One reason I left the automotive internet research business in 2006 was the proliferation of online research by amateurs loaded with newfound data. Data has never been cheaper or more abundant, but turning data into useful information still requires care. Most industry publications are understaffed and are not in a position to weed out the garbage from the actual research findings dealers need to hear. The consequence is that even the most ridiculous hypothesis is supported by someone's tortured data.

     Research based conclusions regarding retail marketing bounce back and forth like diet information. Just as consumers are baffled about whether things like chocolate, wine, and eggs are healthy in moderation or always to be avoided, dealers are left with lots of claims carrying little credibility.

     It's hard to separate the facts from the fads. What percentage of shoppers really wants to negotiate price? Does this differ by market, buy vehicle segment, or by demographics? Do women prefer fixed pricing more than men do?  Do they value warranties more? These are important questions that have been publicly trampled with conclusions backed by very questionable data and analysis.

     Vendors have taken such a careless approach with data that the act of publishing non-sense has spilled over into some dealer conversations. Closing rate, or any other ratio, doesn't mean a thing unless both the numerator and denominator mean what you think they do. Averages don't accurately describe one-tailed distributions. Large sample sizes don't make up for sampling bias.

     Regardless of intentions, some of what dealers are being fed is flat-out misinformation. Dealers need to be careful about how much weight they give to information from vendors who are not in the business of providing sound information. Vendors seeking credibility for their findings should provide greater transparency into their research methodology.

     One reason I left the automotive internet research business in 2006 was the proliferation of online research by amateurs loaded with newfound data. Data has never been cheaper or more abundant, but turning data into useful information still requires care. Most industry publications are understaffed and are not in a position to weed out the garbage from the actual research findings dealers need to hear. The consequence is that even the most ridiculous hypothesis is supported by someone's tortured data.

     Research based conclusions regarding retail marketing bounce back and forth like diet information. Just as consumers are baffled about whether things like chocolate, wine, and eggs are healthy in moderation or always to be avoided, dealers are left with lots of claims carrying little credibility.

     It's hard to separate the facts from the fads. What percentage of shoppers really wants to negotiate price? Does this differ by market, buy vehicle segment, or by demographics? Do women prefer fixed pricing more than men do?  Do they value warranties more? These are important questions that have been publicly trampled with conclusions backed by very questionable data and analysis.

     Vendors have taken such a careless approach with data that the act of publishing non-sense has spilled over into some dealer conversations. Closing rate, or any other ratio, doesn't mean a thing unless both the numerator and denominator mean what you think they do. Averages don't accurately describe one-tailed distributions. Large sample sizes don't make up for sampling bias.

     Regardless of intentions, some of what dealers are being fed is flat-out misinformation. Dealers need to be careful about how much weight they give to information from vendors who are not in the business of providing sound information. Vendors seeking credibility for their findings should provide greater transparency into their research methodology.

   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.

                One of the tough decisions in automotive marketing is whether or not to go premium with AutoTrader.com. However, knowing whether or not it pays off is not a matter of guesswork. By going from featured listings to premium, your inventory will be included on more Search Results Pages (SRPs). Under the reporting tab of Dealers.AutoTrader.com, this is found in the Executive Summary as "Times your vehicles were seen in a search."

                More SRPs leads to more shoppers selecting your inventory, measured as Vehicle Details Pages (VDPs). This can be found in the same report as "Detail pages viewed for your inventory."

The value of going to premium status can best be measured as the margin cost per VDP. Calculate the additional amount you are paying AutoTrader.com to go from featured to premium status, then divide this dollar amount by the change in the number of VDPs. Generally speaking, we are looking for a marginal cost per VDP of less than $1.

                The $1 per VDP benchmark assumes market pricing, good merchandising, and good lead handling. It also assumes a marginal cost per vehicle sold of $400 is tolerable. Adjustments must be made when these assumptions are not valid. For thousands of dealerships, store operations are so poor that even a marginal cost per VDP of less than $1 is still not cost effective. Generally speaking, these stores should get their house in order before expanding their advertising.

                It is important to evaluate the change to premium status using marginal cost per VDP, rather than average cost per VDP. Chances are your average cost for featured listings is lower than $1. The fact is AutoTrader.com and Cars.com make sense for most dealers. However, the marginal cost for going to premium status is almost always more expensive on a cost per VDP basis.

                In later posts, I'll explain why aggressive market pricing, outstanding merchandising, and the best possible lead handling can make it possible for dealers to gain substantial profits at a marginal cost of more than $1 per VDP. I'll write about other ways to measure the value of listing services. And yes, I'll also write about Cars.com.

                One of the tough decisions in automotive marketing is whether or not to go premium with AutoTrader.com. However, knowing whether or not it pays off is not a matter of guesswork. By going from featured listings to premium, your inventory will be included on more Search Results Pages (SRPs). Under the reporting tab of Dealers.AutoTrader.com, this is found in the Executive Summary as "Times your vehicles were seen in a search."

