How To Attract & Sell The Millennial Car Buyer (PART 11)
TRANSCRIPT: Let’s talk about how millennial friendly pricing drives the 61%.
Think about it. 99% of consumers expect a hassle before they walk onto a lot. They’ve said that, 99%. People are price sensitive today because they have access to more price information than ever. If you’ve already given them a millennial friendly price, connected customer friendly price, if you’ve already priced your vehicle to market, you remove one of the biggest hassles that they think they’re going to have with you.
I don’t know if some of you remember this old Polk/Cobalt study from years ago, but it still rings true today. The old study said that if you provide the consumer with competitive price and a compelling reason to buy from you, 60% of people will stop shopping and give you a chance to earn their business. Right? 60%. Pretty close to the 61, isn’t it?
We’ve given a competitive price because we’re giving millennial friendly pricing online. If we have trust messaging and a good reputation, that’s a compelling reason to buy from us. 60% of consumers will drop everything, drive down to the dealership and buy the car.
Now with millennial friendly pricing, you do need VDPs, vehicle detail page views. Millennial friendly pricing is irrelevant without exposure, without VDPs. Unless someone can see your pricing, it doesn’t matter that you’re priced to market because they won’t see it until they come to your dealership. Having a VDP strategy, if you have millennial friendly pricing, that makes sense.
Having a VDP strategy without MFP, millennial friendly pricing, is ineffective. With millennial friendly pricing and valid traffic, you can expect that about a thousand vehicle detail page views is going to equal about five to six units sold for your dealership. Now remember, vehicle detail page views are contingent on things like validity of the traffic and your inventory.
Let’s look at some of my favorite measurement for VDPs. If I’m focused on VDPs, these are some of the measurements I’m going to look at. Now all of these measurements are relative measurements with no absolutes. These are just meant to help you guide your marketing budget. This means don’t ask what a good cost for VDP is. Okay? Because a good cost for VDP, it’s going to vary by source, by market, and by mix, what your inventory mix is, what your pricing are.
Cost per VDP is easy to figure. Right? I spend $1,000 and I got 1,000 VDPs. My cost for VDP was a buck, which would be very high. Anyway, that’s cost for VDP. I’ll look at it relative to that source, but again, I can’t tell you what a good cost for VDP is because it varies by source, by your market, and by what your inventory is.
VDP efficiency, this is something I will look at. This is VDP traffic, a source generated, divided by unique traffic a source generates. Let’s say we have a source that had 250 of the people they sent me, of the unique visitors they sent me, went and saw at least one VDP, and they sent me 1,000 visitors. Their VDP efficiency is 25%. 250 visitors that saw VDPs divided by total unique traffic, 1,000, gave me a 25% VDP efficiency. Okay?
VDP per session is another VDP measurement I like to look at. That’s total VDPs, total vehicle detail page views, divided by visits that a source generated. In this case, let’s say a source only generated 110 visits, but they saw 390 total VDPs. Then I have VDPs per session of 3.55. Don’t look at this number and go, “Is that where I should be, Steve?” No, it’s just a made up number. VDP measurements are relative to that source. All VDP measurements are relative to that source or similar sources. Similar classifieds, similar whatever, websites if I have two different website providers on two different of my dealerships.
I’m also going to look at leads and calls for every 1,000 VDPs. That’s an easy measurement to do. Vehicles sold per 1,000 VDPs. I’m willing to do not just the actual vehicles sold that came in from leads, but I’m willing to do that attribution exercise that we did earlier. I’m willing to extrapolate and give them a couple extra sales if it matters, if it makes sense, and if I do that across the board. Remember, VDPs as a contingent measurement.
Now with millennial friendly pricing and VDPs today, it’s a great strategy today. Like most great strategies, this one is evolving, so you have to learn continuous process improvement. What works well today may not work as well in three to five years, so be tracking and measuring constantly and be dissatisfied, be dissatisfied with this month’s results so that next month we can be better.
Now with millennial friendly pricing or not, it doesn’t matter, you need to cast a wide net anywhere you can show an acceptable ROI. Now general ROI hierarchy for most dealers, your best ROI for leads is your own website, then it’s the second party sites, then it’s the third party listings. By the way, somewhere down here is usually pay per click today.
I love third party sites. I love Autobytel, I’ll tell you that again and again. They still sell cars for dealers today. Most of the consumers who submit a lead through there are not coming to your website. The point is, is that I like my website first, then my second party sites, then third party sites. Don’t forget about Craigslist. Okay? Craigslist are the lowest funnel buyers in all price categories, even lower than your own website. I’m telling you, my dealers who do Craigslist right today, it is their lowest funnel buyers that they have, the lowest funnel leads that they get. People who submit a lead in Craigslist or pick up a phone in from a Craigslist ad generally buy today.
Now I’m not going to go through all my best practices, but if you’ll go to my leadership and automotive blog, AskTheManager.com, and you go into the search box and you type in “sell cars Craigslist,” you will get the article where my best practices are in and feel free to use those in your dealership.