The summer 2026 slowdown is affordability and shopper psychology, not dead demand. The affordability index hit 35.2 weeks of median income in April, the shopper index is down about 30 percent, and used listings are up, so buyers feel zero urgency. The fix is activity, not waiting: contact every lead on an in-stock unit every day or every other day, build your own buying lane with the trade-in script instead of defaulting to the auction, clean up aged inventory in the next 30 days before the July rebound, and anchor every follow-up on S.P.A.C.E.D. (Safety, Performance, Appearance, Comfort, Economy, Dependability) instead of "when can you come in?"
What you'll walk away with
- The slowdown is shopper psychology, not dead demand. Buyers send out 12 leads, hear "yes, it's still available" from everyone, and lose all fear of missing out. SRPs and VDPs are up, commitment is down, so urgency has to come from your process.
- A $25,000 car is a $25,000 car, but the auction one costs you more to own. Buy fees, PSI, transport, and holding cost all stack on top. Trades, street purchases, and the service drive deliver the same value at a lower cost of ownership.
- Your CRM is a buying lane. One dealer had 448 active leads and 327 showing no trade. Ask "do you have a vehicle you're selling outright yourself?" and log it, and you've built an internal run list with no auction fees attached.
- Margin compression is often self-inflicted. Run a trade variance report (allowance vs. ACV) and a price variance report (contract vs. ad price) on your last 20 deals. The delta is a coaching opportunity, not the market's fault. So is dropping your price every five days while shoppers sit and watch.
- Follow up with S.P.A.C.E.D., not "when can you come in?" Anchor every contact on Safety, Performance, Appearance, Comfort, Economy, or Dependability and you will never run out of things to say. You have about 30 days to move aged units before the July and August rebound, and the undefeated math still applies: more contacts, more appointments, more shows, more sales.
Episode chapters
Jump to the part you need. Timestamps match the audio and video.
- 00:08Cold openAn apology, a reset, and why this week's data matters.
- 05:16The affordability briefThe vehicle affordability index hits 35.2 weeks of median income, and what that means for your summer.
- 08:44Reading the market dataShopper index down ~30%, used listings up, average turn sloping down. What sold this spring was your aged inventory.
- 11:22Why shoppers feel no urgencyThe average buyer sends 12 leads. When all 12 say "still available," FOMO dies and the shopping cycle stretches.
- 16:00Follow-up disciplineEvery-day or every-other-day contact on in-stock leads, zero leads uncontacted after a price change, and the 30-day window to move aged units.
- 20:38The real cost of the auctionA $25,000 car is a $25,000 car. The difference is cost of ownership: buy fees, PSI, transport, holding cost.
- 23:00The trade-in script448 leads, 327 with no trade. "Do you have a vehicle you're selling outright yourself?" builds your internal run list.
- 31:43Self-inflicted margin compressionTrade variance, price variance, and the money-machine-me framework.
- 35:37What to say in daily follow-up"What caught your attention on this vehicle?" and the undefeated math of contacts.
- 43:52Stop dropping the price every five daysShoppers are watching your price changes and waiting you out.
- 46:04Merchandise it right the first timeOne shot at a first impression, online same as the front line.
- 54:24The S.P.A.C.E.D. frameworkSafety, Performance, Appearance, Comfort, Economy, Dependability, and the two questions to stop asking.
- 58:01Wrap-upGet watertight before the selling season returns.
The affordability brief: what 35.2 actually means
John opens the data segment with a number that stopped him cold: the Cox Automotive vehicle affordability index for April came in at 35.2, a measure of how many weeks of median income it takes to purchase the average new vehicle. Stack that against what the LotWalk data is showing across dealer partners, a shopper index down roughly 30 percent from the spring while national used listings climb on Autotrader and Cars.com, and you get the real shape of the summer slowdown. More inventory, fewer active shoppers, and a buyer whose budget is stretched thinner than it has been in years.
His message to dealers off the back of that data: now is not the time to do what you've always done, and now is not the time to hesitate.
Why shoppers feel zero urgency right now
The hosts walk through the psychology. The average shopper entering the market sends out about a dozen leads, and the first question is almost always the pre-programmed one: is this vehicle still available? In the spring, when nine of twelve answers come back "sorry, it sold," fear of missing out kicks in, shopping cycles shorten, and buyers commit. Right now every answer comes back "yes, still here," there is a wall of inventory online, and the emotion drains out of the purchase. The shopper index is down, but SRPs and VDPs are trending up. People are looking. They just have no reason to hurry.
Customers aren't coming to you right now. You have to bring the customer to you, and that means activity, not waiting.
That is why follow-up discipline is the first move in the playbook. A lead on an in-stock vehicle should get a touch every day or every other day until the customer sets an appointment or says stop. No lead should ever sit uncontacted after a price change on the vehicle they asked about. And if you are carrying aged inventory, John puts a clock on it: you have about 30 days to push it down before the market typically shifts in July and August, or the returning shoppers will feed on your discounted aged units instead of your fresh, profitable ones.
A $25,000 car is a $25,000 car: the real cost of the auction
Nobody on the show is anti-auction, and they say so repeatedly. The point is sharper than that: the value of a vehicle is the same no matter where you buy it. What changes is your cost of ownership. An auction unit carries the buy fee, the post-sale inspection, transport, and the holding cost of the week-plus lag before it ever hits your lot. A trade, a street purchase, or a service-drive buy delivers the same $25,000 of value without those costs stacked on top.
John adds a sourcing channel most stores never work: aged inventory sitting on lots in your own competitive set. Reputable OEM stores will sell you their aging units, they have already been through service, and over time those relationships turn into a monthly list of vehicles offered to you first. And the wholesale value retention index makes the case for him. It is running around 105, higher than any year back to 2014, which means the auction is the most expensive it has been in a decade. Fill holes there, but stop making it your first call.
The trade-in script: turn your CRM into a buying lane
Chris pulls up a real dealer (no name, no state, no brand): 448 active leads, and 327 of them showing no trade-in. On a lead mix full of late-model trucks and SUVs, he is not buying that those customers have nothing in the driveway. Years of "we'll buy your car" advertising trained consumers to sell rather than trade, so the old question, "are you trading something in?", gets a reflexive no.
The script that fixes it is one question: "Do you have a vehicle you're selling outright yourself?" When the customer says yes but insists they will sell it themselves, you do not argue. You offer to send buyers their way if one crosses your desk, then collect year, make, model, options, color, miles, and the price they are asking, and log it in the CRM under the trade screen. What you have built is an internal run list with no buy fees, no PSI, no transport. When your buyer calls that customer two weeks later, tired of strangers in his driveway, and says "I'm a player at 32," everybody wins, and the spread you saved is your gross.
The benchmark to chase: that dealer converts trades on 28 percent of leads, and the typical store runs 10 to 12 percent. Grow it month over month, 35, then 40, then 50, and you have your own buying lane that the auction can't touch.
Self-inflicted margin compression
Before you blame the market for thin grosses, Chris hands you two reports to run from your DMS. First, trade variance: pull your last 20 deals with a trade and compare trade allowance to ACV. If you allowed an average of $30,000 on cars worth $27,000, that is $3,000 a copy walking out the door. Second, price variance: compare contract price to ad price. If you are advertising at $35,000 and contracting at $30,000, that delta is not margin compression, it is a defending-the-value problem, and it is coachable.