                More SRPs leads to more shoppers selecting your inventory, measured as Vehicle Details Pages (VDPs). This can be found in the same report as "Detail pages viewed for your inventory."

The value of going to premium status can best be measured as the margin cost per VDP. Calculate the additional amount you are paying AutoTrader.com to go from featured to premium status, then divide this dollar amount by the change in the number of VDPs. Generally speaking, we are looking for a marginal cost per VDP of less than $1.

                The $1 per VDP benchmark assumes market pricing, good merchandising, and good lead handling. It also assumes a marginal cost per vehicle sold of $400 is tolerable. Adjustments must be made when these assumptions are not valid. For thousands of dealerships, store operations are so poor that even a marginal cost per VDP of less than $1 is still not cost effective. Generally speaking, these stores should get their house in order before expanding their advertising.

                It is important to evaluate the change to premium status using marginal cost per VDP, rather than average cost per VDP. Chances are your average cost for featured listings is lower than $1. The fact is AutoTrader.com and Cars.com make sense for most dealers. However, the marginal cost for going to premium status is almost always more expensive on a cost per VDP basis.

                In later posts, I'll explain why aggressive market pricing, outstanding merchandising, and the best possible lead handling can make it possible for dealers to gain substantial profits at a marginal cost of more than $1 per VDP. I'll write about other ways to measure the value of listing services. And yes, I'll also write about Cars.com.

This is the first in my series of Friday Freebies, highlighting products available for dealers or salespeople at no cost. Others are welcome to add comments – positive or negative – regarding how they make money with the same opportunity or found it not worth their time and effort.

CarFolks is designed to be a dealer-friendly rating service. Individual sales people can sign up on CarFolks at no cost, whether their dealership has elected to buy into the system or not. In other words, every salesperson in the store can use the product for free, even if the store itself does not pay to participate.

Progressive salespeople are sending their customers to CarFolks and asking them for a positive rating, even comments. They then link to this information in their social media and email lead responses.

Increasingly, shoppers consider two or more vehicles of roughly the same value. They may be considering a new car and several used vehicles, but to them the value appears to be about the same. Often, the sale goes to the salesperson who can best demonstrate they are the right salesperson, and their store is the right organization to buy from. In these instances of value parity, ratings and testimonials from an independent third-party can prove to be powerful documentation.

With millions of vehicles listed on any number of automotive websites, instances of value parity are far more common than they once were. With the widespread adoption of tools like vAuto and FirstLook encouraging market pricing, it will become increasingly common in the future.

My recommendation is to print out your CarFolks profile and keep it in a folder with other documentation about you and your store. Consumer comments found on an independent site like CarFolks carry more weight than the same comments on your website or in your store. Have your profile in the favorites of your computer or know how to get to it quickly. Every deal has a deal jacket demonstrating the full value of the vehicle. That's not always enough. Every salesperson should have a folder full of credible evidence showing they are the right person and the right store to buy from. If you are worth enough to tip the scales on a buyer's decision, back it up with documentation.

If you know of a freebie to dealers or salespeople you'd like me to write about, just send me a note through DrivingSales.com or directly at DennisGalbraith@msn.com. Your link to this week's freebie is http://carfolks.com/join.

This is the first in my series of Friday Freebies, highlighting products available for dealers or salespeople at no cost. Others are welcome to add comments – positive or negative – regarding how they make money with the same opportunity or found it not worth their time and effort.

CarFolks is designed to be a dealer-friendly rating service. Individual sales people can sign up on CarFolks at no cost, whether their dealership has elected to buy into the system or not. In other words, every salesperson in the store can use the product for free, even if the store itself does not pay to participate.

Progressive salespeople are sending their customers to CarFolks and asking them for a positive rating, even comments. They then link to this information in their social media and email lead responses.

Increasingly, shoppers consider two or more vehicles of roughly the same value. They may be considering a new car and several used vehicles, but to them the value appears to be about the same. Often, the sale goes to the salesperson who can best demonstrate they are the right salesperson, and their store is the right organization to buy from. In these instances of value parity, ratings and testimonials from an independent third-party can prove to be powerful documentation.

With millions of vehicles listed on any number of automotive websites, instances of value parity are far more common than they once were. With the widespread adoption of tools like vAuto and FirstLook encouraging market pricing, it will become increasingly common in the future.

My recommendation is to print out your CarFolks profile and keep it in a folder with other documentation about you and your store. Consumer comments found on an independent site like CarFolks carry more weight than the same comments on your website or in your store. Have your profile in the favorites of your computer or know how to get to it quickly. Every deal has a deal jacket demonstrating the full value of the vehicle. That's not always enough. Every salesperson should have a folder full of credible evidence showing they are the right person and the right store to buy from. If you are worth enough to tip the scales on a buyer's decision, back it up with documentation.

If you know of a freebie to dealers or salespeople you'd like me to write about, just send me a note through DrivingSales.com or directly at DennisGalbraith@msn.com. Your link to this week's freebie is http://carfolks.com/join.