Is New Car Technology Worth It?

A few weekends ago I found myself in an empty house. Kids were gone with grandma and grandpa, husband on a guys-only weekend and, let me tell you, it was nothing short of incredible.

34e6tds_Fotor

At some point I thought I would put together a bookshelf despite my strong dislike for directions. After trying to figure out the directions, the tools and various whatevers – the bookshelf found its way to being returned.

Too many directions.

Much like my bookshelf, but way more expensive automotive makers are feeling the hurt with the technology built into vehicles today. J.D. Power’s first 2015 Driver Interactive Vehicle Experience Report is telling us that the average vehicle has 33 features, however only about 20 percent of those are being utilized. Ouch.

According to the report, owners who don’t begin using the technology within 30 days are not likely to use it at all. Of those surveyed, many reported the technology within their vehicles was something they wouldn’t use, didn’t want or simply came in a package. Makes sense – but, this begs the question: If the consumer knew how to use it, wouldn’t they? Lack of education around using technology in vehicles is no reason to shy away from having it.

I know I would need a week to learn how to use our long-time DealerRefresher Kelly Wilson’s car. That thing told us the weather.

At your dealership you can decide to have dedicated technology specialists or train your sales staff to do it. Either way, you win. When customers are more interested in leaving the dealership than learning about Park Assist think of creative ways to get them back in to learn more. Do you offer a first free oil change? You can teach them more about it while they wait. Can you email them short how-to videos? Post the videos on your website?

Despite the report’s numbers revealing low adoption, I think technology in vehicles will get better and only grow from here. It’s education and process that is a little bumpy. Like, my relationship with directions.

I ended my long weekend alone by ordering a fully assembled shelf from Amazon and that was nothing short of incredible either.

Current State of Dealership Websites – PCG Research Reveals

Considering a new website for your dealership?

PCGResearch dealership website platforms

Before taking the plunge, you may want to consider downloading the latest PCG Research report on the current state of automotive dealership websites here in the States.

Be prepared, the report is 30 pages deep. Thirty pages of valuable information that will help steer you down a more educated path of decision making while comparing some of the top selling website platforms that are offered to dealers.

The report that Brian and the PCG Research team have put together this year outlines a new set of standards, a constructive checklist for dealers to utilize.

Here is one of the summary tables included in the report which compares key features between some of the largest website providers:

PCG Website Features Study

 

Dealers who are researching the latest features and innovations in website platforms will be well served by reading this report. Based on PCG research and knowledge of the website marketplace, here are several conclusions highlighted in the report:

Is there really a science behind car pricing?

 

Of course there’s some degree of science behind an effective used car pricing strategy. BUT could there be one overlooked element that when used, could have an impact on opportunities and sales?

According to our friends at CarStory/Vast, that overlooked element is the number “99”. Vast looked at over 3.5 million vehicle listings and found that most dealers don’t end their prices with a “9.” In fact, only 7% of them ended in “99,” while 18% ended in “95” and 14% ended in “00.”

So what effect does ending a price in 9 have on consumer interest and conversion? Apparently quite a bit.

  • Prices that end in “99” vs. “00” showed a 16% lift in SRP-to-VDP conversion.
  • Prices that end in “999” performed 9% better than those ending in “000.”

Do me a favor, jump over on the blog and give this article a quick run through for even more statistics (It’s a short, to the point article, might take ya 1 minute to read. There’s even a link to download their latest white-paper in it’s entirety.)

What science are you using when pricing your used cars, other than utilizing current market conditions or a pricing tool?

What number(s) are you ending your pricing with?

Comment over in the dealer forums (over 20 comments so far)

Your buyer doesn’t have to trust you.

Your goal doesn’t have to be trust, but it should be credibility. Trust is like faith, “Faith is confidence or trust in a person or thing or a belief not based on proof”. Credibility, on the other hand, can be gained thru two paths; Negotiation or Market-Based Proof. Neither relies on a need to disclose your profit structure.  

ed brooks

– Ed Brooks

Get to know Ed Brooks
(The above quote is a snippet from Ed's response to a thread over in the dealer forums "What ways could dealers be more transparent..?" Ed joined the Refresh Forums and community back in 2010 and since then, has been a top contributor. Thanks for all you do Ed!