It comes back to his money-machine-me framework. A customer who inquired on a $35,000 unit already told you the machine and the money work. What is left is the me problem, and the me problem is fixable. Same logic applies to repricing by reflex: if you drop your price every five days while ten customers sit on the vehicle watching, you are negotiating against yourself in public. Know whether you have a live buyer on a unit before you ever touch the price.
What to actually say in daily follow-up
The objection John hears in stores every week: if you want me to contact this customer every day, what do I say without sounding like a broken record? His answer is to stop selling and start discovering. Ask what about the vehicle caught their attention. Ask what they are driving now, because almost no one refuses to answer, and a year, make, and model in the CRM hands your buyer another acquisition call to make. Then trust the undefeated math: more attempted contacts means more contacts, more contacts means more appointments, more appointments means more shows, more shows means more sales.
The S.P.A.C.E.D. framework
Chris closes with the talk track that ties the whole episode together. If you want to know what to talk about every single time you follow up, anchor the conversation on the six things a shopper actually buys a vehicle for:
- S — Safety
- P — Performance
- A — Appearance
- C — Comfort
- E — Economy
- D — Dependability
Find out which one or two drive your buyer, then work them. If comfort matters, ask what comfort features their current vehicle has that they love and which ones they wish it had, then connect the vehicle of interest to both. You learn the trade-in's story and build value in the new unit in the same conversation.
And the two questions to retire from your first contacts: "What time can you be here, this morning or afternoon?" before you have earned the right to ask, and "Are you still in the market?" Every other store in your customer's inbox is asking exactly those two. The salesperson who brings real information instead is the one the buyer calls back when they reach the bottom of the funnel.
The Summer 2026 Used Car Playbook
The market brief behind the summer slowdown plus the full action plan: the affordability data, the three sourcing and lead moves, and the complete S.P.A.C.E.D. follow-up framework. Built to use on the lot Monday morning.
Enter your email and we'll send the PDF straight to your inbox. No spam, ever.
The Monday-morning action plan
Takeaway one from the episode: go into your CRM today, look at every lead from the last 30 days without a trade attached, and start asking the outright-sale question. Run your trade variance and price variance reports on the last 20 deals. Put the 30-day clock on your aged units before the July shift. And retrain your follow-up around S.P.A.C.E.D. so every contact adds value instead of asking for a commitment you haven't earned. As Chris puts it in the close: get watertight and bulletproof now, while it's slow, so when the market downshifts again you don't miss a beat.
Transcript is auto-generated from the episode recording and lightly formatted. It may contain transcription errors.
Chris Keene (00:08): we are back, folks. We took a week off, but you have tuned it back in. This is Lot Talk Powered by Lot Pop. I'm Chris Keen, one of the co-hosts, and joined by my brothers, my dudes, my guys I love going to battle with each and every single day. Mr. John Anderson, Mr. Ronaldo Letter, gentlemen. Good morning. Good morning. How in the hell are we doing?
John Anderson (00:19): you Morning. Morning, morning.
Renaldo Leonard (00:31): Hey, good morning. Doing great. On the right side of the grass.
Chris Keene (00:35): Yes, sir. We ain't fertilizing no grass with some decomposition, so we just gonna get after it. But before we get after it. I want to publicly jump out here and there was A group of individuals that didn't take too kind to some commentary that I'm gonna take full ownership because I'm the one who brought it to the table. And I'm gonna take full ownership of it, but didn't take too kind to some commentary that we had made that I had started my fault, a couple weeks ago. And to that group of individuals my sincerest apologies because it was not in any way, shape, or form meant to hurt anybody's feelings, call anybody out. It was literally meant for an example of where and how fast things in our industry could move and how quick something could slip out from underneath us. I meant no disrespect by it, but at the end of the day, your perception is definitely your reality. And I I do sincerely apologize For taking a situation obviously too far. And in no way, shape, or form was this podcast ever birthed to be a negative, merely just to be able to take every last bit of information that we discover, share it with individuals in our industry, give back to it in a way that we can possibly give everything we can. To help our brothers and sisters in this industry have a very successful career and find some of them blessings in this career that I know John, Ronaldo, myself, over a span of collectively damn near 90 years of, you know, experience between all of us, we've been able to take from this industry that's been really good to us. So again, in no way, shape, or form did I mean any disrespect. It was merely an example that obviously went the wrong direction and quite frankly I had a little too much fun with. So my sincerest apologies, and I mean that from the bottom of my heart. That being said, John, Naldo, we've been looking at some stuff over the last couple of days that the industry does need to hear. And with every every piece of Press that gets put out there that could put everybody in a panic. I want you all to that are listening, all that are viewing, rest assured. With everything that goes up, comes down. But once it comes back down, there is nothing that says that we can't raise it back up. So we're going to bring some things to the table today that are going to sound like some doom and gloom. But if you dial in, if you listen up, if you get your notepad out, there's some things that we've already started discovering in coaching with the dealers that we get the privilege to coach with that is helping offset. and stay ahead of some of these challenges that are out there. John, the data that you looked at that you pulled from Cox Automotive, l l let's start there, let's talk a little bit into that, and then we'll dovetail into some of the other things that we ran across.
John Anderson (03:59): I'm just here so I don't get fined.
Chris Keene (04:06): Ha ha ha.
Renaldo Leonard (04:06): I love it. Love it. Yes, sir.
Chris Keene (04:10): That's awesome. He he broke out the Marshawn Lynch for you youngsters that have no idea, go Google it because that was some of the best when he had to do his postgames.
Renaldo Leonard (04:23): yeah. that's that's gotta be second for me. That's my second favorite. My first was Rasheed Wallace. well yeah that's all that's a totally different level. But Rasheed Wallace, when he goes in and he was in Portland and they keep asking him questions. Both teams played hard. Next question
Chris Keene (04:30): Practice. Ha
John Anderson (04:48): Ha ha.
Renaldo Leonard (04:48): So John, you're not gonna get fine, bro. So yeah. Step on.
Chris Keene (04:51): You're not gonna get fined. You're not gonna get fined, brother.
John Anderson (04:55): I was just raised by a different person in the auto industry. So I'm just a little different man. So I got to cut myself back. He didn't pull any punches, man. So we've had him on the show, so he doesn't play any games. But anyway, no, to your point, Chris. I think the thing that jumped off to me was, and this was as of...
Chris Keene (05:06): Same cloth, baby.
John Anderson (05:16): May 18th. Vehicle affordability index in April was 35.2 and that the description of that is a monthly measure of the number of median weeks of income needed to purchase a new vehicle. I just think about that and I'm like, that blew me away. You know, when you when you think about some of the things that we're going to talk about today and some of these some of these industry highlights that are that are happening right now and you combine that with what's happening in the economy. You know, I would I would start this out by telling dealers now is not the time. Now is not the time to do what we've always done. And now is not the time to hesitate. Look, I know, you know, we talked about this a little bit before we jumped on. know sourcing is always sourcing is always. something that everyone brings up as a primary issue with operating their used car department. I would challenge our dealers out there to look at every way that you're sourcing inventory and find, be creative and find ways to supplement your sourcing. you might, you might, you might come up with, you know, one of the things that I always used to do and of course it's, you I'm 13 years out of a store, but I would always look for inventory. but other dealers in my competitive set that was aging. And I would reach out to those dealers and try to purchase that inventory. Right now.
Chris Keene (06:54): Mm-hmm.
