How to Get a Larger Share of the Soaring Certified Pre-Owned Market

Transcription

1 How to Get a Larger Share of the Soaring Certified Pre-Owned Market Certified Pre-Owned (CPO) sales have been one of the vehicle marketing success stories, giving franchised dealers an edge over independent competitors. Autodata reporting a 17% increase in CPO sales in June/2015 and with 2015 sales estimated to hit 1.5 million the CPO pie just keeps getting bigger. Sales strategies to help dealers price and market their CPO inventories to gain a greater competitive advantage all center on how CPO customers find your dealership and inventory online. So what can a dealer do to increase exposure and the odds of turning internet seekers into customers? On August 6, 2015 Jasen Rice, Owner of Lotpop, a training and management advisory service for dealership internet and used vehicle departments shared his thoughts about how to maximize CPO online marketing. Jasen began his dealership career in internet marketing in 17 and later as Director of Performance Management for vauto before forming Lotpop. He is a popular speaker and author and was featured on the cover of Digital Dealer Magazine. This report is a summary of his comments and suggestions..see Jasen s Contact Details on the last page. The goals of this workshop are to learn: How to increase your CPO Search Results Page views (SRPs) How to increase your CPO Vehicle Detail Page Views (VDPs) How some OEM terms are inhibiting your Search Page Views How to optimize your CPO Inventory Descriptions to increase VDPs An effective CPO Pricing Strategy that increases VDPs and sales How to get a larger share of the CPO market and beat your competition to the CPO buyer MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market 2015 DealersEdge All rights reserved. No part of this publication may be used or reproduced in any manner without written permission.

2 When developing internet strategies it is helpful to know what metrics are important. Two such metrics are: 1. Search Results Pages which is the number of times your vehicles showed up in a search on sites such as Cars.com, Autotrader.com, yours, etc. 2. Vehicle Detail Pages is how many times a vehicle has been clicked on to display the detail page view. So how do we increase the number of searches that open vehicle detail pages? One method is to structure vehicle prices to better take advantage of how customers actually conduct searches. PRICE TO MATCH HOW CUSTOMERS ARE SEARCHING Traditionally prices have been selected so that a customer will have an emotional reaction. This approach is known as Psychological Pricing because it leverages the irrational tendency for customers to mentally round prices down to the next large number. For example $14,9 will be remembered as $14,000 rather than $15,000. This approach has been a basic tenet of advertising for a very long time and works well when the medium is visual or aural such as print, TV or radio and includes a price is announcement. However this does not work so well with internet searches because of the way customers conduct their searches. Customers search many ways, by make, model, features, etc. but in almost all price becomes involved as a filter, especially when faced with a large number of choices. Customers tend to search using whole numbers such as between $12,000 and $15,000. They rarely set a range of say $11,5 and $14,900 when conducting their search. Plus vehicles may be left out of search for which it should be considered. For example a vehicle priced at $14,9 will not show up on a search starting at $15,000. Pricing vehicles with whole numbers is called Flat Based Pricing because it tends to increase the range of searches in which it registers. In fact the top 20 search requests entered into Autotrader are all whole numbers. Jasen also noted that customers will search in $500 increments suggesting possible price strategies. As a general rule flat pricing increases search results by fitting into more price parameters than traditional psychological pricing strategies. The top reasons to move toward flat pricing are: 1. Increased Search Results This example illustrates the impact that flat pricing can have. This Mustang s Page (SRP) and Detail (VDP) views both spiked when the price was reset to $20, MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market

3 In this illustration the page views of this Silverado increased when the price was raised $5 to $20,000. For this dealer the increase in both Search Result Page (SRP) and Vehicle Detail Page (VDP) views per vehicle began climbing when flat rate pricing was introduced in July. When asked about price adjustments to account for aging Jasen recommended using $250 increments. 2. Increased Vehicle Detail Page (VDP) views When a customer searches by price range, say $12,000 to $15,000 their budget is most likely closer to the lesser amount so by comparison vehicles in the lower range become more appealing. This is especially so when the list is organized low price to high. MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market 3

4 So in this instance, a vehicle priced at $11,9 would not appear in the $12-15,000 search. It would however appear at the top end for a $10-12,000 search. In both cases it would be at a disadvantage, showing up in the $10-12,000 search against the more appealing vehicles in the $10,000 range and not showing at all in the $12-15,000 search where its price would be at a competitive advantage. Repricing this vehicle to $12,000 would allow it to show up in both search ranges, increasing the SRP views and the odds that the VDP detail will be selected, especially when it is among the lower priced vehicles in the higher priced search. 3. Increased Search Visibility Flat priced vehicles tend to appear at the top or bottom of the search results against vehicles that are psychologically priced. For example, since vehicle search engines default from the highest to the lowest, all vehicles flat priced at the high end of the search will be positioned more favorablly. For example a vehicle priced for $15,000 in a $12-15,000 search will be positioned higher on the page than one priced for $14,9. Similarly, when price is filtered low to high, the vehicle priced at $12,000 will appear before the one priced at $12,045. Virtually all sites are organized to search by a flat price or by a flat price band. Jasen made the point that not all sites organize their price buckets the same so it is important to understand the sites that your vehicles may be appearing when establishing pricing. For example Toyota prices some price buckets in $500 intervals and Autotrader increases bucket values for higher price levels. Price is an important part of internet searches scoring high on parameter metric reports. Lastly, some discontinued vehicles such as Suzuki, Saturn and Mercury just do not appear on customer consideration lists and may need some help getting noticed. Employing a flat price strategy to get them near the top of the page on a high or low search can help. HOW TO USE DESCRIPTIONS AND PHOTOS TO INCREASE VDPs Be aware of Visual Direction 4 MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market

5 Visual Direction describes how the eyes follow the direction of the image. For example if the image points left, the eye is drawn left. Marketers have found that when the image points to the price or payment it is more likely to result in a sale. A recent study at a large group tested this theory and found a 7% difference in sales when the vehicle in the photo pointed toward the price vs. when it pointed away. Get your certification in your thumbnail Not all sites show the Certified label, dealer name or other vital information in the listing. Some just include a picture, price and contact information which can make it difficult to communicate important attributes and the full value of the vehicle. Embedding the dealership name, Certified Pre-owned designation, phone numbers etc. is a way around these types of limitations as these examples illustrate. 9 9 Prioritize photos with options Include photos that show the options and attributes listed in the ad copy. In general the more photos the better. When queried, Jasen suggested using enough photos to create a virtual walk-around presentation. MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market 5

6 Be aware of your descriptions Feature descriptions are sometimes called different things by different OEMs and can greatly affect a search. For example a sample search for a sunroof yielded vastly different results than for a moonroof, even though they are the same thing. To increase the odds that your vehicles will not be left out of a search Jasen recommends structuring ad copy to include multiple descriptions such as Sunroof/Moonnroof or Navigation/GPS/Nav for popular features. Perform virtual lot walks Just as you would maintain your physical inventory so should be the virtual inventory. Be sure that photos show the best attributes of the vehicle, communicate quality, match the descriptions and generally speak well of the dealership. Jasen provided some samples that seem to fall short. In closing Jasen offered these takeaways Flat pricing increases SRPs and VDPs. Visual direction increases clicks Point image toward the right and the price. Move option photos to the front and the top. Use the same word descriptions that your customers use. Think like a customer. 6 MJH1 - Jasen Rice - How to Get a Larger Share of the Soaring Certified Pre-Owned Market