tony rhoades | autoalert, llc | vice president, product | [email protected] s.t.e.m. the...
TRANSCRIPT
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
S.T.E.M. the Tideof
Margin Erosion!
Data Strategies to Drive More Margin from Your Used Car Operation!
• Former member of the U.S. Air Force Space Command• Previously spent 16 years delivering results in various automotive retail sales,
finance, technology, and e-commerce roles, the majority of which was with Gunn Automotive Group of dealerships.
• Has served on dealer advisory boards for several industry technology providers, and is a sought-after speaker for automotive industry events and conferences.
• Considerable retail experience, technical background, and dealer-centric approaches to automotive retail innovation.
TONY RHOADESVice President, Product, AutoAlert LLC
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
S.T.E.M. the Tide!• Service Lane Auctions
• Acquire quality inventory on the drive
• Turn Management• Find buyers early for your under 30 day
inventory• Cut wholesale losses by retailing your aged
inventory to existing customers• Improve inventory mix
• Eliminate Costs• Avoid auctions• Reduce recon expense• Decrease holding costs
• Maximize Margins• Improve Gross – 17%• Sale fresh inventory in the first 30 days to
maximize gross• Reducing holding costs by selling fresh
inventory to your existing customers
TURNG
ROSS
$
$0K
$1K
$2K
$3K
$4K
$5K
$6K
$(1K)
$(2K)
5 10 15 20 25 30 35 40 45 50 55 60
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Service Lane Auction• Fixed Coverage (% Total Net Profits) – NADA Average?• Improved Customer Satisfaction
• Fast & Easy Process• Seamless buying experience
• Owner Retention• 200+ Incremental Units each year
• $2,000 PRU = $400,000 additional Gross
• Length of Ownership• 6.5 years
36 – the number of months in which most customers would like to trade their vehicle but cannot due to negative equity, according to NADA
68 – the average number of months in a consumer’s trade cycle
56% - the percentage of buying populations which would purchase a vehicle more often if they were happier with the “process”, according to Automotive News®
67% - approximate percentage of “loyal” service customers who will purchase their next vehicle from a different dealer
75% - of consumers would be very likely or somewhat likely to trade in their vehicle today if their monthly payment would remain about the same.
A few key statistics…
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
• Service Advisor Greeting• No disruption to the advisor check-in
• Record Review (Mobile VIN Scan)• Previously Sold • Service not Sold Customer
• Meet & Greet• Introduction and thank them for their business• Record Tagging for follow-up
• Present the Opportunity• Acquisition Word Track
• Response Handling• No – Thank them for their time and again thank them for their business• Yes – Be prepared to conduct as much of the conversation on the drive as possible
• VIP Service to Sales handoff• Concierge or Sales Team approach
• Point of Sale Materials• Legitimize the Program
Steps to the Sale on the Drive
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
“We take in high-quality trades on 75% of the 50 units a month we are selling in the service
drive.
“Data mining is the catalyst that puts those opportunities in front of us; without it
identifying the right prospects we’d just be shooting from the hip.”
– East Coast Dealer
Service Lane Results
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Turn Management
0 5 10 15 20 25 30 35 40 45 50 55 60$0
$500
$1,000
$1,500
$2,000
$2,500
Used Car Profitability
Cost per day Gross
• Proactively find buyers based upon vehicle age• Fresh Inventory• Auction bound
• Quickly match top grossing units and to buyers
• Identify ‘Fastest Selling Inventory’ and customer from whom you can acquire
• Focus your one on one time with salespeople on your most profitable inventory. Match customer to salesperson to vehicle.
• Auction vehicles are not the best vehicles - your own customers’ low mileage vehicles you’ve serviced are
• Vehicles are at auctions for a reason, usually quality – service lane trades are almost always superior, cleaner so they’re nearly ready to go online or the lot
• Auction fees, transport costs and typically higher recon costs erode your margin – trades capture in your service lane save these costs
• Keeps UCMs and buyers on the lot, not at often unproductive auctions
• Lower cost of sale (< $200)
Eliminate Costs – and Frustrations
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Maximize Margins
• Increase Value• Trade Cycle Disruption• Convenience
• Data-driven new-car sales on average return 21% higher gross than sales originating from ups and online channels
• Can drop new-car cost of sales to under $200 NOT more than $600!
• Used-car sales driven by data mining average 17% higher gross
• Higher quality trades originating from your service lane “auction” require less reconditioning
• Better trades get on the lot or online fast so selling can begin
• Trades you originally sold are in-market models that tend to sell soon faster, reducing your turn and costs associated with holding inventory
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
Margin erosion is simply C.O.G.S. rising faster than
Sale Prices or Sale Prices falling faster
than C.O.G.S.
This results in shrinking margins!
http://www.extension.umn.edu/agriculture/dairy/business-tools-and-budgeting/margin-compression/
Margin Erosion: It Can be Managed!
“Success is not a campaign, it's a capability!”
• Accountability• User Support
• Training
Tony Rhoades | AutoAlert, LLC | Vice President, Product | [email protected]
~ Skutta
Tony Rhoades
AutoAlert, LLC
Vice President, Product
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