You have a lot of control on how much traffic your inventory gets online and not much control of your physical lot and here is why. The only way to control how much traffic you get on your physical lot is to have a police officer in the street in front of your store directing traffic onto your lot. That’s the only way to guarantee more traffic onto your lot. But online it’s a different story, it is almost all up to you!

Online there are 3 major metrics that you can control and track to gauge your inventory internet traffic and those are SRPs (search result pages), VDPs (vehicle detail page views) and VDP% (the conversion percentage between SRPs and VDPs). And online, you have control of how many SRP’s, VDP’s and how good your VDP% is based on how you control your inventory. There are 5 major components that effect SRP’s, and you have control over all of them but 1, and there are 3 major components that drive VDPs you have control of all 3. Let’s imagine that a SRP is the equivalent of a customer pulling in on your lot and driving up and down the lanes looking at what cars you have for sale and that a VDP is the equivalent of them stopping their car, getting out and asking you for the keys to take a closer look of the vehicle. So you really cannot sell any car off your lot without the customer asking for the keys to take a look at it, but you cannot get that customer to ask for the key for your car if he is not even on your lot in the first place. So SRPs drive VDPs and VDPs drive sales.

Here are the 5 components that effect your SRPs

1. More or less traffic online (this is the one you cannot control, if there are less shoppers online that can equal less SRPs for your inventory, and you cannot control that, but you can still drive up SRPs with less shoppers the better you get with #3)
2. Inventory count. If you go from 100 cars to 50 cars, you should expect less SRPs (unless you do better with #3)
3. Inventory mix. The better your inventory is matching what customers are looking for the more SRPs you can get. If you replace vehicles that are not being shopped for with vehicles that are more popular you should get more SRPs and vice versa
4. How fast you can get the car listed online. If 20% of your inventory is not online because they have not been through the shop and photo/described/priced it is costing you SRPs. If you reduce that to 0% you will get more SRPs because you have more cars online
5. Budget and package options. If you invest more in different packages offered by sites like Autotrader and cars.com the more SRPs you should get. If you go from a top package from one of these providers to a base package you will get less SRPs

Some would argue that you can drive SRPs with Photos, Price and or Descriptions but these do not guarantee more SRPs because you have seen vehicles with no photos and no descriptions still show up in a search because the default searches on these sites are set to show all vehicle. Yes, if someone narrows their search down to a photos only search and you do not have photos it will cost you a SRP but it is still not a guarantee that they will search that way and that’s the same with descriptions and price. I can even argue that price can drive SRPs if you Flat Price a vehicle (talked about in previous articles) but it still doesn’t guarantee the results if customer don’t search by price band. Watch out for your numbers leading you wrong. Just because you are seeing an increase in SRPs and VDPs doesn’t mean you are doing a better job, it could just mean there are more active shoppers in your market, so you need to be trending that activity out if you want to see what kind job you are really doing. But if you are seeing a drop in your SRPs and you have not changed your packaging then the first place to look is inventory count, then see if there were less shoppers in your market (both Autotrader and cars.com backend show you active shopper count) and then check to see if you have all your cars online or are they held up in service or by your photo person. I would trend these all out because a drop in SRPs could be caused by a “drop of the ball” in one of these processes.

Here are the 3 components that effect VDPs

1. Photos. If you do not have photos of your vehicles or if your thumbnail photo is horrible, then you will not get the click or VDP
2. Price. If you are priced to high or no price at all you will greatly reduce the VDP, the better you are at pricing the more VDPs you should get
3. Descriptions. The better you are at selling that car in the first few sentences the more VDPs you should get. (This does not guarantee more VDPs on a site like cars.com because they do not display the comments on the listing (SRP) page but it does help increase sales once the customer gets onto the VDP page).

The better you get with photos, price and descriptions the more VDPs you get on your vehicles and that drives your VDP%. If you are seeing that you have a drop in your VDPs, the first place to look is to see if your VDP% has decreased, if that’s the case it has to do with price, photos and descriptions. If you VDP% didn’t drop off then you need to see if you had less SRPs and if you did then you need to see what you can do to any of the 4 SRP factors (that you control) that you can change to get the SRPs back in line or to increase.