John Anderson (06:55): When I first started doing that, did that did that yield a ton of inventory? No. I don't remember. I'm guessing I'm trying to recall. think the first month I did that, I may have purchased the entire month. I may have purchased five vehicles that way, but what what eventually happened was I developed relationships and and they knew I was always searching for inventory. And so at the end of the month, they would send me a list of vehicles they want to get rid of. So I had an opportunity to. purchase those vehicles directly from them. The nice thing about that is they were all, they were already, they had already gone through service. Now, again, I'm looking at competitive sets with OEM reputable dealers, not, not, not Johnny Shag Shack. I'm not looking at, I'm not looking at, I'm not looking for vehicles there, but OEM reputable dealers that they've gone through the process. They pushed the car up, right? Now I'm going to bring it in and I'm going to send it through service, have them check it over and we're going to
Chris Keene (07:36): Ha ha
John Anderson (07:49): give it a quick detail, but I don't need to do a deep detail on it. And it's, it's a quick turnaround time. And I'm trying to remember, I honestly feel like over the time that I was doing that, there may have been one vehicle that I had to reject and I called him back and he took the car back. No problem. Right. And so, but did it happen overnight? No, but it was adding to the list of, adding to the list of ways for me to source inventory that lessened my dependency on the auction.
Chris Keene (07:54): Mm-hmm.
John Anderson (08:18): And there might be some folks listening from the auction and, you know, I'm not trying to. There is a place for the auction and I'm not trying to handle, I'm not trying to hammer auctions, but this is another thing as I was digging this morning to talk about some of this stuff. When I looked at the wholesale value retention index, right. And I looked at it again, this is from May this month, or I'm sorry, last month, May so far.
Chris Keene (08:44): Here John, let's share that let's share that on the screen and talk through that. Talk through that with those that are viewing and then those that are listening. here, I've got it right here. I'll throw it on the screen for us. Yep.
John Anderson (08:52): Where's that? Where's that? Where's that? You got it? All right, so when you look at, to the, yeah, there you go. So shopper index is starting to kick back a little bit now, which is good. Now let's see if it lasts typically comes in at the end of June. It could be a little bit early and we are seeing, our data is showing that, SRPs and VDPs have been trending up a dealer. people, there's no doubt that customers are online and they are looking at inventory. But Chris, if you could hover over that national use car listings right there, and look at that difference. Just since look at that uptick, right? Right. Just since right there, right? That's April, right? We've gone from 1.4 million listings on audit trader up to 1.4, two six on audit trader up to what? 1.4, 1.5. Yeah. Look at, and then look at the same thing on cars.com, right? There's been a, there's been definite shift and more listings online. So there's, there's plenty of inventory.
Renaldo Leonard (09:43): Yeah.
Chris Keene (09:53): Uptick.
Renaldo Leonard (09:54): There's been a definite war, I think. So there's there's plenty of evidence for when you look at the the software index on the country.
John Anderson (10:00): And when you look at the, the, shopper index, although it has shifted when you look at it overall, it's down dramatically over the last few months, which is not. Yeah. Yeah. So it's not any surprise. This is typically what happens, right? We've had a 30 % decrease in shopper index. We have more used car inventory in the market. Right.
Renaldo Leonard (10:09): So it's not used to the right, it's just
Chris Keene (10:11): So let me get let me let me get a look at the overall here and show that.
John Anderson (10:26): And now I know that there's a lot of folks out there that said used car inventory was down. And I think, you know, Jason, our CEO, Jason Rice kind of debunked that by looking at what was selling during the spring selling season. And the majority of what sold was aged inventory. So yes, aged inventory in the market was down because that's what primarily sold. And that's why you, that's why you see that. Look at the.
Renaldo Leonard (10:36): Kind of That's what you see then. Look at the second look at the hours
John Anderson (10:54): Look at the average, look at the average turn that's been sloping down the entire time, right? That's because a lot of the inventory that left the market during that spring selling season was aged inventory, but dealers went right back out and replaced that inventory. So the overall numbers didn't decline, just a certain segment, right? And so you've just got a lot of things out there right now, Chris, that are fighting us. And here's the thing.
Chris Keene (10:58): Mm-hmm. Mm-hmm.
John Anderson (11:22): when, when the, the situation is like it is right now. And, and here's what I, here's what I see from my perspective, as I'm looking at our dealer partners, because I have insight into their, their trending. And here's what I see happening. The shift, the shift that has happened is, we've come out of the spring selling season. We have a ton of inventory out there and we have less shoppers, which is not uncommon. It happens every year this time of year. Now the shoppers in market have been active. And what I mean by that is they are looking, they are actively looking at inventory, thus the SRPs and VDPs. But here's the thing.
Chris Keene (12:07): Mm-hmm.
John Anderson (12:10): automobiles are either first or second and the it's easier homes and automobiles are your two most emotional purchases that you'll make in your lifetime. Right. And so when you think about it logically, if I'm a consumer and I'm sending out, so remember the number that the cars with coffee guys told us the average customer sends out, how many leads when they enter into the market?
Renaldo Leonard (12:35): Twelve. So now it's
Chris Keene (12:35): twelve.
John Anderson (12:37): Right. So if I'm sending out 12 leads, right. And when I went and what's typically the first question that a customer asked when they send out a lead.
Renaldo Leonard (12:47): Yeah.
John Anderson (12:47): Is this vehicle still available?
Chris Keene (12:48): Still still available.
John Anderson (12:49): Right. That's even, even if you look at your third party, right. Auto trader and cars, it's even pre-programmed in there. Right. You just click a button and it's just ask, is this vehicle still available? Right. So that question's pre-programmed. Right. And if they're hearing, you know, if, if all 12 or let's say 10 of the 12 re respond to me by saying, yes, it's still in stock. Do I have any emotion in that thing? No. Right. Contrast that to. The spring selling season, when they send out 12 leads and nine of them come back and said, sorry, we sold it or we've got deposits on it. Now, now I'm more likely as a consumer, to a FOMO enters in right. Fear of missing out. So I'll make it, I'll make an irrational decision during that time. I'll, in other words, I'll, I'll shorten my, I'll shorten my shopping cycle and I'll pay more for a vehicle. Cause I don't want to miss out. Right. Cause it's emotional purchase, but right now that's not happening. Right. They have tons of inventory. The shopper count, the shopper index is down by 30%. There's a lot of outside in influences like high gas prices and things that are going on that are causing me to hesitate as a consumer. Right. So I can have no reason to bring in emotion. I can sit here and shop and what, we don't understand as dealers is what do we need to do when that happens? Right. We need to, now we need to, how do we need to counter it? How do we counter that? Right. So. Everything slows down. Well, I need to counter that by being more active and improve and increasing my activity. Right. Cause I now it's shifted. Customers not coming to me. I got to bring the customer to me. And how do I do that? By serving the customer in the way that they want to be served. And, and I just feel like that's not what's happening right now. As I see it overall, we're just, that switch hasn't flipped and we're sluggish.
Renaldo Leonard (14:33): Yeah, yeah.
John Anderson (14:36): in the way we're still waiting on the customer to come to us. And that's just not going to add that European model. I went to Germany one time with my brother-in-law and I, and he was buying a car. So I got the, I got the luxury of going into a German. went to a German dealership and all the salespeople were sitting in the showroom floor. were customers all over the lot. Not one of them was moving out of their desk and I was feeling the anxiety, right? I'm like, what the hell? There's customers everywhere. Nobody's waiting on them. So, so
Chris Keene (15:01): Well
John Anderson (15:04): I go in and ask, go, do you guys not go and wait on your customers? They're like, no, they come to us. That market is not here in the United States guys. So, right. I was blown away. I was like, you gotta be kidding. Right. I was like, give me a desk and let me go to work. I listen, Chris, and I know we're going to get in a lot of data, but I just want to share from my perspective, a major thing that I see.
