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#51
Chris Leslie said:
Joe I don't think you understand what I am saying at all. I am not talking about my numbers as much as I am talking about the market.

What I am saying is if we have a million people in this city. On average there should be 30,000 shoppers in the market. Right?

What I am suggestion is for him to find ways to increase that 30,000 to 50,000, 75k, 100k
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Chris, I really do understand you, and I answered your observation with another observation. It's a fun exercise in strategy...

If we worked together and you came to me with your "marketplace stimulation" idea, we'd hit the white board:
Let's estimate that your "marketplace stimulation" idea will increase car shoppers to our market by 1%. A city of 1million goes from 30,000 car shoppers to 40k*. Let's imagine that traffic trickles down to Fairway Chevy and it goes from 3,000 car shoppers per month to 4,000.

In that scenario, If Fairway closes 3% of all visitors, then:
3000 shoppers = 90 sales
4000 shoppers = 120 sales (+30 sales from the "marketplace stimulation" idea*)

"That's a WIN! Next, I'd present you with another related & un-solved problem: "why are we only closing only 3% of our in-market internet shoppers on FairWay Chevy.com?" Let's explore increasing the conversion rate on our FairWay Chevrolet web site..."

If Fairway closes 3% of all car shoppers, then:
3000 shoppers at a 3% conversion rate = 90 sales
3000 shoppers at a 4% conversion rate = 120 sales

That's a WIN too! The net sales gain of both concepts are identical, BUT, improving the sales or conversion rate of the existing traffic causes the marketing costs per sale to plummet dramatically. Then I'd ask: "What's harder Chris, increasing the closing ratio of focused in-market shoppers, or, stimulating an out-of-market audience to enter into a market?" Clearly, working with in-market shoppers are easier. Lastly, increasing the higher profits from the improved conversion ratio is an investment that always keeps paying you back.

Just my $0.02
Joe



*Let's also assume, for the sake of the discussion, that the quality of these new in-market shoppers are on par with the rest of them market.
 
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#52
I get where you're coming from and totally agree that I would rather (within reason) spend more time, money and effort into the focused in market. But, thats still such a small piece of the pie when you look out outside forces that are acting upon the in market, market.

If the market this month is
60% - 45-54 affluent boomers
20% - 18-24 young families
20% - Empty Nesters

That same 30,000 or 3% of in market shoppers could be completely flipped next month and we would never know until it's to late.

So, do you pick a segment and focus solely on that? or, do you try to increase the market as a whole and go with the rising tide mentality.

To your last point. If we assume that the markets buying power is flat amongst the segments. How do you navigate the demographics?

If this were true as a representation of what demos we sold to

Demo 1 - 2%
Demo 2 - .5%
Demo 3 - .5%
 
#54
yagoparamo said:
I disagree;

The barriers of entry are:

A ton of money (to advertise)
A time machine (to start the site 18 years ago)
A miracle (like what happened to Craigslist)
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Eyeballs = A ton of money (to advertise)
I've stated earlier, when I started working selling automotive classifieds, I believe my company lost about $100,000,000 that year (2000).
 
#55
What I am suggestion is for him to find ways to increase that 30,000 to 50,000, 75k, 100k
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I've thought about this too - but I think without a financial product that consumers are comfortable with it's hard to sway the consumer. This sort of thing needs to be handled by the OEMs and the financial industry, though. I think Polaris Industries was working on an innovative leasing program like this for their ATV's and Snowmobiles. Probably the best example of this practice is with the iPhone (and other smartphones, too).
 
#56
Chris Cachor said:
I've thought about this too - but I think without a financial product that consumers are comfortable with it's hard to sway the consumer. This sort of thing needs to be handled by the OEMs and the financial industry, though. I think Polaris Industries was working on an innovative leasing program like this for their ATV's and Snowmobiles. Probably the best example of this practice is with the iPhone (and other smartphones, too).
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Both AutoTrader and DrivingSales presented major new studies this week. Both studies stated that changes in the buyer experience could result in customers buying (trading) more often (the AT study stated 53% would buy more often and the DS study said 56%).
 
#57
Ed Brooks said:
Both AutoTrader and DrivingSales presented major new studies this week. Both studies stated that changes in the buyer experience could result in customers buying (trading) more often (the AT study stated 53% would buy more often and the DS study said 56%).
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I think a big part of this is also tied to the fact that cars are making some bigger leaps in technology and features.
No longer does a new model just mean a new look and 2MPG better fuel efficiency.
The new model has new features, adaptive cruise control, better stereo, better iPhone integration, better safety features, far more efficient motors, etc.

Top of mind example is Ford when they launched their Sync models - huge change in the driving experience that they promoted and I know numerous people who upgraded their Escape to the same generation just because the newer one had Sync.
 
#58
craigh said:
I think a big part of this is also tied to the fact that cars are making some bigger leaps in technology and features.
No longer does a new model just mean a new look and 2MPG better fuel efficiency.
The new model has new features, adaptive cruise control, better stereo, better iPhone integration, better safety features, far more efficient motors, etc.

Top of mind example is Ford when they launched their Sync models - huge change in the driving experience that they promoted and I know numerous people who upgraded their Escape to the same generation just because the newer one had Sync.
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Absolutely Craig!
CarStory just released a new study today looking at the top "Must Have" used car features - The top 3 aren't available on most cars more than 5 years old.
unnamed.jpg
 
#59
I think a big part of this is also tied to the fact that cars are making some bigger leaps in technology and features.
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Very true. My boss mentioned this a few weeks ago. He is sick of of the old technology and wants something new (electric/hybrid) with a nice infotainment system (Car Play), bluetooth, etc. The gains in fuel efficiency are pretty huge, too. The 2016 Malibu Hybrid, Honda Accord Hybrid, etc all average 45+ mpg combined.
 
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