All these things play a factor in how successful you will be with your inventory online, and like I said at the beginning, you almost have total control and that’s the fun but yet challenging part. So I say, trend, trend, trend and if you can catch one of those issues sooner than later then you will continue to increase your online traffic (SRPs) which will increase your clicks (VDPs) which will increase your sales. 

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 

I believe that the dealerships that are struggling or know that they could do better with the internet are the ones with the lack of upper management’s knowledge on what to monitor, what to manage and how to make the department accountable. Put on top of that, the knowledge of what third party sites are good in your market, where to spend the internet budget, how to update the dealerships website, know the process of how the photos and inventory are being populated to all of these sites, and to make sure all of your internet leads are getting replied to in a timely manner and are being put through a good, effective internet process. These are the stores that struggle with the internet and get to the point of giving up on it or restructuring it every 6 months, the whole time knowing that the Internet is where they need to be these days to keep up with the consumer and the industry.

This is where dealerships with a knowledgeable Internet Director start getting the upper hand on results, like excellent response times, closing percentages, return on investment, low cost per sale and an overall more effective internet presence that helps effect the whole store. I see the Internet Director position at the store as similar to the GSM and the reason is that just like the GSM, the Internet Director is responsible to make sure that the virtual lot (website) looks good, they need to make sure they have the staff to handle the traffic and close the deals, they handle all the internet vendors, make sure that the ROI is in line, all the internet advertising is correct and the department is producing. But not only does sales benefit from having an Internet Director but also parts, service, body shop and F&I get to benefit from a well ran Internet operation. 

If you are a smaller store and have 1-2 Internet managers or salespeople handling the leads there is typically too much work for them to be effective selling cars!
1-2 Internet Managers responsible for 100-250+ leads
and is also responsible for:
-SELLING CARS
-Response time to leads
-Phone leads
-CRM updates
-Website updates
-Data/inventory feeds
-3rd Party vendors
-Internet reporting
-Photos
-Descriptions
-Locates
-Incentives
-Internet Specials
-Meet/greet appointments
….any many other responsibilities

But just like any industry, the larger stores, and large dealer groups have the resources and income to be able to hire a full time Internet Director while the single point or small multiple point dealer group still struggle to find a way to compete in their market. The big dealer groups have an Internet Director that manages 10+ stores (upwards of 30-40 stores in the larger dealer groups) that manage the departments and visit the stores on a monthly/quarterly bases.

So where do the small dealers go?

You can send your internet manager to conferences, hire an internet consultant for a day or two, but when the day is over, it is still up to the store and the management team to make sure they are getting the results they need. But most sales managers/GSM’s that I speak to (and I have spoken to about 1000+ of them nation wide over the last year) tell me that they wear too many hats already, so to make sure they monitor the Internet department is usually done only to their best ability. As long as their internet person sells their 10-15 units that’s good enough. This is not the sales managers/GSM fault, it is no different then having them be responsible for your parts or services departments, there is only so much they are going to know and only so much that they can monitor and as long as it is getting some results, that all they can do.

So I ask you again, where do the small dealers go?

Hiring a full time Internet Director would be the best place to start if you have the resources or income. But to have a full time Internet Director to manage a 1-3 person Internet Department might not seem to cost effective. Not only that but most the stores I talk to have a hard enough time finding good sales people or Internet Managers, much less finding a great Internet Director that really knows what they are doing. So now what? Hmmmm......

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

 

Disclaimer: I am not an expert in ObamaCare and I don’t want to act like one so I am going to quote some recent articles for this article.

In order for a dealership to grow in sales volume, it takes hiring more staff a lot of times. If you are selling 100 cars a month and want to push it to 150, it might require to hire more porters, mechanics and/or sales managers/staff to handle the load. But that also might put you over the 50 employee limit that can push you into the Affordable Care Act or Obamacare which can eat into your profits. Some of these new employees could be part-time workers but according to a recent article on stltoday.com, by Jim Gallagher that won’t help either, “the Small Business Administration gives this example of how the math works. “Company X has 40 full-time workers working 40 hours per week, along with 20 part-time workers working 15 hours per week. The 20 part-time employees are counted as 10 full-time employees. Company X has 50 full-time employees.”