Renaldo Leonard (15:13): I think some some dealers do they yeah.
John Anderson (15:33): that I'm seeing is just, and it shows in our data, right? Because the two week selling percentage at our dealers has slowed down, right? And so while customers online, they're definitely looking because SRPs and VDPs are up, but now as a dealer, we got to be proactive. how do we find, if they're looking, we got to find the reason why they're not setting appointments and buying, right? What are those reasons, right? And by,
Chris Keene (15:42): Mm-hmm.
John Anderson (16:00): By having the first question be, Hey, when can you be here with your trade? That's not finding that out guys. That's not finding that out. It's just not right. We got to dig deeper and managers at stores. got to inspect what you expect. You know, there should be, look, you should have no, you certainly shouldn't have any leads that haven't had a contact since you made a price change on a vehicle. That, that should be zero all the time. Right. And we're seeing those numbers and then, and then, Contact over two days. Right. There you should be reaching, if you have a, if you have a lead on an in-stock vehicle that that customer raised their hand for that vehicle, you dealers and you should be reaching out to that customer every day, every other day until they tell you to leave them alone or they set an appointment because that's being proactive. Otherwise you're just waiting on them to You're waiting on them to take action and today's market, that's not going to get it done. And the last thing I'm going to say is if you have aged inventory, dude, you got about 30 days, you need to get that stuff pushed down so that when the market does shift and I hope it does, it typically does in July and August, you've got a bunch of fresh inventory where your customers are going to transact that. If you've got a bunch of aged inventory that you've got priced at 91, 90%, 88, 89, guess where they're going to come in and feed when they start coming into market. is on that lower price point inventory and you're going to complain that you don't have any gross because your customers are buying your lower price point inventory, not because you have it, right? I got to get rid of it in order for that customer to transact at a higher price point with me. I got to get rid of that age. So I know I threw a lot out there, it's just look, man, and we'll get into this data, but Chris, as we were talking about it, Ronaldo, as we were talking about this morning, man, it just all makes sense. And what we're seeing with, with this data that we're seeing out there in the marketplace right now.
Chris Keene (17:46): Mm-hmm. Naldo, what's your take, brother?
Renaldo Leonard (17:47): Yeah. And I mean it it make it makes sense from what we were seeing, you know, as far back as a month ago. I mean, as soon as those shopper counts started to decline, or as soon as we saw that drastic drop, what advice were we giving dealers? Hey, you gotta take you have to take the leads that you do have and you have been able to generate, and you have to work them that much that more that much more stringently. than you have in the past. Because those people that are looking, they're in the market. They're just taking a little more time. They're being a little more diligent in their research. But to your point, a lot of people don't see the they don't see the value in creating an environment where there is a sense of urgency driving those people's decisions. You know, if if things are slow and we're at the brick and mortar, what do we do? We we pull out the balloons and and the wavy dude to attract attention because you want to create an environment that things are popping, right? Same thing. But a lot of guys don't make that correlation between your digital dealership and the leads that are that you've generated and the ability to be able to drive that sense of urgency and get people to act on what it is that they know they need to do. There are not a lot of people who are not in the market just sending out leads.
Chris Keene (18:41): Ha ha.
Renaldo Leonard (19:02): Right. Or at least I'd never rated, you know, those folks. we're just looking on you know, wanted some information. Yeah, let me let me direct you to a couple of websites where you can get all the information that you need. No. If somebody said, I'm interested in this vehicle, it was Tuesday, a prom week, and I didn't have a date. I'm calling every day, two or three times a day, to let them know, hey, this vehicle is not gonna be here long and it's gonna go.
John Anderson (19:24): you Ha
Renaldo Leonard (19:27): I'd much rather you have it than somebody else, right? So but yeah. It's and now when we started sending out that message and having those conversations, you know, here we are at thirty days into it. And some dealers still haven't made that correlation or driven that activity from inside of the shop to the prospects that are out there in the market. but yeah.
Renaldo Leonard (19:50): For some those folks, it's gonna get a lot worse before it gets any better if they don't really get cracking on it. Right. They concentrated on, like we said, acquisition. You know, you don't need to go out and buy more vehicles. Sell what you have so that you can position yourself as those values start to decrease, which we've already seen them decrease a little bit, and it's gonna get gonna continue to decrease as more. New vehicles are being sold in the market. But we've we've got to put ourselves in the catbird sheet with a lean inventory and be positioned to take advantage when those wholesale prices kind of hit bottom going into end of July, beginning of August August. But yeah, the data doesn't lie, but the data it kind of repeats itself. Cyclical this time of year.
John Anderson (20:37): Yup.
Renaldo Leonard (20:38): Mm-hmm.
Chris Keene (20:38): So, you know, the main piece that, you know, Ronaldo and John that you guys are talking about in there is, you know, obviously selling what you have. But then, John, you brought in the point of, okay, great, but we still have to acquire vehicles. And to echo and go a little bit deeper on what John was talking about, you know, hey, we're not dogging on the auction. The auction is a viable place to purchase inventory.
John Anderson (20:53): Right.
Chris Keene (21:04): If you don't have a buying team internally, if you don't have an established process to where you're street purchasing, where you're service drive purchasing, you have no choice but to go to the auction. Okay. We've talked about this when we've had Frank Knox on, we've when we've had some other guests on. A twenty-five thousand dollar car is still a twenty-five thousand dollar car, regardless of the source that you get this car from, whether it be the auction, whether it be a street purchase, whether it be a service drive, or whether it be a trade-in, that the value of that vehicle is still twenty-five thousand dollars. The only differentiation in three of those against one, the auction being one, the street, the trade in and the service drive being three. The only variance between those two is the ones that you buy from the auction have a higher cost of ownership. The value of the vehicle is still the value of the vehicle, but your cost of ownership is greater in just a hard cost alone with your buy fee, your PSI, your transportation. And then your other costing that comes in with the lag time. To get from the auction to your dealership with your holding costs. So your cost of ownership is higher, but the value is still the value. So what is another way? John gave a great suggestion of looking at your competitive set, finding some of that aging inventory for somebody else that may work for your store. But then he also brought in the trade-ins. And I'm gonna share my screen for just a minute here. This is a prime example, and I'm gonna preface this, everybody. I'm not mentioning a state, I'm not mentioning a dealership. Hell, I ain't even gonna mention the brand. So, but this is a dealership that's new to us. They have four hundred w what was that?
Renaldo Leonard (22:53): John, did you pick up the I was gonna say John, did you pick up the fact that Chris got his he got his tap dancing shoes out? He's about to go bogangers on us.
Chris Keene (23:00): Yeah, I I'm going with Sammy Davis.
John Anderson (23:01): He's Michael. Michael Jackson got nothing. Got Michael Jackson got nothing on my brother right now, bro.
Chris Keene (23:02): I'm going with Sammy Davis here. Okay. Michael, Prince, Sammy, not one of those three can out dance me right now. Okay. But look at this for example, guys. For the for the viewers, you can see what I'm pointing at here. For the listeners, let me do my best to explain it. This dealership has four hundred and forty eight active leads on vehicles. Okay, four hundred and forty eight active leads on vehicles that they either have had.
Renaldo Leonard (23:08): Ти
John Anderson (23:14): Heh.
