Trade appraisals with a defined written process will have a profound and immediate impact on the business immediately with no expense involved. A review of and development of the trade evaluation process and metrics will increase the amount of vehicles acquired. Like anything part of our business, it is all about the quantity of vehicles we get to take a swing at. If the items below are with EVERY trade opportunity, it allows for quick follow-up and gives the ability to measure and manage, which will give you the data to adjust the process to get more.
Customer name and phone number. If you need compact sport utilities, the first place to look is previous evaluations to find something that may fit the need and try to make the deal. If the name and number are saved, it is easy to pick up the phone without researching and asking who had that vehicle as a trade.
Source. Know where every vehicle comes from; if you track your profitability by source, it's easy to determine where the focus or dollars should be spent to acquire more.
Salesperson. We track the number of leads a salesperson handles weekly and monthly. You should have the same information about the number of trade opportunities your team is bringing you and what they are winning or losing. You cannot coach and train if you do not measure their success.
Save or Finalize every vehicle. This is the only way to keep track of that evaluation forever in your system, and it will also be the only way you will be able to track missed vehicles through some inventory management tools.
Sources should be tracked (#2), how many actual trades were evaluated, sight unseen, through the service drive, off the street or any other source. Evaluate the process often and adjust the process to get more opportunities to win more.
With today's shifting values and market trends, it is imperative to know what incentives are on new cars, especially on other manufacturer's products, be a student of your game and always be researching or if part of a large group with multiple franchises, ask your other leaders to keep you informed on any and all incentives that could influence your evaluation numbers. Since most are using a retail guide today to put numbers on vehicles, using a percent to market as the sole basis of the value can be misleading if a deep dive is not done on what you are comparing to.
Does your dealership have a written-out trade evaluation process and metrics with expectations associated with it? If not, why not?! Inventory will not be easy to acquire in the coming years, and a mistake can cost thousands of dollars in missed profits or losses on a vehicle acquired wrong.
-John Ruswick
Sr. Performance Engineer
Lotpop Inc.
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