Here is a way the dealer body can effect and manipulate the default listing order of high to low by price on sites like Autotrader and Cars.com. As you probably know, Autotrader and Cars.com default listing of vehicles in a search result page are sorted by highest price to lowest price (other than the packages that Autotrader offer like premium listings). I have been told by their reps that one of the reasons they do this is if they were to list the vehicles low to high based on price then consumers wouldn't have any reason to look past the first couple of pages. That makes sense for their marketing purposes but I believe dealers and consumers would benefit if they were listed a better way.
One of the ways I believe the default order should be is by listing them nearest to the zip that the customer puts in. Both the consumer and the dealers would benefit by this order and I believe these site would get more buy in from the dealerships and here is why. If I am a dealer and I know that if a customer does a search in my direct market and my cars would show up before competitors in other markets, I would believe these sites would benefit me more. And from a consumer perspective, I would love to be able to see local offers on vehicles before I have to travel too far to get a good deal on a car I am shopping for I would more than likely give them a chance. Another way a default sort order would benefit the dealers and consumer would be by odometer. If the dealer, or consumer is comparing similar vehicles that have the same equipment or options then the mileage of the vehicles will be the next driving factor on which on is a better deal. If I am a dealer with nice low mileage vehicles I would want the consumer to see my vehicles first, or if I am a consumer looking at vehicles that are in the same price point or make/model search, then mileage would be the next thing to consider.

The dealer body (the reason I am saying dealer body, is that the fact that the more dealers that do this strategy the better it will work) can manipulate the high to low price default by pricing their vehicles at a Flat Price. And what I mean by Flat Price, is to price their vehicles at a flat number like $18,000 instead of $17,998 and here is why:

1. Autotraders next default, if the price is the same, is by putting the vehicles in order by the dealership closest to the zip code that the customer put in. So for example, if there are 10 cars on a SRP page that have the same price of $18,000 then Autotrader can’t put them in price order so the next default setting is to put them in order by the dealership closest to the zip. Click HERE to see it in action, notice all the $18000 vehicles then notice the miles from zip order.
2. Cars.com’s next default, if the price is the same, is by putting the vehicles in order by the vehicle that has the lowest miles. So for example if there are 20 cars all price at $20,000 cars.com can’t put them in order by price so the next default setting is to put them in order by the cars that have the lowest mileage first. Click HERE to see it in action, notice the mileage of all the vehicles priced at $20,000.

The more dealers that price their cars at a flat number like, $10,000, $15,000 and so on the more the dealer body can manipulate how these sites put in order to cars listed for sale. These two ways of listing vehicles, 1. By closest to the zip and/or 2. By lowest mileage are the 2 best ways that the customer and dealership benefit from because it’s a win win for the dealers and the consumers.

There are tons of other reasons why you want to Flat Price a vehicle. I would never price a vehicle at $19995 again. 

Here is a way the dealer body can effect and manipulate the default listing order of high to low by price on sites like Autotrader and Cars.com. As you probably know, Autotrader and Cars.com default listing of vehicles in a search result page are sorted by highest price to lowest price (other than the packages that Autotrader offer like premium listings). I have been told by their reps that one of the reasons they do this is if they were to list the vehicles low to high based on price then consumers wouldn't have any reason to look past the first couple of pages. That makes sense for their marketing purposes but I believe dealers and consumers would benefit if they were listed a better way.
One of the ways I believe the default order should be is by listing them nearest to the zip that the customer puts in. Both the consumer and the dealers would benefit by this order and I believe these site would get more buy in from the dealerships and here is why. If I am a dealer and I know that if a customer does a search in my direct market and my cars would show up before competitors in other markets, I would believe these sites would benefit me more. And from a consumer perspective, I would love to be able to see local offers on vehicles before I have to travel too far to get a good deal on a car I am shopping for I would more than likely give them a chance. Another way a default sort order would benefit the dealers and consumer would be by odometer. If the dealer, or consumer is comparing similar vehicles that have the same equipment or options then the mileage of the vehicles will be the next driving factor on which on is a better deal. If I am a dealer with nice low mileage vehicles I would want the consumer to see my vehicles first, or if I am a consumer looking at vehicles that are in the same price point or make/model search, then mileage would be the next thing to consider.

