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New car searches are down nearly 50%, the market average days to turn just jumped from 51 to 53, and 300,000 off-lease EVs are flooding into the used market. On this episode of LotTalk, Lotpop coaches Chris Keene and John Anderson break down why the 30-day car and the 100-day car are now two different businesses inside your dealership, and why each one needs its own game plan. They cover the affordability shift pushing buyers from new to used, the CPO opportunity most stores are ignoring, why market day supply stops mattering the moment you own the car, and a real CRM story about a $79,000 lead that told the store everything and got ignored. Plus: the 65% first-30-days benchmark, contact gap coaching, and how to turn stalled leads into acquisition opportunities. Want a free walkthrough of your inventory tool or CRM? Visit lotpop.com/estimate.
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What is LotTalk Podcast powered by Lotpop?
LotTalk powered by Lotpop, explores timely topics in the automotive industry with weekly updates and features guests from various sectors of the automotive world. Learn more at www.lottalkpodcast.com
Chris Keene (00:05)
Folks, we are back. You are here. You've tuned it in. This is Lot Talk Powered by Lot Pop. I'm Chris Keene, one of the co-hosts. Also joined by the notorious Mr. John Anderson. We're missing our brother Ronaldo today. He is
John Anderson (00:19)
Yeah, yeah.
Chris Keene (00:20)
in the trenches. He is out there, John, right now, just knee deep with our dealers first as our number one core value at Lop Pop. It's always been dealers first. And hey.
We have fun on these calls, John. And it's it's always great when it's the three of us. But somebody gotta sit back and and stay on top of our dealers. And what better person to do it than Ronaldo? thank you, Ronaldo, for for doing that. Thank you for you know the dedication and work you're putting in with these dealers. We appreciate it. We'll hold the front down here the best we can without you. And folks, I promise you this when you see him come back, he's got the beard coming.
The beard's gonna be back. You'll see it. It'll be back live and in person. But until then, we're gonna do our best to keep you educated, to give you some knowledge, to give you some takeaways, to maybe even keep you a little entertained. But you're gonna have people, and then you're gonna have me, and there's no telling. Hopefully nothing sets me off and I don't fly off the handle today, John. But
We'll try to write it in the best we can. That being said.
John Anderson (01:24)
I'll figure something I'll figure something out.
Chris Keene (01:29)
That being said though, John, you right before we went live here, you were just sharing some great articles of some things going on. And to be quite frank, viewers, listeners, the things that are top news right now, we have a lot of insight toward. So buckle in.
Get your pen and paper ready because these topics that are out there, like I said, guys, we have a lot of insight to this. We coach on this on a daily basis. I guarantee you right now, our team is having a conversation with one of your peers in the market, whether it's Canada, whether it's the United States, we're having a conversation right now around these topics. John, fire away.
And and share some of what came across your briefing this morning.
John Anderson (02:18)
You know, this is something that we talked about, you know, several weeks, just I mean, I like it when we get on here and we just you know we just talk. I I know I know we have to plan things, but I do like when we're just we're talking about hot topics. You know, it's funny 'cause this is where I this is one of the areas I involve AI, right? I let AI do some of this work for
Chris Keene (02:37)
Yeah.
John Anderson (02:38)
me, right? So I I you know, because it that
Mr. AI can search a hell of a lot faster than than people, right? So so yeah, so I thought it was interesting. and it's something we've been talking about for a few weeks, right? buyers are slowly shifting from new to used, right? and I think
Price point, right? We've talked about that. We said that was it last week or
Chris Keene (03:08)
Affordability.
John Anderson (03:09)
yeah, the week before, right? The on used cars, the difference in turn on on price point, right? Above thirty five grand.
Chris Keene (03:16)
Mm-hmm.
John Anderson (03:17)
and I think you're seeing the same thing. I think buyers are starting to see value and used cars because of the price point. and so there was an article in here from TrueCar CEO Scott Painter.
and he was just talking about true car is down nearly fifty percent on new car searches. Think about that for a second. That's a big number. 50%. Yeah.
Chris Keene (03:43)
That's a huge number.
John Anderson (03:45)
Yeah, I was surprised. Yeah. Bloomberg this week, new car searches on true car down nearly 50% since tensions in Iran have escalated. Right? So you think about the price point, you think about
gas prices still up there, right? But I was surprised, I was really surprised that that percentage was that high. one thing that's countering
Chris Keene (04:03)
Wow.
John Anderson (04:03)
that go ahead.
