Internet car shoppers far outnumber lot walkers.
So, dealer website inventory listings should “stand tall,” says Jasen Rice, a digital dealership veteran.
Many dealers get that. Yet, sometimes online car listings stumble. Rice (below, left) cites egregious examples during a presentation at this year’s Used Car Week series of online conference sessions.
- An online listing touts a truck as “a good deal” but adds “cabin size unknown.” Most truck shoppers would want to know about that.
- Another truck is listed as “a great price” but makes no mention of bed length or even color. Those are buyer considerations.
- A listed photo shows a dirty vehicle with a bumper sticker that says: “At least I can still smoke in my car.” In-market non-smokers might snuff out plans to put that vehicle on their consideration list.
- An interior photo of a pre-owned Jaguar’s dashboard all but zooms in on a “brake warning” light that’s on. That might put off shoppers who might otherwise consider buying the model, listed at $37,898.
To avoid such goofs, “do a virtual lot walk, not just a physical lot walk,” says Rice, owner of Lotpop, a dealership consulting firm specializing in digital retailing.
But he adds: “Most managers are so busy with their physical lots that they may overlook some things going on online,” such as the aforementioned missteps.
“You’ve got to get your inventory online quickly, but do it accurately,” says Rice, who formerly ran a dealership internet department and worked as a vAuto performance manager.
A used-car operation is one of a dealership’s most dynamic departments. It offers the potential to make a lot of money but also runs the risk of losing a lot, particularly if acquired inventory is accumulating instead of turning.
Used-car strategies “need to be lean, clean and profitable,” Rice says.
That includes tracking vehicle time on the lot. Unsold vehicles that sit on the lot not only overstay their welcome, they lose money daily.
A time-conscious, well-run dealership sells 60% to 70% of its pre-owned stock within 30 days, Rice says. “Dealerships with no aging policy let a car sit in the market. The best time to make money is when it’s fresh.”
When necessary, adjust prices of vehicles that linger on the lot, but avoid “a race to the bottom,” he says. “Don’t worry what the guy down the street is doing. Internally manage your inventory.” Ideally, that means “pricing right from day one.”
A long-time marketing tactic is odd-number pricing, such as $14,985 rather $15,000 to make the deal look more attractive. But Rice questions the wisdom of doing that in the internet age.
He advocates “flat pricing.” Why? Because of the way modern consumers search online for vehicle price ranges. If an online car shopper enters a $15,000 to $20,000 range, a vehicle priced at $14,985 won’t appear in the search results.
“People are entering flat numbers for their minimum and maximum price ranges,” Rice says. “No one will search for a $19,995 to $29,555 range.”