1,000 dealers share their thoughts about chat, text and messaging in general...and how these communications pay off. SEE HOW
Dealerships typically have certain vehicles that stay on the lot longer than desired. In order to see how effective marketing is at clearing this aged inventory, we evaluate a metric called “contact to sold”. This value looks at how long it takes to make a car sale once a lead has been generated. The digital space has given dealers the opportunity to significantly lower their average contact to sold number, but only if digital marketing is applied in the correct manner.
The national average contact to sold as of late has hovered around 50.2 days. This means that it takes almost two months for the typical dealership to move a car once a lead has been submitted online. Most dealerships would consider vehicles on the lot longer than 45 days to be aged inventory. Many times this is due to the dealer possessing units that are not in customer demand. Traditionally, there has not been a clear way to determine which cars would be hot sellers and in high consumer demand.
The answer to this issue lies with predictive analysis. This solution encompasses a variety of techniques including modeling and data mining to analyze current and historical facts, which helps to make predictions about future, or otherwise unknown, events. For example, our team developed predictive analytics to capture massive amounts of data on vehicle shopper’s behavior that is utilized to construct automotive conquest campaigns. Targeting units based on market and vehicle trends in this manner has helped dealers move, on average, an additional 38% of their aged inventory. Determining consumer demand and cross referencing active dealer inventory gives a dealership the ability to more quickly move their aged inventory and more intelligently acquire inventory that is likely to sell quickly. The data required to do this type of analysis is not readily available from major mainstream free analytic tracking platforms and typically requires a custom analytics solution.
We see dealers that transition from the traditional digital marketing approach to ZMOT predictive automotive digital retailing significantly increase units sold month over month, while halving contact to sold days from 50.2 to 21.3. We are able to confirm this due to our special analytical data mapping that includes 1:1 direct attribution of integrated digital marketing to the exact VIN# of the vehicle sold. Dealers have the opportunity for this level of predictive analysis measuring and monitoring performance on aged inventory while providing insight to acquire inventory more effectively.
We would like to hear how others are using data and analytics to reduce inventory age and acquire demand based inventory - Please post your strategies.