Chris Keene (04:04)
No, I was just like, wow. I mean I'm I'm still trying to wrap my head around that fifty percent. And when we think about what we see out there, you know, in I in the data that we're privy to, and how that new car number of what's available in the market that we see through, you know, two of the yo big boys out there, AutotraderCars dot com, how that number has stayed really static. And of course you can see when
Dealers are getting, you allocation dropped in on them, you know, that they ordered, you see a little peak in it, but you're not seeing big dips in it to where a lot of new cars going out. You're seeing a constant trickle of that inventory coming in. And if new car search is down that far, and if consumers are shifting to the used car because of affordability.
I mean, there's a couple things that I literally just had this conversation with the dealer yesterday, their Volkswagen store. Conversation I had with them. yeah. I mean, if the car qualifies for CPO, then we'll CPO it. I'm like, okay, well, why wouldn't you CPO it now? Because you're telling me a new Volkswagen Taus is thirty thousand thirty thousand dollars, but a two-year-old Volkswagen Taus is twenty-two, twenty-three thousand dollars. And we're looking at one in your inventory right now.
That is $22,000, $23,000. And with that vehicle being $22,000, $23,000, that degree of separation between the monthly payment of that two year old Volkswagen Talus to that brand new $30,000 one, if the customer is looking saying, I need, I want to buy a car, and the $23 is an upgrade for them, and they really want a new car, but they can't get one.
Because it's too far out of their budget, inflation has gone way through the roof, and wages haven't caught up with it. Then why wouldn't you, off the rip, if people still want new cars, maybe not as much, maybe they're not searching for them as much, but we still have consumers walking in the doors wanting to buy new cars and they can't, why wouldn't you be in the CPO business?
From day one. Y you know what I mean, John?
John Anderson (06:09)
Yeah, and I think you've got you have an you know you have an excellent opportunity for that in this market. So yeah, I I think I think that's I think that's as people start as people transition and he goes on to say that he his prediction is is that use supply tightens and pushes used prices and residuals higher.
So yeah, so I mean that's a prediction that's a prediction, but that's based on what he's seeing in his data through his company, right? And the fact that people are shifting, right? Now a lot of that shift is coming from E V hybrid, right? As we've been talking about several weeks on here, about the about the push of off lease twenty threes coming into the market, and that number is still three hundred thousand by the end of the year.
So
that's where a lot of that and as as I looked and we'll talk about it, but you're you're seeing a lot of you're seeing a lot of demand in the marketplace for for EV units now. That's starting to shift, right? It's it's interesting what a difference a year makes, right? Because they were talking about that last year, and and I personally remember myself thinking that
Isn't we're not ready for this yet. I I you know, everybody was pushing E Vs and and I'm like I just felt personally no there was no rhyme or reason. I just felt personally that people were not gonna make that shift. Now there were a lot of reasons for that. now you've got a shift in gas prices and things like that. so
So I think people are now open to that now and pricing, right? Because when we looked at this a couple of weeks ago, the average price was around twenty-six grand on on those twenty-three off le off lease EVs, right? So that fits in that under thirty-five category. Right. So there's a lot of reasons why I think that interest is shifting to that used EV now, from an affordability standpoint. It's amazing what'll happen when
when affordability takes over desire. Right?
Chris Keene (08:18)
Yeah.
John Anderson (08:18)
Because you see that shift in our market occasionally, right? When when affordability's not typically people don't see affordability as a factor, then they're they're a lot more open and you see that ebb and flow of luxury SUVs and big pickup trucks and stuff. Now all of a sudden they start taking off, right? You look at those things now and they're sitting
They're just sitting and they're aging because affordability is a factor. which kind of leads in
Chris Keene (08:46)
It's a huge factor.
John Anderson (08:47)
Yeah, yeah. Right now, right? It do it's not always that way, but but right now it's a major player. And that brings me to
Chris Keene (08:54)
Well, it
it's but i you think about this though, John, on that new car side of things, okay? Think about your most recent purchase of an automobile. You bought something that wasn't even a thought, and during one of our podcasts, I had made the statement that normally Chrysler is the first one to jump off a cliff.
And start doing these huge rape rebate combos. And then General Motors and Ford are just sitting around staring at each other, going, Okay, you gonna go next or I'm going next. I mean, you know, who's who's going next? You know? So, cause I could remember before COVID, it wasn't unusual to see a half ton truck or a a heavy duty truck, you know, advertisements going out there, twelve, fifteen thousand, twenty thousand dollars off these trucks, you know.