Chris Keene (23:33): or some switch opportunities, but 448 active leads here. Of the four hundred and forty eight. We're saying three hundred and twenty-seven of them don't have a trade in. I find that hard to believe. When somebody's looking at F two fifty that's a twenty-four model, a twenty-five model Land Rover, a twenty-four gladiator, a twenty-four GX550, a twenty-four Raptor, okay, maybe not the 2020 Tahoe. But just these first six right here of consumers that are in this dealership CRM, the first six. Five of the six are late model vehicles, and we're saying they don't have trade-ins. And you know what? Maybe they don't. Maybe they don't have a vehicle that they're gonna trade in. Okay. But have you guys considered since COVID when we had a huge disparity of inventory because of production, because of the chip shortage, because of fill in the blank, whatever. We we jumped out there as an industry. There was already at the time traded marketplace, morphed into KBB ICO. And they were kind of the leaders out there in online acquisition, along with CarMax, Carvana, and at the time Vroom was still around. But we started conditioning the consumer public. We started conditioning the consumer public. Sell your vehicle, sell your vehicle, sell your vehicle. I don't care if you buy a car from us, I'll buy your vehicle from you. We started conditioning the consumer public to that. So fast forward six years. Now, a lot of this is some good old Joe Verdi stuff that I'm sharing on the screen. It's a trade-in script. That I've shared with hundreds and hundreds and hundreds of dealers across the nation. In the old traditional things we used to say, you trading in a vehicle, replacing one, adding to the fleet in your driveway, that's how we would ask for a trade in. But one of the things that I would implore all you listeners and viewers to do, start asking this question. Or do you have a vehicle you're selling out right yourself? Now when you ask that Note that some defensive walls might start coming up. If you ask, hey, do you got a vehicle you're selling outright yourself? And that customer says, Yes, but I'm not I'm not gonna I'm not traded in. You guys ain't gonna give me enough money for it. I've already looked at every website under the sun and my vehicle's worth X amount of money and I'm gonna sell it for that. Okay, that's perfect.
Renaldo Leonard (25:40): Just
Chris Keene (25:51): Maybe respond to the consumer like this. We get hundreds of customers come through our doors daily. We can't stock everything that everybody wants. If I happen to run across somebody that's looking for a vehicle like yours and I don't have it, would you care if I sent that customer your way? What do you think that consumer is going to say? No.
Renaldo Leonard (26:09): Of course, you got my information. Send them on. Please.
Chris Keene (26:13): Great. Go ahead. Do me a favor, Ronaldo. what your model is it? What's the make? What's the model? What's the options? What's the color? What's the odometer? Key word here, guys. Key sentence. And how much are you selling it for? Keep it a positive. How much are you selling it for? Not what do you think you're going to get out of it? Not how much you hoping to get out of it. It's their vehicle. What are you selling it for? I'm selling it for $35,000. Okay, great. Add that vehicle to your consumer information inside your CRM under the trade-in screen and put a big note in there. Hey, they have this vehicle. They're selling out right themselves. They want $35,000 for it. Because now what you're creating is you're creating yourself a run list, an internal run list that does not have the plus plus plus. Fees added to it with PSI auction transport. And now you're giving your buyers, your used car manager, your GM, your GSM, whoever, the opportunity to go pick up the phone and call this customer up and say, Hey, I see you're selling a 23 F one fifty. I could use a vehicle like that. I see you're trying to sell for $35,000. Hey, in the event that you can't get it sold for $35,000. I just wanted to let you know I'm a player on that rig at 32. Now, the one thing you don't know that this guy might have had it up for sale for two months already, three months already, and he's tired of every weirdo showing up to his driveway with his wife and kids there. Maybe he's done messing with it. And he comes back and says, Man, if you give me 33 grand, I'm in.
Renaldo Leonard (27:38): All right.
Chris Keene (27:43): There's your profit. Why? Because you don't have the buy fee. You don't have the transport. You don't have the PSI. You don't have the holding cost because it's taking your transport company eight days to get a vehicle to you. You don't have another $400, $500 wrapped into the vehicle. There's an option, guys. So takeaway number one, go into your CRMs today. Go look at every single customer you've had over the last week, two weeks, 30 days, however long you want to go back and look. And if there's not a trade in, look at what they're buying. Okay, fine. If they looked at a wholesale retail piece that you had that was a 17 model, you know, Chevy Colorado, okay, I get that. But if you had a guy that was in there on a twenty two model Jeep Grand Cherokee and we're not showing a trade in, maybe start digging a little bit deeper. See if they have a vehicle they're selling outright themselves. Worst case scenario, if it's a vehicle that they're handing down to their cousin or their son or their daughter, invite that customer to bring the vehicle back into your service department to get the thing ran through and have it prepared for the next person they're handing it down to. you're you're handing olive branches out left and right when you do that. And creating yourself a better culture of a place to do business with, not just on a retail purchase, but you're creating a partnership with the consumer as you should be wanting to help them. And everybody wins out of the situation. So I would strongly recommend guys Leveraging and utilizing, and I'll have Brett take this right here, this trade-in script, and add it to our website, LotttalkPodcast.com as a resource that you can pull from. This is free. I hand this out like Pez Candy. Anytime you want it, take it. Is it the end all be all? It is a silver bullet. No. But maybe it's a bullet you didn't fire off in a while. Gentlemen, thoughts, feedback.
Renaldo Leonard (29:36): I'm I'm tempted to call you a leprechaun because you just handed out a pot of gold and I ain't seen the rainbow yet, but you know, it's it's beautiful stuff, but I mean we really have to start being creative in order to find avenues to source inventory that is gonna be a win-win for us, and that script is gonna create goodwill. with customers in the in the community. So you get to elevate your status there at the dealership. But having a pool of vehicles that you don't have to go to the auction to purchase always a win. Always a win. But it goes back to the process. If you're not asking the right questions, you don't arm yourself to be able to source that inventory more efficiently. and you know make use of
Chris Keene (30:07): No.
Renaldo Leonard (30:25): All that money you spent to generate those leads, what's the average cost for lead today? Do you remember
Chris Keene (30:30): my gosh. I mean I've heard so many numbers. John, what was the last one we heard? Was it two something?
Renaldo Leonard (30:35): It's anyway for Yeah.
John Anderson (30:36): Yeah, was a little bit over 200, but there's a, yeah, like you said, depending on who you ask, it's a different, if I was a dealer, if I was back in a store, I would, I would do my math and I would understand how much it cost me. Guarantee you that guarantee you that right. How much time, how much time, and energy are we pouring in to try to get leads in and then, you know, you know, uh,
Renaldo Leonard (30:48): Absolutely.
Chris Keene (30:51): Yeah, there's no doubt.
John Anderson (31:00): Sorry, Ronaldo, I didn't mean to jump in there, but it is, I think the last time we looked, it was a little over 200.
Renaldo Leonard (31:06): Yeah. well, I mean it's just an opportunity for a dealer to to get more juice out of the squeeze with those leads that we've generated. But it you know, the the talk track that that Chris just presented, I mean, I I'd be I'd venture to guess that the majority of dealers aren't really taking that opportunity. But you know, the path of least resistance goes straight to the auction.
Chris Keene (31:14): Mm-hmm.
Renaldo Leonard (31:31): See what the run list is, throw that money out there. And then complain that it's going too yeah, you gotta pay too much money to to get those get those straight get those vehicles into the inventory. This is another option. This is another option.