The dealer body (the reason I am saying dealer body, is that the fact that the more dealers that do this strategy the better it will work) can manipulate the high to low price default by pricing their vehicles at a Flat Price. And what I mean by Flat Price, is to price their vehicles at a flat number like $18,000 instead of $17,998 and here is why:

1. Autotraders next default, if the price is the same, is by putting the vehicles in order by the dealership closest to the zip code that the customer put in. So for example, if there are 10 cars on a SRP page that have the same price of $18,000 then Autotrader can’t put them in price order so the next default setting is to put them in order by the dealership closest to the zip. Click HERE to see it in action, notice all the $18000 vehicles then notice the miles from zip order.
2. Cars.com’s next default, if the price is the same, is by putting the vehicles in order by the vehicle that has the lowest miles. So for example if there are 20 cars all price at $20,000 cars.com can’t put them in order by price so the next default setting is to put them in order by the cars that have the lowest mileage first. Click HERE to see it in action, notice the mileage of all the vehicles priced at $20,000.

The more dealers that price their cars at a flat number like, $10,000, $15,000 and so on the more the dealer body can manipulate how these sites put in order to cars listed for sale. These two ways of listing vehicles, 1. By closest to the zip and/or 2. By lowest mileage are the 2 best ways that the customer and dealership benefit from because it’s a win win for the dealers and the consumers.

There are tons of other reasons why you want to Flat Price a vehicle. I would never price a vehicle at $19995 again. 

If you, your dealership or your vehicles, are not the first thing that comes to mind when a consumer is shopping for a car, service, parts....you better be the first thing that they see when they search, "if you are not first in mind you better be first in line". I could talk about SEM/SEO or VDP's right now but I want to cover SRP's, or search results pages because there is so much talk right now about VDP's but if you don't show up in a search, you can forget about the VDP. 

When consumers are searching for vehicles they are going to use multiple resources to shop for their cars and one major one is going to be the Internet. While researching online they will be visiting multiple sites and each site has a unique way to list, sort and search for particular vehicles. The problem is, you just don't know what website they end up on and what ways they might search for to finally stumble upon your vehicle. Some sites have the ability to select certain options or features to narrow their list of vehicles down, some others may allow the customer to type whatever they want to narrow down their search. Some sites have a drop down to choose price points and others may allow the customer to type in their price range. If your vehicle does not fit into their search parameters your vehicle will not get the SRP needed to drive up your VDPs. So how do you increase your SRPs to make sure that no matter how the customer searches, by make/model, price point and or options? I will give you a few pointers:

1. Stop using manufacture terms or car talk terms for your options. What I mean by that is just because Lexus calls it a moonroof, the customer may be on a site looking for a sunroof and your car does not show up. More on that later...
2. Start flat pricing your vehicles, especially if you have a car that not too many people are looking for. What I mean by that is to price your car at $15,000 instead of $14,995 especially if its a vehicle like a Mercury Mountaineer. There are more people shopping for a $15000 SUV then there are people shopping for a Mountaineer and so if the customer is shopping for a $15000-$18000 SUV you will miss that search if you are priced at $14995
3. "Meta tag" your comments. What I mean by that is that you need to think of any way a customer my search for a vehicle, by options, on any particular site and put those terms into your descriptions. If you are going to use "7 passenger" in your comments you better include "3rd row seat" somewhere in your comments also. If you are going to use "GPS" in your comment you better included "navigation" also. If you are going to put "rear entertainment" in your descriptions you better include "DVD player" somewhere in your descriptions. You don't know if the customer is looking for a GPS but if your descriptions list it as a navigation or navi, you do not show up in that search on most sites, if they look for a DVD player and you have rear entertainment, guess what, your car won't show up.

So in order to be one of the vehicles first in line on the SRP page, to get that valuable VDP, you better maximize your pricing and comment strategy to make sure your car is at the top of the list because you and your car probably were not the first thing that came to mind when they started searching.

Check out my webinar that goes over how to enhance both your pricing and comments to get a huge increase in SRP's at www.automotiverevolution.com 

If you, your dealership or your vehicles, are not the first thing that comes to mind when a consumer is shopping for a car, service, parts....you better be the first thing that they see when they search, "if you are not first in mind you better be first in line". I could talk about SEM/SEO or VDP's right now but I want to cover SRP's, or search results pages because there is so much talk right now about VDP's but if you don't show up in a search, you can forget about the VDP. 