UPDATE: If you haven't read this discussion, you're missing out. :-))

Consumers really are drawn to prices that end with a…

nintynine

Ninety Nine – “99”. It’s true – consumers really are drawn to prices that end in “99.”

We recently conducted some research that analyzed just how much more used car shoppers gravitated to used car listings ending in “99” and the results were conclusive: there was a significant lift in clicks from vehicle search results to the all-important and high-converting Vehicle Detail Pages when a vehicle’s price ended in “99” compared to those that didn’t.

So how do dealers typically price their used vehicles? We looked at over 3.5 million listings and found that most don’t end their prices in “9.” In fact, only 7% of them ended in “99,” while 18% ended in “95” and 14% ended in “00.”

The Oldest Trick in the Book

To figure out how dealers could price vehicles to improve consumer interest, we started with an obvious question: what effect does ending a price in 9 have on consumer interest and conversion?

DealerSocket to Acquire Inventory+ (AAX & eCarlist) from Dealertrack

Hot off the press this morning…

DealerSocket and Dealertrack Technologies, Inc. has announced that they have entered into an agreement under which DealerSocket will acquire Dealertrack’s Inventory+ business in an all-cash transaction for only around $55 million.

dealersocket dealertrack deal

Inventory+ dealers, welcome to DealerSocket.

“We are pleased to be bolstering DealerSocket’s comprehensive website solutions, Customer Relationship Management and training solutions with the highly complementary inventory management services available through Inventory+,” said Jonathan Ord, chief executive officer of DealerSocket. “We look forward to welcoming the Inventory+ team to our organization and to working together to ensure a smooth transition for customers.”

Here’s the press release

Changing Operational Perceptions Through Transparency

In 2014, auto dealers on average produced used vehicle department net profit of about $120,000. That number includes F&I. The average dealer sold 621 used vehicles retail (with another 435 sold wholesale).

Can Transparency Sell More Cars?

In 2014, the average auto dealer made $193 net profit per used vehicle retailed.

That number is down from $254 in 2013 and about the same as in 2012.

Anyone can access NADA Data and see these simple facts. If I added all the man hours it took to produce that kind of net profit and compared that to any other industry I would bet that auto dealers return on hourly investment is one of the lowest per hour rates of any industry.

However, consumers perceive auto dealers much differently. Dealers made 2.2% net profit in 2014, a number which has been constant for each of the last 5 years. In comparison, Apple’s net profit margin is 10x that. Even Wal-mart has 54% higher net margins than the average auto dealer. Hmmm.

So, I ran a simple Google Consumer Insight Survey to find the actual perceptions of consumers. The results even surprised me. I laid out 5 options randomly for consumers to select and asked them how much net profit they thought dealers made per used car they sell.

Check out the actual Google Consumer Insight chart below…

consumer_perception_of_what_car_dealer_makes

90% of respondents thought dealers made over $254.  76% of respondents thought dealers made over $1,000. And incredibly, over 50% of respondents thought dealers made over $2,000.

In our industry I’ve heard the increased use of the word transparency. I think transparency and education are fundamental elements of trust and when considering a car may be one of the largest purchases of anyone’s life, how do we instill trust now and in the future.

So what do you think?

How can dealers educate customers to the realities of their business?  Is it wrong to disclose how the automotive market works? And if transparency is advantageous, how can auto dealers use transparent processes in the future? Comment over on the forums.

Value of Online Directories

 

SEO 101 question here:

How important are all the various online directories (yellowpages, smartpages, insiderpages, ect, ect, ect) to your dealership (in terms of Google/Bing), and have you used a vendor or internal resource to get all the correct information out to those directories?

Join the discussion in the forums