15% MSR off MSRP, stuff like that. There was big margin because there was big rebates, there was big incentives. Well, then I'd brought up the fact that, you know, hey dealers, you know, pay attention to the Rams. If you start seeing these Rams at the auction and you're like, my gosh, this thing's a book cheater. Well, there's a reason it is because the new car side of it, they now have longer terms.
Low incentivized rates, 0%, 1.9, 2.9, 3.9, and $3,000, $4,000, $5,000 worth of consumer cash. So they jumped out there with that rate rebate combo. All of that to be said, John, with you know that affordability side of it, I think you're seeing a lot of people being forced to turn to the used car side because there is not an enormous amount of incentive to offset.
for the wages that did not increase at the same rate that these vehicles increased. And and I still believe that in twenty twenty six or twenty twenty seven, you know, if some of the prediction about the Fed coming in, making another adjustment to Prime, and the more that we see, you know, that opportunity of Prime come down, then you'll start seeing more of that incentive go across the board.
Yeah, with the manufacturers, then we'll start seeing that new car being affordable again in some way, shape, or form. But until then, as a dealership, we can't wait for that. Because there's still demand and there's still need for consumers to upgrade their vehicle, to buy another vehicle. And the biggest thing, like the dealer you spoke with today, and like what you're talking about in these big heavies.
Sitting around, whether it be a price point, whether it be a model. If you don't know which direction to go in replenishing, or like we say here at Lop Pop, feed the beast. If you don't know what to feed the beast, what type of inventory to bring back in to align with your market, not align with the day supply number. I know that right there, I'm gonna say it again.
Don't it's not necessarily aligning with the day supply number. The day supply number is a good number to know, but it's not the end story. What the end story is, is understanding how your store in your market with your people, how you sell. That's what's most critical. And I think that's where you were leading to, John. Sorry, I I kind of rambled there. not rambled,
but a
John Anderson (12:08)
it's
no it's all good, brother. No.
Chris Keene (12:09)
Maybe took it a different direction than you were going.
John Anderson (12:12)
No, it's all good. This this is this is excellent discussion because here, I give you the 'cause you referred to that dealer. So what I thought was what I thought was extremely and I was thinking about this while you were talking this now, what I thought was extremely
Puzzling to me was a majority of the inventory at this dealer had multiple, multiple leads on it.
And I was asking qu yeah. And I'm talking about these heavies that you were talking about, right? So I was asking questions about what's going on with all these leads, right? And I'm see Chris, I'm I'm I'm seeing one and two day contacts on these. So it's not like they're n now
Chris Keene (12:47)
Not Colin.
John Anderson (12:48)
well, here. Now they did have they had fifty four leads that needed a contact today, in stock, right? They needed they hadn't been contacted in three days. So it was a fair amount.
But but when I popped open these individual vehicles and looking at contact attempted contacts, a lot of these leads have been contacting the last day or two. So I'm like, and they're have multiple leads on these cars. And I'm like, what what is going on? And and the owner was on the call and he made the comment, Yeah, we're getting lots of leads, but we can't just get we can't com get committed to coming into the store. Right? And and so
You know, obviously my first question was, Well, how how involved is management? Are you picking up the phone and you're talking to these customers, right? Not relying on your sales team, right? And and I got I got kind of a an an iffy answer on that. But I was thinking about that while you were talking, right? When you know,
Look a a lot of these things that are going on right now that we see and and the hesitation in the marketplace, right? And why another thing I was thinking while you're sitting there talking is I wonder how many people that are buying.
Is it a true need, right? Or is it a want? And I would still submit to you that the true needs are the lower percentage, right? You still have people out there buying because it's just a want, right? And so if if the facts that and we have no reason to refute this, we we've brought this up before, right? That the average customer sends out 12 to 14, 15 leads when they enter into the marketplace, that still blows me away.
Chris Keene (14:16)
And that's still
that's still a recent number because I heard it from another source and I said, Hey, what was the date on that? And I think they said June of this year.
John Anderson (14:25)
It still blows me away. Think about that. That's a lot of w I I just I guess I'm probably relating myself to that. I wouldn't send out that many leads, right? But I'm I'm just one person, right? But I wouldn't. I I Yeah, that's true.
Chris Keene (14:35)
Yeah, but you're also in the business, John. I mean, you don't
you you've got the capability to see a lot of inventory
John Anderson (14:40)
That's a lot of work
though, brother. That's a lot of work. Maybe it's
Chris Keene (14:44)
But they do it.