When consumers are searching for vehicles they are going to use multiple resources to shop for their cars and one major one is going to be the Internet. While researching online they will be visiting multiple sites and each site has a unique way to list, sort and search for particular vehicles. The problem is, you just don't know what website they end up on and what ways they might search for to finally stumble upon your vehicle. Some sites have the ability to select certain options or features to narrow their list of vehicles down, some others may allow the customer to type whatever they want to narrow down their search. Some sites have a drop down to choose price points and others may allow the customer to type in their price range. If your vehicle does not fit into their search parameters your vehicle will not get the SRP needed to drive up your VDPs. So how do you increase your SRPs to make sure that no matter how the customer searches, by make/model, price point and or options? I will give you a few pointers:

1. Stop using manufacture terms or car talk terms for your options. What I mean by that is just because Lexus calls it a moonroof, the customer may be on a site looking for a sunroof and your car does not show up. More on that later...
2. Start flat pricing your vehicles, especially if you have a car that not too many people are looking for. What I mean by that is to price your car at $15,000 instead of $14,995 especially if its a vehicle like a Mercury Mountaineer. There are more people shopping for a $15000 SUV then there are people shopping for a Mountaineer and so if the customer is shopping for a $15000-$18000 SUV you will miss that search if you are priced at $14995
3. "Meta tag" your comments. What I mean by that is that you need to think of any way a customer my search for a vehicle, by options, on any particular site and put those terms into your descriptions. If you are going to use "7 passenger" in your comments you better include "3rd row seat" somewhere in your comments also. If you are going to use "GPS" in your comment you better included "navigation" also. If you are going to put "rear entertainment" in your descriptions you better include "DVD player" somewhere in your descriptions. You don't know if the customer is looking for a GPS but if your descriptions list it as a navigation or navi, you do not show up in that search on most sites, if they look for a DVD player and you have rear entertainment, guess what, your car won't show up.

So in order to be one of the vehicles first in line on the SRP page, to get that valuable VDP, you better maximize your pricing and comment strategy to make sure your car is at the top of the list because you and your car probably were not the first thing that came to mind when they started searching.

Check out my webinar that goes over how to enhance both your pricing and comments to get a huge increase in SRP's at www.automotiverevolution.com 

How many dealers are running to the auctions to buy 2011 Mitsubishi Endeavor LS's or 2009 Kia Borrego EX's or even 2013 Kia Rio EX's or other cars like these? 
Matter of fact, how many customers are running to the internet to do searches for these particular cars?
Well I am going to tell you why you might want to be hunting some of these and others like them down. 
This is going to go against most stats and stocking strategies that are being promoted in the industry right now but hear me out. The cars I listed above have little demand on the internet when looking at Autotader search stats, matter of fact the 2011 Mitsubishi Endeavor scores a D grade (on an A to F grading system) for market "Demand" in vAuto's Provision scoring tool. It gets a D grade because its in the 24 percentile when compared to other vehicles in the Kansas City market. That means on Autotrader there are 76% more cars been searched for than a 2011 Mitsubishi Endeavor so not many people at all are running to the internet looking for this year, make, model. The 2009 Kia Borrego also scores a D grade for Demand in vAuto because of its 24 percentile ranking and the 2013 Kia Rio gets a C- because it is in the 32 percentile of searches being done on Autotrader. 
So why would I tell you that you might want to stock some cars like these when no one is searching for these year, make and models? Because there are a lot of segment and price shoppers in the market and these cars do very well for those types of shoppers. 
How many times have you talked to a customer that says they are interested a particular vehicle on your lot, but once talking to them they are really just looking for a nice $15000-$18000 SUV, or what have you? These cars are for those shoppers, the ones hitting the internet doing searches for their perfect $15000-$18000 SUV, or sedan or .....(enter price point, segment). So they may have never of thought to do a search for a 2011 Mitsubishi Endeavor LS (hence the low demand score) but once that vehicle shows up in their SUV search, all of a sudden that is an attractive vehicle and they click on it (getting you that most sought after thing...the VDP). This particular vehicle in the Kansas City market has an average retail price of $15900 with and average of 42000 miles, that is a lot of SUV for the money. The reason I know this car gets VDP's is because it is converting SRP's to VDP's at a 5.12% which is about twice the rate of the average car on Autotrader. So how does it get the SRP, if no one is looking for that year, make, model? Its because it is showing up in SUV searches, once it shows up, it is getting clicked. Now you can say, "just because it is getting clicked doesn't mean it will sell" but I would argue that fact. Because again, in vAuto I can see that it gets a Days Supply grade of a B because this 2011 Mitsubishi Endeavor LS has a 62 days supply (which is about or a little above average) and it also scores a B- grade in Volume because 8 of them have sold in the last 45 days.
Just so you know, the 2009 Kia Borrego EX has a A- interest grade at 4.36% a A- for Days Supply at 45 days and a B- for volume because 7 sold in the last 45 days and the Rio is about the same. 
The next thing you would want to do with these type of cars is to check out their reviews, an odd car with a bad review will kill your inventory (not to many used car managers considering reviews of cars when they stock..more on that in another article). So guess what, that 2011 Endeavor and the 2009 Borrego both score 4.7 stars out of 5 on edmunds.com, the 2013 Rio has a 8.3 out of 10 rating on USNews and is ranked #6 out of 41 in affordable small cars. Use this information when marketing these cars but also make sure you flat price these cars, which means price them at a flat number like $15000 instead of $14999 so you show up in more SUV price point searches. If you price this Endeavor at $14999 and someone does a search for a $15000-$18000 SUV, you will miss that search by $1 and will defeat the purpose of buying this type of car. You can get more on the flat pricing strategy on one of my other postings, click HERE to read.
Some more vehicles that I would consider as "odd" type cars for example would be:
-Suzuki XL7's
-Lincoln MKT's
-Mercury Mountaineers
-Kia Forte Koup
-Subaru Tribeca
-Scion xA 
-Lincoln Aviator (in one market I seen this vehicle in a 2005 AWD model, show a low demand but 4% VDP, 57 days supply and 53 sell in 45 days) again, its a total price point car.
-there are a bunch of others but here is a few