Chris Keene (31:43): you know, another thing because you just like spawned a thought for me. one of the things that I would also highly recommend that dealers that you in and if you use Stone Eagle or anything to like that, you could easily find this measurement. But this is kind of to John's point about the shopper index that is increasing. Okay. The shopper index that's increasing, and we've got consumers out there looking at Looking at purchasing a vehicle, one of the things that I would tell you guys to do is look at your trade-in variance and your price variance. Now, what I mean by that is this: go look at your last 20 deals that had a trade-in. And go pull what the trade allowance was against the trade ACV. Trade allowance against trade ACV. And if that is a negative number, meaning our last twenty trade ins was an average of you know thirty thousand dollars in trade allowance, but our average ACV was twenty seven thousand. So we overallowed by $3,000. There is a coaching opportunity there for you guys to work with your individual contributors, whether it be sales BDC, work with your sales managers. It's a great coaching opportunity to identify where we're having challenges defending the trade value. Then I would run the same report, and these reports that like Stone Eagle and companies like that pulled directly out of your DMS, because this is where you want to pull it from. I'd run the same report on your contract price against your ad price. If your average contract price was thirty thousand dollars, but your average ad price was thirty-five thousand dollars, and there's that five thousand dollar delta there, there's another coaching opportunity on how to defend the value of the vehicle we're selling. See, sometimes the leakage is in house. Sometimes that leakage isn't you know that that terminology that gets tossed around.
Renaldo Leonard (34:01): And turn
Chris Keene (34:07): very loosely called margin compression. Sometimes it's a self-inflicted margin compression because we're not defending the value of the vehicle. We're not defending the trade values. I I want everybody to and I know this is going to sound extremely simple, but I want everybody think about this for a minute. If you have consumers inquiring on inventory, it goes to three basic principles that I've preached a million times over. Is it the money, the machine, or me? Well, if I have a consumer showing interest, raising their hand on a thirty-five thousand dollar vehicle. They're already telling you that's a vehicle of interest, so it's not the machine, and it's in a price point within their budget, so it's not the money. So it now comes down to a me problem. By running a trade variance and a price variance report and understanding what that delta is, there is coaching opportunities. to remove self-inflicted margin compression. I'll pause there, John. You threw some good stuff up on the screen here. Run with it.
John Anderson (35:14): Well, no, as you guys were talking, was just, you know, listen, uh, Back to your dealer, uh, back to your data that you showed, right? That, that math on that dealer actually compared to what we typically see pretty dag on good 28 % conversion trade on lead, right? We typically see a 10 to 12 % conversion, but they're still to your point, Chris, look at the
Chris Keene (35:34): Mm-hmm.
John Anderson (35:37): Look at the room, that's available. Right. And, and, and I, and I, and I would like to add, to your script, which I think is excellent. a lot of times we get asked by salespeople and I was just in a dealership the other day, training salespeople. A lot of times we get asked if you want, if your expectation is for us to reach out to the customer every day, every other day, what are some of the things that I can talk to the customer about without sounding repetitive? in asking them to the car, right? And so one of the other ways that I think is, I'm truly wanting to find out what's driving that customer towards the vehicle of interest, then I want to find out what their hot buttons and buying motives are. And one way for me to do that is simply ask them, what about this vehicle caught your attention?
Chris Keene (36:06): Mm-hmm.
John Anderson (36:30): What do you like on this vehicle as it compares to the vehicle you're driving now? And by the way, what are you driving now? Right. Very rarely will a customer not tell you what they're driving, right? They might tell you, no, I'm not trading it and then try to withhold the information. But very rarely, if you ask them, what are you driving now? Are they not going to answer that question? And then if they tell you, I'm driving a Ford Escape, right? Then I just further my questioning a little bit. I go back in for another
Chris Keene (36:43): Mm-hmm.
John Anderson (36:58): a question on them. And then I circle background and go, by the way, what year was the Ford escape you're driving? Right. And that's all. If I'm a manager to store, that's really all I'm looking for my staff to do is get in the CRM, enter in a year, make and model. Right. And then I take over, as a manager, or if you have a buyer, or if you have someone responsible for finding inventory off the street, then I take over.
Chris Keene (37:12): Mm-hmm.
John Anderson (37:24): and I put in a different type of call to that customer, right? Now I'm not trying to sell them something. I'm trying to give them something. I'm trying to buy their vehicle, right? And so when you talk about contacts, guys, let me ask you about this math equation. And I want your viewpoint on this. Has this math equation ever failed? The more contacts we make, the more, the more, the more attempted contacts we make, the more contacts we make. The more contacts we make, the more appointments we set. The more appointments we set, the more shows we have, the more shows we have, the more cars we sell. Is that math undefeated?
Renaldo Leonard (38:05): Kinda like Father Tom.
John Anderson (38:08): Right. Now, if you want to listen dealers out there, if you want to say we do this because that's what we've always done, then I'm going to say, praise God. If you're doing that, right. My point is, is if we're looking for more ways to have contacts with customers, there's another way. And a couple of them, right. I want to, you know, I want to find out, look, We talked about this last week, right? Nobody cares how much you know until they know how much you care. So if I'm asking them questions about what caught their attention on the vehicle they sent me a lead on, I'm trying to find out I care about what they're interested in. And then and then I want to give them information on what they're interested in and I'll save them time if I'm giving them information on that. So look, these these are all these are all small but important things. And they add up just like the sourcing we're talking about. Look, if you guys. I know most dealerships, you guys managers are busy as hell, right? You're wearing multiple hats, but you've got to include in on your daily routine areas for me to have an opportunity to source inventory, right? What are we sourcing off our service drive and how can we get better at that? What are we sourcing off the street and how can we get better at that? Do I have, when I pull open my website, when I pull open in Google and I'm searching for my dealership and I look at When I pull open that Google before I even click on my website, do I have right in that, right in Google that will buy your car or sell us or something to the fact that the customer knows that you'll buy inventory, right? All these little things make a huge difference. And the reason why I put this chart up is because if you look at so far this year, the wholesale value retention index for those listening, it's at 104 call it 105 % in it. And it's
Chris Keene (39:33): Mm-hmm.
John Anderson (39:56): And it's above every year previous. And it goes all the way back to 2014, 14 through 19 and 23, 24, 25, 26. And at this time of year, it's the retention index is 105 % and it's above every other previous year. So why in the world? And again, nothing against auction folks. There is a need and I'm not hammering auctions, right? I'm not. So I don't want to get in trouble. If auction gets mad and reaches out to us, right? I, my point is, is that look, I'm going to fill a hole. If I've got a hole that I can't fill, then I'm going go to the auction, but that shouldn't be your first choice. Right. And, and if you've got, if you've got, if you've got leads, if you've got leads on a vehicle, right. What, what. Why in the world would I not follow up on those leads and try to get that inventory sold? And in the meantime, also find out every possibility that I can that there's a trade on that on that on that vehicle so that I have an opportunity to offset that bring a bring vehicles in. We looked at a dealer. We looked at a dealer this morning that has a average cost of market of one hundred and nine percent on his used car inventory. Guys. The math doesn't math. It just doesn't math. Let's be honest. If I've got 109 % cost to market, that means in order for me to try to make money on my inventory. Now I don't, there, there could be some fees in there or, or pack that he's got in that number. But the fact of the matter is I've got to go to market at 110, 112, 114. If you, most dealers would like to, they typically mark up on an average of 10%, some 20. Right. But let's think about that. 109, I'm marking up 10%. I'm asking 120 % on average for my inventory in today's market. Am I increasing my chances of sell vehicles or decreasing when I'm asking 20 % over average market for my inventory to try to make money. Right. So we've got to counter some of these things that are happening at our store. And so one of the things to look at is exactly where Chris went. Right. If look at the leads and look at your leads and how many have a trade on there. And I'm going to try to grow that percentage. I can't take it from zero to a hundred overnight. But if like this dealer right here, they're at a 28 % average trade on lead. Can I get that to 35 % by the end of June or 40? And then can I get it to 45 or 50? Then can I get it to 55 or 60? And now I've got my own personal buying lane. And look, if I've got a trade on a vehicle versus going out and replacing that vehicle at auction, Would I be more aggressive? And if it's a, if it's a trade that works for my inventory, it's something that I've sold before and I've done well with I've sold it in under 30 days and I've made money on it. Would I, would I stretch my legs on that trade and try to, uh, try to give a little bit more for it? Well, of course I would because I'm still avoiding 105%, uh, uh, index and, and auction fees and transportation. So look, We're throwing a lot out there this morning, but look, there's, there's the, have to do all the little things to make the big thing, the main thing. And that's having inventory. Cause everybody's yelling about sourcing is having inventory to sell. then focusing on selling it, in the first 30 days, by I get a lead or I have a switch opportunity. if look, If, if what percentage of your inventory doesn't have a lead or a switch opportunity on it, those are the ones that I want to go attack and look at my merchandising and my pricing. But everything else, if I've got a customer on it, or I have an opportunity to put a customer on it, then that's where I want to focus my attention, not consist consistently getting in there. You know, I hear dealers all time say, irregardless, I change the price every five days. Why? Why?