John Anderson (14:46)
bec maybe it's because they have to maybe and no no offense, dealers, but I mean I'm just speaking I'm being transparent here 'cause we s we see this a lot. Maybe they feel like they need to send that many out so they can get an answer.
Chris Keene (15:01)
That's valid, John. But to also clarify on that average of twelve, I mean, one dealer, you could get you could get two to three different submissions from that customer because they're on two to three different cars, okay,
John Anderson (15:12)
yeah. yeah. Yeah, definitely.
Chris Keene (15:15)
from one dealer. But it doesn't matter if they're on two to three different cars, John. I I believe wholeheartedly because to
Your point there of that dealer saying, Man, I don't know what the deal is. We can't get people to commit. You know, and you're looking at the contact gaps and they're not atrocious. And for the listeners and viewers, when we say contact gap, from the time that you called the customer on X day, how many days before you called, text, or emailed the customer again? That's what we talk about with contact gap. And that
John Anderson (15:44)
Right.
Chris Keene (15:45)
is a number you should understand inside your store. Okay.
John Anderson (15:49)
One hundred percent.
Chris Keene (15:50)
But
John, I was on site on the East Coast with some dealers last week. And going through their CRM, they had really done a good job improving their contact gaps. And it does become puzzling when you're sitting there looking at it going, Okay, I don't understand. So I I I got into their CRM with them a little deeper and I took some managers and I took the general manager.
And we got it up on the big screen and we start pulling it all up. There was a customer that they got in from Auto Trader.
And the customer put in the vehicle was listed at $79,000. The customer changed the price of the vehicle from 79 to 78, put it on seventy-two months, took out the took out the auto populate, because I think auto trader does like twenty percent or whatever the down payment was, and put it to zero dollars.
So it was seventy nine thousand, customer moved to seventy eight, customer changed it to zero down, customer put it on seventy two months, and customer selected that their credit was very good.
Pause right there for minute, folks. Listen to what the customer's telling you. They're already telling you a payment is important. Why? Because they're working the payment calculator inside the system. Okay.
John Anderson (17:06)
Right. Right.
Chris Keene (17:08)
So they're telling you that. They're also telling you that the vehicle, yeah, though listed at 79,000, they put it in 78. Now, as a reminder to everybody.
When that submission comes across, it's a canned submission. Is this vehicle still available? So put that thought to the side for a second and then now listen to what the replies were back to the consumer.
Great news, John. Vehicle's still available. Thank you for shopping with us. Blah, blah, blah. When's a great time for you to come down and take a look at it?
John Anderson (17:34)
When can you be here with your when can you be here with your trade?
Chris Keene (17:36)
Okay. That was the honest guy's reply. And then there were two or three more that were like that. There were two or three phone calls that were made. So yeah, they were reached out to the customer.
But here's the other part. The dealer was located in New England. The customer was located in North Carolina.
And nowhere along the way did we ever address with the customer that the vehicle was priced at seventy nine seventy eight, zero down, fifteen fifty two a month. Nowhere along the way did we talk about that.
So for the dealers wondering, shit, Chris, we're calling, we're texting, we're emailing, we're not getting anything back. Okay, look at the quality of the follow up you're getting. If
John Anderson (18:13)
Yeah. Yeah.
Chris Keene (18:14)
if we have less customers in the marketplace, if our new car business is how cut the number from what True Car said at 50% search decline, cut it to 25%.
If you have less search going on out there, if if new if business is shifting to use car, and if it's a want, well, there's an emotional purchase, then why are we not meeting the customer where they're at? I that it's to me, John, it is a problem that yes needs to be solved, but it's not rocket science.
John Anderson (18:52)
I
you know, I look, I think we have a tendency in our industry to get mechanical sometimes, right? Because we're we're it it's what we do every day and and so I'm not making excuses. I'm just being realistic. Sometimes it just gets mechanical. I gotta lead, I'm gonna judge you know, to your point, right? And that's where I'm glad you brought that up because that's real where I was really going when you were talking about I was thinking about, right, are we
How much more
How much more ground can we cover?
with inventory throughput, if I know that we have a lock tight process on contacting our customers. One that we're doing it in a cadence that is relentless. So for us what we coach on is on a in stock lead every three day attempted contact. Cause you're not gonna
You're not gonna contact your leads every time you reach out to right? And Chris, I keep saying this. You tell me you've been in the business a long time like myself. One piece of math that I don't think has ever failed is the more attempted contacts we make, the more actual contacts we make. The more actual contacts we make, the more appointments we set. The more appointments we set, the more shows we get, the more shows we get, the more cars we sell, right?