One last note, like I said at the beginning, not too many used car managers or buyers are running to the auction with these vehicles in mind and on their HOT list so that should make it a little easier to acquire these types of vehicles for a good price. Every buyer is at the lane looking for those cars with HIGH demand scores or the ones at the top of Autotrader and Cars.com "searched for" list, but I would want to also be stocking some of the cars no one is thinking of looking for but end up clicking on and buying because of segment and price point. Thats how you gain market share and get a head of the game!!!

*I am not telling you to go buy a ton of these cars and replace your hot products, but I am encouraging you to take a deeper look at these "odd" cars and carry a half of dozen or so depending on the size of your lot. But only do it, if you are going to market them the right way!

How many dealers are running to the auctions to buy 2011 Mitsubishi Endeavor LS's or 2009 Kia Borrego EX's or even 2013 Kia Rio EX's or other cars like these? 
Matter of fact, how many customers are running to the internet to do searches for these particular cars?
Well I am going to tell you why you might want to be hunting some of these and others like them down. 
This is going to go against most stats and stocking strategies that are being promoted in the industry right now but hear me out. The cars I listed above have little demand on the internet when looking at Autotader search stats, matter of fact the 2011 Mitsubishi Endeavor scores a D grade (on an A to F grading system) for market "Demand" in vAuto's Provision scoring tool. It gets a D grade because its in the 24 percentile when compared to other vehicles in the Kansas City market. That means on Autotrader there are 76% more cars been searched for than a 2011 Mitsubishi Endeavor so not many people at all are running to the internet looking for this year, make, model. The 2009 Kia Borrego also scores a D grade for Demand in vAuto because of its 24 percentile ranking and the 2013 Kia Rio gets a C- because it is in the 32 percentile of searches being done on Autotrader. 
So why would I tell you that you might want to stock some cars like these when no one is searching for these year, make and models? Because there are a lot of segment and price shoppers in the market and these cars do very well for those types of shoppers. 
How many times have you talked to a customer that says they are interested a particular vehicle on your lot, but once talking to them they are really just looking for a nice $15000-$18000 SUV, or what have you? These cars are for those shoppers, the ones hitting the internet doing searches for their perfect $15000-$18000 SUV, or sedan or .....(enter price point, segment). So they may have never of thought to do a search for a 2011 Mitsubishi Endeavor LS (hence the low demand score) but once that vehicle shows up in their SUV search, all of a sudden that is an attractive vehicle and they click on it (getting you that most sought after thing...the VDP). This particular vehicle in the Kansas City market has an average retail price of $15900 with and average of 42000 miles, that is a lot of SUV for the money. The reason I know this car gets VDP's is because it is converting SRP's to VDP's at a 5.12% which is about twice the rate of the average car on Autotrader. So how does it get the SRP, if no one is looking for that year, make, model? Its because it is showing up in SUV searches, once it shows up, it is getting clicked. Now you can say, "just because it is getting clicked doesn't mean it will sell" but I would argue that fact. Because again, in vAuto I can see that it gets a Days Supply grade of a B because this 2011 Mitsubishi Endeavor LS has a 62 days supply (which is about or a little above average) and it also scores a B- grade in Volume because 8 of them have sold in the last 45 days.
Just so you know, the 2009 Kia Borrego EX has a A- interest grade at 4.36% a A- for Days Supply at 45 days and a B- for volume because 7 sold in the last 45 days and the Rio is about the same. 
