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Keith Shetterly

Keith Shetterly Owner

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That Pesky Groupon Model Surfaces for Auto Sales . . .

Here we finally have a car dealership using Groupon for CAR DISCOUNTS (Cadillac and Groupon).  People can purchase an amount off the car later for buying a coupon for a lesser amount now.

 

I tried to get four separate dealers to try this last year. I'll get the same push-back here, perhaps, as I did from them, but this guy quoted in the article gets it:  It's not a coupon, it's ADVERTISING.

 

$199 buys you $500 off a car purchased this year.  The customer commits to buying from you by spending money NOW, and you apply this as an advertising expense.  Really, how much do most of you spend now per vechicle to get the phone to ring, leads/emails to come in, and to get walk-in traffic?

 

It's going just like pricing did:  We used to hold all the cards for brochures and price, and some of us played games in the newspaper.  Nowadays, if you're asked a price in a lead, you answer with a price (as well with calls to action and enticements, but you send a price).  THAT began when the first dealer sent a price and got business when others did not.  It will be the same here, if this works out, and I think it will.  It's just the first.

 

by Keith Shetterly, keithshetterly@gmail.com
www.keithshetterly.com
Copyright 2011, All Rights Reserved. 

Jim Bell
I saw this last night an laughed to myself. Why would you throw a groupon out there when chances are, the customer will can get that discount anyway? I can see a dealership using it in fixed ops. I debated in using it for us, but it didn't make sense since we have the lowest oil change in town at $12.95. I can see how it can benefit some fix operations though.
Keith Shetterly
Jim, thanks for the comment! It's just hard to see, but it's there: Essentially, for the few coupons bought but never used the profit to the dealer is about $100. For the coupons bought and used, the cost is about $400 total. It's advertising expense, burdened per car. But that's NOT all it is. These guys went into Groupon's OPT-IN email database and received two days of 750,000 exposure. Using a CPM impression rate of $10 (you could certainly argue more) on digital ad spends in many markets, this is gaining them $75,000 worth of CPM, too. Worst case is they sell all 150 at a cost of $400, or $60,000 advertising, which is still a savings of #15,000 . . . except that we have the added benefit of backend profits and we moved 150 units . . . but likely they will not sell this many. If they only sell 5, they just spent $2000 to get $75,000 in CPM impressions in their market. We've got to look at this as advertising. HUGE advertising. What do you think of it in this perspective? Thanks again!
Keith Shetterly
Ooops! I did that math wrong. That's **$7.5million** of impressions @$10 for 750,000....my bad!
Jim Bell
So do they get all of their email addresses for their CRM? That may be worth it to keep their name in front of them.
Keith Shetterly
No. Groupon keeps those 750,000 names.

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