Presidents Club 2014: Most Valuable Insight Competition

Each year at Driving Sales President’s Club, there is an opportunity for the Most Valuable Insight or MVI Competition. This grouping of ten-minute presentations is intended to give presenters a chance to reveal new data and research germane to the automotive industry. Kevin Root, President of Driving Sales explained that, “Research, it’s a word that’s tossed out a lot and it means a lot of different things to different people.”

That it has different meanings to everyone is instrumental in adding flavor to the competition. MVI 2014 saw four strong presentations from Andrew Price of Call Source, Jack Simmons of Cars.com, Chris Reed of Cobalt and Doug Van Sach from DME Automotive. After Root gave an introduction, the attendees were all ears as Andrew Price started things off with a statistic that jumped off the page.

“Seventy-five percent of consumers, when they are ready to make a purchase are using the phone,” Price explained, under the header of a ‘reality check.’ Price’s presentation centered on research from around 70,000 phone calls between customers and dealership salespeople. His findings concluded that items such as asking, “May I help you,” or trying more than twice to set an appointment, were effective in setting up those customer meetings, while communicating Price or Payment Information had a negative correlation on creating the desired appointment opportunities.

Next up was Jack Simmons from Cars.com who wanted to know whether, “ we (dealers) tell the story to the consumer in the right place where they shop today?” Simmons was referring to the fact that from 2005-2011, the majority of dealer profits came from parts and service, yet the digital presence of dealers in the ream where customers search online for that information didn’t reflect the urgency of the metric. Based on a closed-end survey of 822 respondents, Simmons revealed that consumers essentially want what dealers can provide; yet the digital marketing in this area appears weak.

The findings further stated that consumers want ASE Certified Technicians and desire an impressive warranty, yet this information isn’t showing up with a robust enough digital presence from dealers to significantly gain revenue. Simmons also stated the need for a strong need for “effort and culture.” That culture he felt would translate to better organically found online reviews and thus a better perception of your store.

The effectiveness of your marketing campaign was the next topic, piloted by Chris Reed of Cobalt. Reed began by reminding the President’s Club audience that in terms of digital marketing, we must ask the question, ““Is the traffic we generate from those (marketing) campaigns going to sell a car?” He stated that certain championed digital metrics are not quality indicators of predicting a sale. “Visits,” Reed stated, “are riddled with noise. Clicks are only a soft indicator of interest and leads are valuable but rare.”

However, Reed found that those customers who looked up hours and directions were a better indicator, since the consumer took action to find out where the store is and when they can come in person. He also found that Vehicle Description Page (VDP) views were a more predictive indicator than clicks or visits in general. Reed went on to explain that the consumer’s behavior as a whole on the page needed to be calculated in order to determine which customers ultimately led to a sale. This was presented in formula form. The Campaign score was calculated. The formula for this found by calculating the square root of the VDP views then adding H&D views to total form leads. The conclusion was that the aggregate behavior of the customer must be considered to gain a clear picture of the effectiveness of your marketing strategy.

Doug Van Sach of DME Automotive finished the slate of presenters by saying that, “Dealers today are only capturing 8% of the lifetime value potential from customers on Service Visits.” Van Sach explained that looking at retention without examining other factors is like looking at “one third of the picture.” Referring to what a better metric needed to indicate, he asked, “How many times they come in per year, how much they visit and how much they spend.” Gross Revenue Optimization (GRO) was his solution. GRO is a formula by which realized lifetime revenue is divided by Potential Lifetime revenue. The research examined by putting 300 dealers into two categories, higher and lower than average retention. The dealer with the higher retention had a lower average spend for return service visits than those dealers with a higher GRO score, which he felt took more factors into account. He further explained that dealers must “Take accountability for satisfaction not just relying on OEM to give them a score and manage that score they are following up with customers.” Van Sach found that investments in a better waiting area and the customer experience improved GRO score and thus return business.

With four strong presentations, crowning a winner was no easy task. In the end, however, the panel of dealers decided that the 2014 Most Valuable Insight Winner was Jack Simmons, Dealer Trainer at Cars.com. This competition features cutting-edge insight, research and data. Those interested in throwing their hat into this unique arena are encouraged to apply for MVI 2015.