The next thing you would want to do with these type of cars is to check out their reviews, an odd car with a bad review will kill your inventory (not to many used car managers considering reviews of cars when they stock..more on that in another article). So guess what, that 2011 Endeavor and the 2009 Borrego both score 4.7 stars out of 5 on edmunds.com, the 2013 Rio has a 8.3 out of 10 rating on USNews and is ranked #6 out of 41 in affordable small cars. Use this information when marketing these cars but also make sure you flat price these cars, which means price them at a flat number like $15000 instead of $14999 so you show up in more SUV price point searches. If you price this Endeavor at $14999 and someone does a search for a $15000-$18000 SUV, you will miss that search by $1 and will defeat the purpose of buying this type of car. You can get more on the flat pricing strategy on one of my other postings, click HERE to read.
Some more vehicles that I would consider as "odd" type cars for example would be:
-Suzuki XL7's
-Lincoln MKT's
-Mercury Mountaineers
-Kia Forte Koup
-Subaru Tribeca
-Scion xA 
-Lincoln Aviator (in one market I seen this vehicle in a 2005 AWD model, show a low demand but 4% VDP, 57 days supply and 53 sell in 45 days) again, its a total price point car.
-there are a bunch of others but here is a few

One last note, like I said at the beginning, not too many used car managers or buyers are running to the auction with these vehicles in mind and on their HOT list so that should make it a little easier to acquire these types of vehicles for a good price. Every buyer is at the lane looking for those cars with HIGH demand scores or the ones at the top of Autotrader and Cars.com "searched for" list, but I would want to also be stocking some of the cars no one is thinking of looking for but end up clicking on and buying because of segment and price point. Thats how you gain market share and get a head of the game!!!

*I am not telling you to go buy a ton of these cars and replace your hot products, but I am encouraging you to take a deeper look at these "odd" cars and carry a half of dozen or so depending on the size of your lot. But only do it, if you are going to market them the right way!

When we talk about getting more exposure on your vehicles by enhancing your descriptions to include the options and features of the vehicle, no one is talking about specifics. 
Look at the listing in this article, their description looks great, they talk about one owner, no accidents, has equipment like leather, reverse sensing AND the "MOON & TUNE" package. All that is great except 1. not too many people run to the internet looking for a Mercury Mariner, but they probably will go to the internet, look for an SUV and they may narrow their search down to ones with "SUNROOF" if that is an option they are looking for. That is where the problem begins, this vehicle will NOT show up in an SUV with SUNROOF search because they described the feature as a "MOON AND TUNE" feature. Lets look at it from another search that a customer may do, they might go to a site like craigslist.com and do a search for 4WD vehicle or a 4 wheel drive vehicle, and again, this vehicle will not show up in that search on craigslist because the dealership describes it having 4X4...
WATCH THE 5 MINUTE VIDEO BELOW TO SEE THIS IN ACTION

 

When we talk about getting more exposure on your vehicles by enhancing your descriptions to include the options and features of the vehicle, no one is talking about specifics. 
Look at the listing in this article, their description looks great, they talk about one owner, no accidents, has equipment like leather, reverse sensing AND the "MOON & TUNE" package. All that is great except 1. not too many people run to the internet looking for a Mercury Mariner, but they probably will go to the internet, look for an SUV and they may narrow their search down to ones with "SUNROOF" if that is an option they are looking for. That is where the problem begins, this vehicle will NOT show up in an SUV with SUNROOF search because they described the feature as a "MOON AND TUNE" feature. Lets look at it from another search that a customer may do, they might go to a site like craigslist.com and do a search for 4WD vehicle or a 4 wheel drive vehicle, and again, this vehicle will not show up in that search on craigslist because the dealership describes it having 4X4...
WATCH THE 5 MINUTE VIDEO BELOW TO SEE THIS IN ACTION

