What type of business are you, a producer or platform business – this will help with identifying the type of data your business will need.
As a car dealer, you are both a producer and a platform business, because you have physical products (the cars) that you sell and you use your platform (your website) to sell them.
3 questions to ask when analysing your platform (website) data
Are these on ‘your monthly agenda’:
- How are you making the website visitors’ experiences better?
- Can you identify what is happening in your local SEO market?
- Are you understanding the journey that your consumers are taking through your website?
- How are you digitally transforming your business?
Are you digitally transforming by understanding how consumers are consuming your business’s platform?
One key issue that may be stopping you from digitally transforming, is over-reliance on ‘book values’.
What is ‘book value’ anyway?
Most car dealers use book values because they have to.
As you probably know, this should not be the leading way in which you value a car. The leading way in which you should value a car is by using live market data and retail back valuations. The reason is that data is constantly changing. Data changes week over week, month over month because of consumer demand and supply changes.
The upside is that we have the internet to help us, by providing all the data that we need in real-time. Buying and selling cars is like the stock market.
Car demand and supply:
- The supply side – is the supply of cars by car sellers like dealerships.
- On the demand side – are the consumers that are searching for cars.
How this economic model works
A couple of years ago, I was looking for a 2017 Hyundai Tucson. At the end of 2017, the vehicle was a certain price, however, when I searched for the vehicle again at the beginning of 2018 the price went up (theoretically, the car was a year older).
I went and looked at the data – advert views for the Hyundai Tuscon were increasing in the months leading up to January 2018. Consumer demand had been steadily increasing, which started making sense because you (the dealer) started increasing the prices. Probably buying slightly stronger and then selling slightly stronger each month. This clearly shows the importance of live market data, the increased demand for the vehicle changed rapidly and you were able to adjust the prices up.
Increased demand resulted in the increased price
The traditional book values are a lagging indicator and live market data is a leading indicator of demand.
AutoTrader – Fuzion Product
Fuzion is the only leading indicator product in the automotive market today, that will provide you with real-time data demand and supply data. Data that you need to price your vehicles correctly.
Live market data will provide you with the variant level and equipment level detail. Which will show you when there is much more equity on the vehicle than in the traditional book value.
Pricing and valuing your vehicles using live market data and retail back methods will determine the success or failure of your business in the long term.