The same article from stltoday.com says: “Lots of companies close to the limit will hesitate to go over it. Doug Simms, vice president at the Meyer Group of benefits consultants, has a maid service as a client. The company was thinking of expanding into a new area, but that would put them over the 50-worker limit. “They decided they’re not going to,” Simms said. Of course, that strategy can be self-defeating in the long run. It limits the company’s growth — and ultimately the owner’s profit.”

But outsourcing some task to independent contractors to grow your store can be the answer. Another validation for this strategy was found in a March 2013 article from Nancy E. Joerg on w-p.com that stated:
“a U.S. Department of Labor spokeswoman recently said "The ACA is going to significantly affect the way employers hire and make hiring decisions, and it definitely increases the desire to hire more independent contractors …."
INDEPENDENT CONTRACTORS DO NOT COUNT AS EMPLOYEES: Under the ACA, independent contractors do not count as employees when determining whether the employer meets the minimum threshold as a large employer.

So what other choice is left for the small to medium dealer to do if they want to grow?

Well there are several task that need to be done on a daily bases to grow your stores sales that can be out sourced to outside contractors. Let’s take used car sales and Internet management for example because these 2 departments are totally up to the dealership on the potential growth but take a lot of man hours to maintain and grow.

In used cars, you need to worry about making sure the vehicles are photo’d, priced effectively to market and described accurately in a timely manner, and that these vehicles are getting onto sites like Autotrader, cars.com, craigslist and your own website without any issues. If there are issues, the managers at the stores have to take time away from sales to manage and maintain these activities making them less productive to increase the sales volume. Managers need to do a “virtual lot walk” like they do their physical lot walk to make sure their vehicles on line stand as tall if not taller than they do on the lot. Good photo’d, good priced and good described vehicles on line will increase sales, but who is managing that process? If it is your manager, it is taking away from him selling cars on the lot. Hiring an outside contractor to handle these responsibilities will free up more time for your managers to sell more cars and work/train with your sales staff.

The internet department will also have task that are time consuming that are taking away valuable time away from the internet manager from working leads and selling more cars. They spend a lot of time updating the website, dealing with 3^rd party vendors, inventory feed problems, process problems, CRM updates, social media updates, reporting plus many other task. These task are not producing sales, but take valuable time away from that manager to be more productive working internet leads, which leads to selling more cars.

Again, these types of activities can be outsourced to an independent contractor to reduce the labor force load while helping the managers at the store be more productive and free up their time to help the dealership increase sales volume without adding another “employee”. There are many other types of jobs at the dealership that can be outsourced but these two are the most dominant ones to help increase sales that can be done from any location and not necessarily at the store. And here is why that could be possible, on a recent blog by Shane Snow titled “Half of Us May Soon Be Freelancers” he states several reasons why “it's entirely plausible that more than half of the American workforce will one day log in or show up every day as independent contractors.” The most dominate statement was: “The web lets you find the best person to do anything anywhere. Would you rather work with someone awesome or someone mediocre? Companies used to not have a choice, if the awesome person lived 3,000 miles away. Now they do.”

So I am asking you to think of how you can grow and then if you have limitations on your employee count to get there, think of other ways around the problem. That is what we car guys are good at doing, working around issues and tweaking what we have to get better results.  

 

 

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 

I started doing Internet sales in 1997 and since then I have always tried to stay ahead of the next dealership, doing things that no other dealer is doing. So one of my biggest challenge that I never got resolved, until now, was to find a way to include a hyper link into my listings on Autotrader and Cars.com to direct customers back to my site or any where else I would like for them to go.

To be up front, I am a vAuto rep for the store Moberly Motors in Moberly MO, and they gave me the permission to test an idea I had to include a QR code into their photos to see if it would work on sites like Autotrader and cars.com. So I took the url address that they had on their site for a video they did on market based pricing then created a QR code to link to the video. They do their photo management in our tool so I put the code as the second photo and it WORKED!!! I think this is huge!!! You can link customers to any site or just have it give them a text message about the car.