 

While working with one of my clients covering a strategy on changing the price of a vehicle he had priced at $15,298, my first reaction was to tell him to reduce it down to $14,995 so he wouldn’t miss any searches done up to $15,000 because of his $298. Then it dawned on me, don’t even change it to $14,995 that might not work either. After the conversation, I come across a strategy that has changed the way I tell my dealers how to price a lot of their cars. It made me research all pricing strategies and how this type of pricing started in the car business.

Pricing a vehicle at $19995, $14998, or $9997 is a strategy that marketing experts call Physiological Pricing strategy.

How it Works
“A psychological pricing strategy works by selecting prices to which consumers will have an emotional reaction. For example, a car might be priced at $14,995 rather than at $15,000. A completely rational consumer would recognize that a price difference of $5 is negligible on a big ticket item such as a car. In reality, however, consumers do not tend to behave in such a rational manner, but will tend to act emotionally and round down prices.

Although the price of the car is closer to $15,000, many consumers will tend to think of it in the $14,000 range.” What Is a Psychological Pricing Strategy?By Wendel Clark, eHow Contributor updated June 30, 2011

We do this so when a consumer sees our ad, $14,995 looks smaller than $15,000 and they may mentally round it down to $14000 range, but that is if and only IF they actually see your ad. This strategy goes way back over hundred years and it is an effective strategy for traditional advertising. I would say though, for a lot of used cars on your lot, this is NOT the strategy I would carry over to today’s market.

When you think about it, we have changed almost every aspect of used car management because of the Internet, every aspect except Psychological Pricing.  Not changing from this pricing strategy is costing your vehicles search results (SRP’s) on sites like Autotrader/Edmunds.com, Craigslist, KBB.com, some dealerships websites and a lot of certified websites. It is also causing your vehicle to not get the vehicle detail page views (VDP’s) that it deserves because we are positioning them into pricing buckets that make them less appealing.

Let’s say you take a sedan from a price of $15,495 to a price of $14,995 to help move the car off of your lot and to get it more exposure online. But all you might have done is just moved that car from one price bucket into another price bucket and not increased its search results at all.
Here is why: if you have 500 customers shopping for a sedan in a price band of $12,000 to $15,000 and then you have 500 customers shopping for a sedan between $15,000 to $18,000 all you did is move the sedan from one price bucket to the other and you broke even in search results and didn’t get any more exposure on the car.

You need to get away from Psychological Pricing and price your sedan at $15,000!!! By pricing it at $15,000 you will double the opportunity for your vehicle to showing up in searches.  By staying with traditional pricing of $14,995, you will miss the opportunity of any search done $15,000 and up because of $5. Let’s face it; Craigslist is not the easiest of sites to shop for a vehicle. If you have ever shopped on Craigslist before, searching by price is the most effective to find what you are looking for, unless you know the exact model of car you are looking for, and if you price yours at $14995 instead of $15000, you are missing a lot of activity on that site.

This strategy is what I call Flat Based Pricing, and that would be to round up or down to the next common price band. The most common ones are $5,000, $10,000, $15,000, $20,000, $25,000 and on and on in $5000 increments. But there are also a lot of searches with $8,000, $12,000, $18,000 and pretty much any thousand dollar range under $10,000. I am not saying to take a $11,235 priced car and move it all the way down to $10,000 or to rise its price up to $12,000 just to get it in a common price point, but if it is due for a price change, I would move it to $11,000. All of this also depends on things like market days supply, age, % of market or ranking and other factors, so keep that in mind when you are pricing a vehicle.

Psychological Pricing could also be costing you vehicle detail page views (VDP’s) and here is why, let’s go back to the customer shopping for a sedan between $12,000 to $15,000. Most customers shopping between $12k-$15K have a budget closer to $12K but will look up to $15K, so pricing your vehicle at the traditional $14,995 will position this vehicle at the top of their budget and less appealing then the cars closer to $12,000. Now, pricing it at a flat $15,000 will also get that car into a price search of $15,000-$18,000 and if their budget is closer to $15K than to $18K, your car is the lowest priced car in this pricing bucket making it more appealing and get it more VDP’s. With this strategy, your search results and vehicle detail page views will increase significantly.

