fundamentals of pre-owned...
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CHARACTERISTICS OF TOP-PERFORMING AUTO RETAILERS
Joe BasilNCM Associates Moderator/Consultant/Instructor
FUNDAMENTALS OF
PRE-OWNED SUCCESS
ABOUT NCM
NCM® ASSOCIATES
+ Founded the automotive 20 Group in 1947
+ Provides
– 20 Groups: Largest Provider in North America
– Training
– Consulting
– Benchmark® Tools
– Business Intelligence: axcessa®, HealthCheck™, and TSI Auto Solutions
– Travel Solutions
+ 100% employee-owned and headquartered in Kansas City
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NCM DEALERSHIP CLIENTS
+ OEMs
+ Dealer principals
+ CFOs and CEOs
+ General managers
+ Department managers
+ Controllers
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COMPONENTS OF SUCCESS
FOUNDATIONS
+ Inventory Strategy Model Plan
+ Marketing
+ Sales Process
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KEY ELEMENTS
+ Leadership
+ Vision/Values
+ Culture
+ Business plan
+ Best people, right position
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KEY ELEMENTS
+ Changing environment: Disruptors
+ Information age: Universal access
+ Friction-free
+ Re-invent
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DECISION-MAKING
+ “I think”
+ “Everybody-nobody”
+ “All or None”
+ “Information-based?”
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DATA vs. INFORMATION
+ Data = useless in its own form
+ Information = data in a place, time, and format useful to make decisions
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INVENTORYSTOCKING
INVENTORY STOCKING MODEL
+ Unique/CPO
+ “A” car
+ “B” car
+ “C” car
+ “As-Traded”
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+ Type
+ Make
+ Model
+ Year
+ Options
+ Color
+ Mileage
+ Condition
+ Price
INVENTORY CATEGORIES
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+ What is a CPO car?
+ Are you in the CPO business?
+ Is there an opportunity?
+ What are your gross-per-unit expectations?
+ How fast should they “turn?”
CERTIFIED PRE-OWNED (CPO)
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+ One-of-a-kind+ Easier to replace the customer
than the car+ Gross expectations should be
very high+ Will account for less than 10%
of total inventory
“A” CAR
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2013 Subaru Outback56,000 miles
+ Still under warranty
+ Replaceable merchandise
+ Most wholesale loss exposure
+ In most cases, accounts for over 60% of inventory
+ Key is to keep these “turning”
“B” CAR
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2018 Camry LE26,000 miles
+ Lower price points+ Out of warranty+ Good, sound cars you’d sell to
your family members+ Return on investment high+ Would account for less than
30% of total inventory
“C” CAR
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2010 Chevy Malibu89,000 miles
+ Do you keep these?
+ Do you have a process for selling them?
+ What does “as-traded” mean?
+ Usually under $6,000 price point
THE TRULY “AS-TRADED” VEHICLE
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MARKETING
+ How the Internet works
+ How customers behave on the Internet
+ What to pay attention to
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MARKETING FUNDAMENTALS
MARKETING FUNDAMENTALS
+ Information-based
+ Brand image: What are you selling?
+ How is your store described by customers and competitors? How do you want it to be described?
– New car dealer that happens to sell some used cars?
– Used car dealer that also sells new cars?
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TODAY’S AUTO SHOPPER
Courtesy of:
luxury suv
Intent is redefining the automotive marketing funnel
Myth #1: Auto shoppers know what brand they want when they start shopping.
5auto brands considered
71% unsure of vehicle choice at onset
Google/Ipsos, “Digital’s Influence on In-MarketAuto Consideration”Study, US,August 2018. 18+ who are in-marketfor a vehicle in next two months (n=740 survey, n=767 behavioral)
52% of luxury purchasers
bought a vehicle make that wasn't in
their initial consideration set
Myth #2: Video is only a branding tool.
Consumers watch video throughout the entire shopping process
Brand1
Brand 2
Brand 3
Brand 2
Brand 3
Brand 2
Brand 3
dealer purchase
> 1 month from purchase
10 videos 3 brands
1 month from purchase
6 videos 2 brands
2 weeks before purchase
5 videos 2 brands
Google/Ipsos,“Digital’s Influence on In-MarketAuto Consideration”Study, US,August 2018. 18+ who are in-marketfor a vehicle in next two months (n=740 survey, n=767 behavioral)
Myth #3: Shoppers need some type of dealer contact before going into the dealership
More than half of car buyers have no contact with a dealership prior to their first visit
Source: Car Buyer Journey, Cox Automotive,2018
71% of shoppers no longer take a high-value action online before purchase
>1 month 1 month 1week
71%no HVA activity
Request financing info Request a test drive
Request a quote
purchase
Google/Ipsos, “Digital’s Influence on In-MarketAuto Consideration”Study, US,August 2018. 18+ who are in-marketfor a vehicle in next two months (n=740 survey, n=767 behavioral)
Digital empowers shoppers to get what they need without having to contact a dealer
Gearshift 2018 (Q1 + Q2) Question asked: NQ6 -Search extensions -What information did you look for before you went tothe dealership?
Base: New car buyers, n = 519 Source: Auto CB2018Google/Ipsos,“Digital’s Influenceon In-Market Auto Consideration”Study,US,August 2018. 18+ who are in-marketfor a vehicle in next two months (n=740 survey, n=767 behavioral)
40%
View listings of current vehicle inventory
86%
Review pricing and incentives prior to dealer visit
22%
Read dealer reviews and recommendations
SALES PROCESS
SALES PROCESS
+ Friction-free: “Time = new consumer currency”
+ Convenient, Easy, Enjoyable
+ Online/Email
+ Telephone
+ Text/Video
+ Face-to-face
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SALES PROCESS
+ Documentation vs. Negotiation
+ Up-front/One price
+ T.O. vs. One point-of-contact
+ Appraisal and price presentation
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+ Structured yet adaptable
+ Consistent
+ Word track and vocabulary
SALES PROCESS
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+ Re-invent yourself+ Information-based decisions+ Inventory model drives marketing+ Marketing based on consumer and market information+ Sales process: adaptable, convenient, easy, efficient, friction-
free+ Time = new consumer currency!!!
TAKEAWAYS
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