Renaldo Leonard (43:52): We've always done it that way.
John Anderson (43:53): What, what, what, what is that? What does that strat? How does that strategy help you retain gross and improve your margin by changing the price every five days? It doesn't. And, and don't think for a second with the amount of research that customers do out there and the tools they have in their, in their hands, that they're not, they don't pick up on that as well and sit there and watch you. I'm going to ask every dealer out there, any salesperson manager dealer that's listening to our podcast. Have you ever had a customer walk in your dealership and say, I've been watching that vehicle for two months. I just waited until you got it to a price I wanted. And then I come in to buy it. I think everybody, I used to have that happen and I would go, dang it. Right. Because they're, they're just sitting, they're just sitting there watching you change your price on a regular basis. And they're just waiting you out. Remember they sent out leads on 11 other vehicles. So yours is one of 12 and they're just watching everybody waiting. Well, you're going to get it close to where I wanted that. And then I'll come in. Right. So, man, there's just, there is a lot of small stuff that adds up to.
Chris Keene (44:32): Ha ha ha.
Renaldo Leonard (44:39): Mm-hmm.
John Anderson (44:55): big results, especially look, we're talking about right now. then July and August, it's going to change because shopper index is going to pick back up and things are going to change. Right. And then after August, guess what? Shopper index is going to drop and it won't pick it back up until the end of November, first part of December. So your strategies have to be liquid. As this changes, we have to be proactive in how we're approaching things. But if I go into July and August and I'm sitting on a bunch of aged inventory, guess what I'm going to sell? A bunch of aged inventory. And then you're going to complain about, can't make any money. Well, is that a, is that a, is that a we problem? More than likely it is. And these are all the things that we feel Chris, Ronaldo and myself from our experience and what we do. And you may talk to somebody else and they may
Chris Keene (45:26): Mm-hmm.
John Anderson (45:46): Look, there's a lot of different ideas out there in the marketplace, right? There's a lot of different ideas, but here's one thing that'll never change. You get a vehicle in inventory, whether you traded for it, you purchase it off the street or you purchase auction. Now what?
Chris Keene (46:00): You own it. Roll with Analdo.
Renaldo Leonard (46:04): If you own it, you gotta get it to the market. You gotta let everybody know it's for sale. Right? And starting, you know, blocking a tackling. Have we taken pictures that are gonna show this vehicle in its best life? Are are we showing pictures of vehicles that have the Sahara Desert underneath the hood? Yeah, I ran across that the other day, by the way. It's like what? Why would you why would you let somebody know first of all that that you don't detail a vehicle completely? And then why would you tell show somebody that vehicle in that type of condition and expect them to come in to purchase that vehicle without asking right out of the gate how much you're gonna come off of that one? So yeah, you you gotta merchandise it to generate the lead activity. And once the lead activity comes in, You gotta work it. You gotta give them a reason and you gotta earn the right to ask for their business.
Chris Keene (47:00): But you you you gotta do it right the first time though too, Ronaldo. I mean it's that vehicle, you you can't you put some pre roll photos out and you identify that vehicle, hey, it just arrived, fresh trade, whatever. That's one thing. But we're not gonna sit there and allow a vehicle sitting on lean on the front line with a low tire. We're not gonna put a vehicle on the front line under a brick and mortar dealership, beat to hell. Why would we do that in the digital dealership where we're gonna get exponentially more traffic than we do at our brick and mortar? So to your point, yeah. Get it out there, get it merchandised, and get it done right the first time. Because the you know, a as Eminem says, you you got one shot, you got one opportunity, you know. And it goes back to the old it goes back to the old
John Anderson (47:41): you
Renaldo Leonard (47:41): Mm-hmm.
Chris Keene (47:51): the first impression. You got one shot, you got one opportunity, guys.
Renaldo Leonard (47:54): Absolutely. Yeah.
John Anderson (47:55): And you're, and you're not going to ignore customers on your bricks and mortar lot either. If they're looking at a vehicle, you don't ignore them. Right. And you don't do this either. You don't, if you're looking out your window and a customer's looking at one of your vehicles and they're out of their car and they're opening up the doors, you don't grab the salesperson real quick before they walk out and greet your customer and go, Hey, go out there and tell them, I just lowered the price. 500 bucks. You don't do that. You don't do that.
Chris Keene (48:02): No.
Renaldo Leonard (48:20): Okay.
John Anderson (48:22): That's what we're doing. That's what we're doing every day, all day when we're lowering prices that we've got customers on our inventory online. Right. Right. Right. Now is everybody looking at your inventory? I hear, I get it guys. Well, not everybody look at my inventory can buy or is a buyer. I get it. Right. If you've got a ZO sex, if you've got a ZO six or a hellcat or, or, or a TRX or something like that, you got every.
Chris Keene (48:28): Self inflicted margins oppression.
Renaldo Leonard (48:31): Mm-hmm.
John Anderson (48:49): want to be, excuse my language, but that's the case. You got a lot of dreamers that are looking at that inventory. get it. But we still have to communicate in a way that we understand, communicate one with the customer and then have internal communication. Too many guys, let me ask you a question. Too many times do we see we got our sales managers up here at the sales tower and they're doing all things sales management. And trust me, I understand, man. You guys are wearing a gazillion freaking hats doing a million jobs, right? And then we got our team over here and they're talking to our customers and the two, the two sides of the dealership typically don't know what's happening with each other until that customer stand on the showroom floor. Well, what about all those customers that aren't standing on the showroom floor? What, you know, what, what's, what's going on there? Right? Do I have a serious buyer? you know, I gotta know that I want to know that on every, if I've got 10 leads on a vehicle, I want, before I even consider changing a price, I want to know if I've got a potential. buyer on that vehicle, right? Because I, to Chris's point and Ronaldo mentioned earlier, margin compression, the more I lower prices, I'm just compressing my margin and I'm not giving the opportunity for that consumer to do business with me. So man, there, you know, again, look, go ahead, run all, I'm sorry, Bob.
Renaldo Leonard (50:04): Well no I was just gonna say, just to add to your point, you know, if I got ten leads on a vehicle, and and I might be a little egotistical, and it might have helped me out as being a sales professional, but if I think I got ten shots at selling a vehicle, I'm gonna get one of those hung.