There are many other advantages to pricing your vehicles at a Flat Based price and I will cover them in later articles but we know at vAuto, the more VDP’s your inventory gets, the more cars you will sell.
 

Here are a couple of quotes that I have received from some of my dealerships over the last month since trying Flat Based Pricing:
“Jasen, I just thought you would want to know what your suggestion did for our internet department. I can’t thank you enough!”

“2008 Toyota Tundra listed at $18477 after 7 days this month it had 1025 impressions and 14 clicks at a rate of 1.4%
After changing the price to an even $18000 in only 11 days it had 3430 impressions and 79 clicks at a rate of 2.3%
THIS CAR WENT FROM  146 SRP PER DAY TO  219 SRP’S A DAY
THIS CAR WENT FROM 2 VDP’S PER DAY TO 6 VDP’S A DAY”

 “2007 BMW X5 listed at $30524 after 7 days this month it had 833 impressions and 7 clicks at a rate of 0.8%
After changing the price to an even $30000 in only 11 days it had 4218 impressions and 49 clicks at a rate of 1.2%
THIS CAR WENT FROM  119 SRP PER DAY TO  308 SRP’S A DAY
THIS CAR WENT FROM 1 VDP PER DAY TO 4 VDP’S A DAY”

Here is another one:

“Here are two examples that I thought you would enjoy for the flat based pricing
2003 dodge Durango 357 days old
Changed price to 6000 dollars on 7-24-11
Sold 7-28-11  for 6000 dollars    4 days                    
 

2000 Ford Ranger 59 Days in inventory
Original price 7499 06-1-2011 no action
Raised price to 8000 07-22-2011
Sold 07-27-2011 for 8000”

And another quote

“Since adoption of flat based prices in early July our SRP & VDP numbers have just skyrocketed within Cars.com and AT.com.  Here are my numbers from July…. 

AutoTrader 

Four months SRP…. 
April   May     June     July
74K     70K     55K     110K

Four months VDP….. 
April   May     June     July
1,800   1,650   1,260   2,200

 Cars.com 

Four months SRP…. 
April   May     June     July
45K     39K     36K     75K

 Four months VDP….. 
April   May     June     July
1,780   1,200   1,410   1,920 

Now don’t go telling everyone!”
 

Nick Miller 

While working with one of my clients covering a strategy on changing the price of a vehicle he had priced at $15,298, my first reaction was to tell him to reduce it down to $14,995 so he wouldn’t miss any searches done up to $15,000 because of his $298. Then it dawned on me, don’t even change it to $14,995 that might not work either. After the conversation, I come across a strategy that has changed the way I tell my dealers how to price a lot of their cars. It made me research all pricing strategies and how this type of pricing started in the car business.

Pricing a vehicle at $19995, $14998, or $9997 is a strategy that marketing experts call Physiological Pricing strategy.

How it Works
“A psychological pricing strategy works by selecting prices to which consumers will have an emotional reaction. For example, a car might be priced at $14,995 rather than at $15,000. A completely rational consumer would recognize that a price difference of $5 is negligible on a big ticket item such as a car. In reality, however, consumers do not tend to behave in such a rational manner, but will tend to act emotionally and round down prices.

Although the price of the car is closer to $15,000, many consumers will tend to think of it in the $14,000 range.” What Is a Psychological Pricing Strategy?By Wendel Clark, eHow Contributor updated June 30, 2011

We do this so when a consumer sees our ad, $14,995 looks smaller than $15,000 and they may mentally round it down to $14000 range, but that is if and only IF they actually see your ad. This strategy goes way back over hundred years and it is an effective strategy for traditional advertising. I would say though, for a lot of used cars on your lot, this is NOT the strategy I would carry over to today’s market.

When you think about it, we have changed almost every aspect of used car management because of the Internet, every aspect except Psychological Pricing.  Not changing from this pricing strategy is costing your vehicles search results (SRP’s) on sites like Autotrader/Edmunds.com, Craigslist, KBB.com, some dealerships websites and a lot of certified websites. It is also causing your vehicle to not get the vehicle detail page views (VDP’s) that it deserves because we are positioning them into pricing buckets that make them less appealing.