Click here to see the listing on Autotrader and try it yourself and let me know what your thoughts are:
http://www.autotrader.com/fyc/vdp.jsp?ct=u&car_id=294517787&dealer_id=1147610&car_year=2007&systime=&doors=&model=300&search_lang=en&start_year=2007&keywordsfyc=&keywordsrep=&highlightFirstMakeModel=&search_type=both&distance=10&min_price=&rdm=1301083622989&drive=&marketZipError=false&advanced=&fuel=&keywords_display=&lastBeginningStartYear=1981&end_year=2007&showZipError=y&make2=&certified=&engine=&page_location=findacar%3A%3Aispsearchform&body_code=0&transmission=&default_sort=newsortbyprice_DESC&max_mileage=&color=&address=65270&sort_type=priceDESC&max_price=&awsp=false&make=CHRY&seller_type=b&num_records=25&cardist=1&standard=false
 

To continue from my last posting talking about getting back to the basics, here are some benchmarks to be looking at: Now would be the time to strengthen the Internet department to make sure you are taking advantage of every single opportunity that you have. There needs to be a commitment from the top to make this work. You need to know what approaches that you want to make toward the internet, what bench marks you need to set and achieve, and not just in sales but in service, parts, and F&I. A good internal process for sales would be to track every lead, every appointment, every show, every sold, every “up” that is generated by the Internet. And use the report to manage on the items that are successes and failures.. Here are some good attainable goals for sales. First, most dealerships leads come from 50% third party, 30% dealership site, and 20% OEM. One goal would be to reverse the third party percentage to 30% and the dealership to 50%. One way to do this is to put more attention and resources to SEM and SEO. Next make sure you are spending no more then $25 per lead and $250 cost per sale. And then make sure your internet department is generating 20-50% of the dealerships business (the big gap has a lot to do with franchise and market). The internet managers should be shooting for 50% appointment from leads, 50% show, and 50% delivered. These goals should be changed once you establish a 3 month average. Work (meaning phone calls and follow up emails) for at least 60 days, then send them broadcast emails until they tell you to stop. At the end of each month you want to review each Internet sales manager and each lead provider by what they generated. For Internet Sales Managers let’s look at a rolling 3 months percentage of leads to appointments if their average is at 32% then we want to make next months goal to be 37%. Same increase goes for showed and sold. When it comes to lead providers, take a look at your over all average cost to sell, and as a reminder, make sure it is under $250 or your last 3 month average. You are going to have some lead providers that have a $250 cost per sale but some that have a $500 cost per sale. You must also be tracking their average appointments, show and sold. Just based on those numbers alone won’t tell you that one is better then the other. Before you cancel a lead provider, you want to look at the over all performance of that provider. For an example, let’s say ABC.com’s average cost per sale is only $250 but it provided 75 leads with only 10 appointments, 6 showed and 2 delivered and for a total of $500 a month. Plus the average gross profit of those leads is $200 less then your average internet gross. ABC.com closing percentage is 3%. It’s average cost per sale is in line but it is taking up a lot of man power to follow up with the lead and is driving down your cost per sale and average closing percentage. ($1300 average gross X 2=$2600) But XYZ.com’s average cost per sale is $300 and it only generated 50 leads, 28 appointments, 15 showed and 10 delivered for a total of $2400 a month. The average gross profit on these deals are the same as the overall departments gross. XYZ.com has a closing percentage of 20%. It is above your goal of $250 cost per sale and almost double your cost per lead, but has a good closing percentage. ($1500 average gross X 10=$15000) Now which one would you cancel? By canceling ABC.com you can take that additional $500, put it toward XYZ.com, get 10 more leads and 2 more deals at a $1500 average for an additional $3000 gross, which will out perform the cheaper lead. Again, now is the time to take advantage of the internet and every opportunity you have, and every lead or phone call you get from the internet. Get as many qualified leads that you can afford and work each one until they buy, die or unsubscribe.