John Anderson (50:22): Yeah.
Chris Keene (50:22): Mm-hmm.
Renaldo Leonard (50:23): But if but if I've got I've got ten leads on a vehicle and all of my salespeople are telling me we got nothing there, you better bet your sweep behind I'm gonna call every last one of before I cancel them out of the CRM to s to make sure that I inspect what I expect and that I give an opportunity to run into a salesperson.
Chris Keene (50:42): Absolutely.
Renaldo Leonard (50:43): It's the basics.
John Anderson (50:44): Look, I look, I feel like, look, I know something because we, I think we do this in a way that we're all, the three of us are accustomed to how, how we were managed and, and through that, right. It's just like, as a child, you're raised by your parents and that's what you know. Right. And how we were managed, we manage. Right. And so we're very, I think. We're very direct. Um, and sometimes, you know, I look, I don't want any of this to come across, uh, as, uh, us sitting here saying, well, we did everything perfect and you guys are a bunch of dumb asses. That's not the case at all. The, the luxury, right. Big time. I got my head bashed in, but the luxury, the luxury that I have now is that I'm able to sit.
Chris Keene (51:25): No, we learn by error.
John Anderson (51:35): And on a weekly basis, my job is to work with our dealer partners, jump on calls, do calls with coaching calls with, and then, and then we have a team meeting every Friday and we're able to discuss on a weekly basis and look at how, what was the Chris, what was the numbers of price changes that we're engaged with or inventory we're looking at on a weekly basis? It's some astronaut.
Chris Keene (52:01): It's over ten thousand it it's over ten thousand price changes a week.
John Anderson (52:05): So, so it's out of this doing this for 10 years that I've seen the success and the, and the, the success and the failures. And, and it's pretty consistent on the successes and the steps to the process that lead to that success. And, and, and and hear me out. It doesn't matter what brand it doesn't matter what location in the country. It does.
Renaldo Leonard (52:11): Yeah,
Chris Keene (52:24): Mm-hmm.
John Anderson (52:32): the, it's the, what we just said, it's I've got a vehicle in inventory. Now what? So it, we can say, well, I'm in a certain area of the country or this brand or look, it's the, the things that make you successful. And it's typically the small things don't tend to change. Uh, uh, when it comes down to, and, you know, I'm, as I'm saying that I'm sitting here thinking, well, that's because of the way we've always done it. that I'm not saying that I'm saying that being a, taking a proactive stance and, and looking at the small things that make a huge difference on the day in and day out is, is critical. And those strategies will be adjustable in this market that changes all the time. You know, I, I used to say this, one of the, one of the things I used to do that my, it would drive my sales manager insane. I'd have a good month and selling when I was selling cars and then, I worked my butt off and then, I would, I would do one of these, had a good month, right? I made good money, worked my butt off. And then I would exhale for a couple of days, in the pre like we're in June 1st now. So I might exhale for June 1st, 2nd and 3rd. Right. And I would tell myself, well, I'm just kind of resetting my administrative stuff. Right. Well, then I look up and it's June. I look up and it's June 4th.
Renaldo Leonard (53:47): Yeah.
Chris Keene (53:51): Right.
John Anderson (53:54): I haven't sold anything and I haven't done anything to start that role. So then it's now it's now it's June 5th, 6th and 7th before I get that role coming back. And I've lost a week of that next month because I decided to. Right. And that's all I'm trying to say is as dealers, we got to stop that. It's day in and day out activities generate activity. And so we can't do that. We don't have that luxury, not in today's and not in today's economy.
Renaldo Leonard (54:23): Right.
Chris Keene (54:24): And you know, as we we're gonna we've gone a little bit over, but as we come to a close here to put kind of a bow on where this conversation that the second part of this conversation that John started when he was talking about, you know, hey, I was at a store and people look at me going, What do I say to these people every day? You know, I'm gonna give you guys one more takeaway and again, you know, I'm I'm gonna get with Brett to make sure we get the stuff posted out there, you know, at Lott Talk Podcast dot com. Here's you another piece, guys. For the viewers, you can see it. For the listeners, I'll explain it. It's the good old acronym of SPACE: Safety, performance, appearance, comfort, economy, dependability. If you want to know what to talk to your customer about every time that you do follow-up with them, two things to stay away from.
John Anderson (55:00): Good stuff.
Chris Keene (55:18): What time can you be here this morning or afternoon? Asterisk on that. I'm not telling you don't ask for an appointment. I'm saying ask for the appointment when you've earned the right. Second question you want to stay away from, are you still in the market?
Renaldo Leonard (55:36): Okay.
Chris Keene (55:36): Stay away those two. But in your initial contact with them, whether it's email, text, phone, identify is safety most important for them, is performance, is appearance, is comfort, is economy, is dependability. Is it a combination of two or three of those? And if you know that comfort is one of their driving factors. You could kill two birds with one stone. Stone number one, or the first bird you could kill, is you could find out about the vehicle that they're replacing, what comfort features it had that they absolutely loved, and what comfort features does it not have that they wish they had. Which means the vehicle of interest, if it has what they've been missing. You can speak to those comfort features that they'll be getting in their new transaction. You can speak to the comfort features that they loved about their old vehicle with the new vehicle. So they're not going to miss anything, but they're going to gain something. If you understand safety, performance, appearance, comfort economy, and dependability, you will never have things to run out of to talk about when you go to follow up with your customer. But what you will do, hear me close on this.
Renaldo Leonard (56:40): If you understand
Chris Keene (56:52): You will separate yourself from the pack because the mass majority of everybody else is saying, What time can you be here this morning or afternoon? Are you still in the market for a vehicle? But if you come in, as your title may say, as a consultant, as a professional, and you actually bring value to them. You're a cut above. And when they get down that funnel, who do you think they're going to talk to? The guy who keeps finding out when they're going to come in? Or the guy that's provided them all the necessary information that they need to make a logical buying decision? It's going to be the latter.
John Anderson (57:13): Absolutely.
Renaldo Leonard (57:25): Yep. Hey Chris, it's not that difficult to do because think about there's those twelve people out there and what's the question they're asking? When can you come down?
Chris Keene (57:26): So go ahead. It's all the same. Yeah. I mean, it it's all the same. It's frustrating. So all that being said, I'll get with our producer Brett. We'll get some of these resources put out there for you. Lottalkpodcast dot com. Gentlemen, this has been a fantastic conversation as we help our dealers in Q2. As we get into the selling season, as we're seeing the shopper index.
Renaldo Leonard (57:37): Yeah. All of us.
Chris Keene (58:01): start to yield back the way of our dealer. This is great information here. And I hope you viewers and listeners have taken a lot of notes. And if you haven't, go back in and replay this episode. Share this episode because you, as the listener, are not the only one that needs to hear this. Let's get ourselves watertight and bulletproof before the selling season gets here. Because if we've got these things watertight when there's that downshift in the market, you're ahead because you've instilled the good practices during the good times when sometimes those little lazy attributes can be hidden because the market is in our favor. So let's let's do the good things right.
John Anderson (58:35): Yep.
Chris Keene (58:48): when the times are good, so when the market downshifts, you don't miss a beat. On behalf of Mr. John Anderson, Mr. Ronaldo Leonard, our entire family here at Lot Pop, we thank you for tuning into Lot Talk, and we will catch you next week, same bat time, same bat channel. With that, we out.
Renaldo Leonard (58:52): Yeah.