Let’s say you take a sedan from a price of $15,495 to a price of $14,995 to help move the car off of your lot and to get it more exposure online. But all you might have done is just moved that car from one price bucket into another price bucket and not increased its search results at all.
Here is why: if you have 500 customers shopping for a sedan in a price band of $12,000 to $15,000 and then you have 500 customers shopping for a sedan between $15,000 to $18,000 all you did is move the sedan from one price bucket to the other and you broke even in search results and didn’t get any more exposure on the car.

You need to get away from Psychological Pricing and price your sedan at $15,000!!! By pricing it at $15,000 you will double the opportunity for your vehicle to showing up in searches.  By staying with traditional pricing of $14,995, you will miss the opportunity of any search done $15,000 and up because of $5. Let’s face it; Craigslist is not the easiest of sites to shop for a vehicle. If you have ever shopped on Craigslist before, searching by price is the most effective to find what you are looking for, unless you know the exact model of car you are looking for, and if you price yours at $14995 instead of $15000, you are missing a lot of activity on that site.

This strategy is what I call Flat Based Pricing, and that would be to round up or down to the next common price band. The most common ones are $5,000, $10,000, $15,000, $20,000, $25,000 and on and on in $5000 increments. But there are also a lot of searches with $8,000, $12,000, $18,000 and pretty much any thousand dollar range under $10,000. I am not saying to take a $11,235 priced car and move it all the way down to $10,000 or to rise its price up to $12,000 just to get it in a common price point, but if it is due for a price change, I would move it to $11,000. All of this also depends on things like market days supply, age, % of market or ranking and other factors, so keep that in mind when you are pricing a vehicle.

Psychological Pricing could also be costing you vehicle detail page views (VDP’s) and here is why, let’s go back to the customer shopping for a sedan between $12,000 to $15,000. Most customers shopping between $12k-$15K have a budget closer to $12K but will look up to $15K, so pricing your vehicle at the traditional $14,995 will position this vehicle at the top of their budget and less appealing then the cars closer to $12,000. Now, pricing it at a flat $15,000 will also get that car into a price search of $15,000-$18,000 and if their budget is closer to $15K than to $18K, your car is the lowest priced car in this pricing bucket making it more appealing and get it more VDP’s. With this strategy, your search results and vehicle detail page views will increase significantly.

There are many other advantages to pricing your vehicles at a Flat Based price and I will cover them in later articles but we know at vAuto, the more VDP’s your inventory gets, the more cars you will sell.
 

Here are a couple of quotes that I have received from some of my dealerships over the last month since trying Flat Based Pricing:
“Jasen, I just thought you would want to know what your suggestion did for our internet department. I can’t thank you enough!”

“2008 Toyota Tundra listed at $18477 after 7 days this month it had 1025 impressions and 14 clicks at a rate of 1.4%
After changing the price to an even $18000 in only 11 days it had 3430 impressions and 79 clicks at a rate of 2.3%
THIS CAR WENT FROM  146 SRP PER DAY TO  219 SRP’S A DAY
THIS CAR WENT FROM 2 VDP’S PER DAY TO 6 VDP’S A DAY”

 “2007 BMW X5 listed at $30524 after 7 days this month it had 833 impressions and 7 clicks at a rate of 0.8%
After changing the price to an even $30000 in only 11 days it had 4218 impressions and 49 clicks at a rate of 1.2%
THIS CAR WENT FROM  119 SRP PER DAY TO  308 SRP’S A DAY
THIS CAR WENT FROM 1 VDP PER DAY TO 4 VDP’S A DAY”

Here is another one:

“Here are two examples that I thought you would enjoy for the flat based pricing
2003 dodge Durango 357 days old
Changed price to 6000 dollars on 7-24-11
Sold 7-28-11  for 6000 dollars    4 days                    
 

2000 Ford Ranger 59 Days in inventory
Original price 7499 06-1-2011 no action
Raised price to 8000 07-22-2011
Sold 07-27-2011 for 8000”

And another quote

“Since adoption of flat based prices in early July our SRP & VDP numbers have just skyrocketed within Cars.com and AT.com.  Here are my numbers from July…. 

AutoTrader 

Four months SRP…. 
April   May     June     July
74K     70K     55K     110K

Four months VDP….. 
April   May     June     July
1,800   1,650   1,260   2,200

 Cars.com 

Four months SRP…. 
April   May     June     July
45K     39K     36K     75K

 Four months VDP….. 
April   May     June     July
1,780   1,200   1,410   1,920 

Now don’t go telling everyone!”
 

Nick Miller