

   A feature I find helpful for knowing what vehicles to be on the lookout for is the ROI indicator; it combines gross profit and days to turn. If the average retailer cost of a vehicle is $12,000 and its average sales price is $14,000 with an average 30 days to turn, then the dealer could expect to make $2,000 in one month. If this were repeated each month, it would result in a 200% ROI on the $12,000 investment ($2,000 X 12 months = $24,000). Sorting vehicles by ROI is a quick way to identify attractive inventory.

   Another fantastic feature is PowerDealer's ability to plot sales information on a Google map with a variable radius from the store. Franchise sales reports can be seen at four regional levels. It also includes a booking tool backed by current sales data.

   This free tool is not going to replace your vAutos or any other robust market-data tool. It can help your sales managers know whether their expected gross margins line up with benchmarks based on what is actually selling in the same time period.

   I'm told that some dealers still hold back from participating in order to retain anonymity. The 1/3 penetration rate assures that enough dealers are included in the aggregate benchmarks to dismiss that concern in nearly all cases. A fixed-operations module can be added for a fee, but the core product is free to dealers.

   The PowerDealer demo site can be accessed at: https://pinpowerdealer.com

Login: pindemo

Password: pindemo

The one dominant difference between AutoTrader.com and Cars.com is that AutoTrader.com tiers the listings and Cars.com does not. This distinction has grown over the years as AutoTrader.com gains penetration for its premium product and consumers search across a wider radius.

It is not accurate, in the strictest sense, to say that Cars.com is like being a Premium dealer for every brand, because there are no dealers getting left out. In a market where no dealers purchase the premium package, the Featured version of AutoTrader.com functions similarly to Cars.com. In markets where many dealers purchase the premium package, Cars.com is more similar to the Premium version of AutoTrader.com.

Metro markets tend to have a high concentration of premium dealers because of intense competition. In rural areas, most shoppers expand their search radius beyond the default setting, pushing more Premium dealers into these searches.

There are two ways to compare Cars.com and AutoTrader.com:

1.       Cost per Contact

2.       Cost per Vehicle Details Page (VDP)

Cost per Contact is ideal, but it is difficult and involves lots of assumptions. Is a chat worth as much as a phone call? What is an email worth? What are website transfers worth? Are printable ads and map views a reasonable estimator for walk-in traffic? How does one reconcile the completely different reporting methods of the two companies for these metrics? How much duplication is taking place? Whatever your answers are, they will change over time, as your store's operational performance improves faster in some areas than others.

Cost per VDP is accurate and easy to calculate. A VDP occurs when the shopper selects one of your vehicles to explore further. Few shoppers contact the store without looking at the details of the vehicle, so this is an excellent head-to-head measurement. How many VDPs convert into store contacts depends heavily on the merchandising of the vehicles, which should be from the same feed to either service. On Cars.com's Online Ad Reports, a VDP is titled "People Requesting Details On Your Vehicles." The same metric on AutoTrader.com's reporting tool is titled, "Detail pages viewed for your inventory."

Divide the Cost of the service by the number of VDPs delivered to get the Cost per VDP. This provides a very good comparison of Cars.com to the Featured version of AutoTrader.com. A Premium user on AutoTrader.com could run the same metric the same way to get the average cost per VDP from the service. But buying AutoTrader.com involves two questions: Should I buy the Featured version?, Should I upgrade to Premium? It is best to separate these out, as I pointed out last week.

Every upsell product on Cars.com or AutoTrader.com either creates more VDPs or improves the conversion of VDPs into contacts. If your rep can't show you how the product improves one of these two metrics and help you measure the Cost per VDP or Cost per Contact, then don't buy it until they can. For most dealers, these services provide excellent value, but results vary based on geography, inventory, pricing policy, and store operations. Don't guess at something as important as cost-effective store traffic.

The one dominant difference between AutoTrader.com and Cars.com is that AutoTrader.com tiers the listings and Cars.com does not. This distinction has grown over the years as AutoTrader.com gains penetration for its premium product and consumers search across a wider radius.

It is not accurate, in the strictest sense, to say that Cars.com is like being a Premium dealer for every brand, because there are no dealers getting left out. In a market where no dealers purchase the premium package, the Featured version of AutoTrader.com functions similarly to Cars.com. In markets where many dealers purchase the premium package, Cars.com is more similar to the Premium version of AutoTrader.com.

Metro markets tend to have a high concentration of premium dealers because of intense competition. In rural areas, most shoppers expand their search radius beyond the default setting, pushing more Premium dealers into these searches.

There are two ways to compare Cars.com and AutoTrader.com:

1.       Cost per Contact

2.       Cost per Vehicle Details Page (VDP)

Cost per Contact is ideal, but it is difficult and involves lots of assumptions. Is a chat worth as much as a phone call? What is an email worth? What are website transfers worth? Are printable ads and map views a reasonable estimator for walk-in traffic? How does one reconcile the completely different reporting methods of the two companies for these metrics? How much duplication is taking place? Whatever your answers are, they will change over time, as your store's operational performance improves faster in some areas than others.

Cost per VDP is accurate and easy to calculate. A VDP occurs when the shopper selects one of your vehicles to explore further. Few shoppers contact the store without looking at the details of the vehicle, so this is an excellent head-to-head measurement. How many VDPs convert into store contacts depends heavily on the merchandising of the vehicles, which should be from the same feed to either service. On Cars.com's Online Ad Reports, a VDP is titled "People Requesting Details On Your Vehicles." The same metric on AutoTrader.com's reporting tool is titled, "Detail pages viewed for your inventory."

Divide the Cost of the service by the number of VDPs delivered to get the Cost per VDP. This provides a very good comparison of Cars.com to the Featured version of AutoTrader.com. A Premium user on AutoTrader.com could run the same metric the same way to get the average cost per VDP from the service. But buying AutoTrader.com involves two questions: Should I buy the Featured version?, Should I upgrade to Premium? It is best to separate these out, as I pointed out last week.

Every upsell product on Cars.com or AutoTrader.com either creates more VDPs or improves the conversion of VDPs into contacts. If your rep can't show you how the product improves one of these two metrics and help you measure the Cost per VDP or Cost per Contact, then don't buy it until they can. For most dealers, these services provide excellent value, but results vary based on geography, inventory, pricing policy, and store operations. Don't guess at something as important as cost-effective store traffic.