Hint: It involves implementing a digital retailing strategy with messaging woven into it. And we’ve got a guide to help you make it work. SEE HOW
You may have never heard of CPS, and I know this because it is an acronym that I just started trending out over the last 6 months that can justify why your traffic on sites like Autotrader and cars.com could be off or maybe performing better than usual.
CPS stands for Cars Per Shopper and its a number that we have been tracking weekly looking at the amount of shoppers on Autotrader divided by the amount of total cars listing that given week, we even break it down to new and used vehicles listed. This number is driving dealerships SRPs (search result pages) and it’s a number that you would want to know when you are deciding how many vehicles should you be carrying, how aggressive you should price your cars, and help your decisions on packaging and spotlight exposure with Autotrader.
Here is how it works, let’s say you have 20,000 local shoppers last week and there were 20,000 total cars listed on Autotrader that same week, well then you would have 1 car per shopper for a 1 to 1 ratio. Now let’s take it to the extreme and say the next week you had 20,000 shoppers again but now there are 40,000 vehicles listed on Autotrader and now there are 2 cars per shopper. That’s a huge change in the market and you now have twice the amount of cars you are competing against to the same amount of shoppers. That means it’s a buyers’ market now and you will need to get more exposure on your vehicles (maybe upgrade packaging, spotlight more cars) and get more aggressive with pricing your inventory. But let’s say it goes the other way and you have 20,000 shoppers for 10,000 vehicles listed so you have 0.5 cars per shopper and it becomes more of a sellers’ market and you may not have to price as aggressive to get exposure.
I have had a lot of conversations over the years with dealerships who were wondering why their used car traffic was dropping but they didn’t really change anything with their inventory. They were carrying the same amount of cars, photos and descriptions were good and the inventory was getting on line in a timely fashion but traffic was way down. I really didn’t have any explanation for the drop other than to have the dealer check with their local AT can Cars.com reps to see if traffic was down. But now by tracking CPS we have been seeing dealerships SRPs drop off because there have been less customers in the market shopping and more used vehicles listed for sale. One dealer had a 10% drop in shoppers and an increase of 10% more cars available for sale and in that same time period there was a 9% drop in their SRPs. We also had a dealer have the same amount of shopper’s week in and week out but there was an increase of 20% more used cars listed for sale in their market. Not only did they have that going against them but their own inventory count dropped by 20% and their SRPs dropped over 25%. The way out of this is getting their inventory count back up, get them listed as soon as possible to drive the SRPs back up, but also get more aggressive with their pricing to drive the VDPs up because they have more cars to compete against.
You can track your CPS numbers by taking your weekly “Tune Up” report from Autotrader and see how your market is doing or give me a call or email and I can help you get a look at what is going on with your numbers.