So it all starts with attempted contacts.
Chris Keene (20:18)
But you have to add a piece inside there though, John, that is missing. And the piece that is missing inside there is yes, the more attempts that we make, but there's a key piece in there, the more quality attempts that we make, then
John Anderson (20:34)
Yes, yes, yes.
Chris Keene (20:37)
it's it's if we stop w I promise you, dealers, and this is gonna go against the grain.
If we stop being so concerned about setting the appointment and we move backwards
And we have more concern with creating engagement.
The byproduct of that is the appointment. Now, that appointment could be an appointment to go to their front door. It could be an appointment for them to come to your front door. But you're not going to get the appointment until you get the engagement. You're not going to get the engagement until you get the question.
Quality follow up and start listening and paying attention to what the customers are telling you. And sometimes you have to read the tea leaves. They're not gonna point like just tell you. You gotta look at the whole picture and understand where the customer's coming from. So I agree with you, John. The
John Anderson (21:32)
Good yeah. Yeah.
Chris Keene (21:34)
more throughput we have on that, but we gotta get quality and we gotta focus on the engagement.
John Anderson (21:40)
Let me ask a question out there. Managers, think about this for a second.
On think about leads that have come in. I guess managers that are involved in the lead process, because I know some of them aren't, but managers are
Chris Keene (21:54)
I hope they are.
John Anderson (21:55)
managers that are overseeing the lead process. Think about leads that have come in and and you've reached your sales team or you or your BDC has reached out multiple times and you've you've gotten zero response from that customer.
Just to ask one question, if you know, what time did that lead come in?
Do you know what time that lead came in? Do you even pay attention to that timing of when that customer sent you that lead? And then how what how are we responding? When are we responding, right? You got people that stay up all night and look at inventory and send leads overnight. You got people that work late, work till seven or eight o'clock, come home, they look and they send you a lead at nine or ten o'clock at night. And then are you respon is your is your rep responding
consistently, reaching out consistently at eight thirty or nine o'clock in the morning. And we're not we're not trying to reach out and meet that customer where they're living at, which they sent you a lead at eight o'clock at night. That's where they're living at, right? I'm not saying don't reach out to your lead at eight eight thirty or nine o'clock in the morning. Do that. But in that in that reach out, also tell them, hey, I'm gonna follow up and I'm gonna reach back out to you around eight o'clock tonight. I just wanna make you aware that I'm here's
Here's what I'm here's what I'm looking for, here's
Chris Keene (23:06)
Yes. Preach.
John Anderson (23:07)
what I'm asking for, but I'm gonna reach back out to you at eight o'clock tonight and then follow up with that. Right. That's what Chris is talking about is understanding and and providing quality, right? Because again, if I'm not getting a response, if a customer took the time to send me a lead and I'm not getting a response, there's something they're telling me by not giving me a response. And it could be just that simple thing is that they're not they're not around when you're reaching out to them or they're sleeping, right? So
Just little stuff like that. and and while we're on this, because Chris talked about, you know, we were talking about a little bit off air about acquisition, which we're gonna get there, but while we're on this, that's another thing too. how many how many people out there are taking the opportunity during that call to find out what the customer is driving or what else they have sitting in their driveway? Notice I didn't say ask them for a trade. I said
Chris Keene (23:59)
Nope.
John Anderson (23:59)
ask
I said ask them what they're driving currently and how does it compare to the vehicle that you're looking at with us? What do you like? What do you not like? And then do you have any other vehicles sitting in your driveway? Right? I'm not asking them for a trade. And so that's important because I want to drive those opportun if I've got a sourcing, if I have a sourcing problem, if I'm everybody seems to have sourcing problems these days, do yourself a favor, drive your percentage of lead or trades on leads up.
And use that as a buy lane for your team, right? That's where managers can get involved. If we're asking our team, and I'm saying when I say we, I'm talking about Lop Pop, if we're asking our dealer partners to make an attempted contact to our in-stock leads every three days and our switch leads every five days, one of those attempted contacts could come from a manager calling them, trying to give them something instead of trying to sell them something.
The contacts have been about selling the car that they looked at on or truck or SUV that they looked at with you up to this point. Now I'm gonna pick up the phone as a manager and I'm gonna offer to give them something for the vehicle they have in their driveway or the vehicle that they said they're driving now and try to buy that vehicle from them. They may say it's the only car that I have, and guess what you just did? You just opened up the door to circle back around and talk about the sale. But you did
Chris Keene (25:17)
Mm-hmm.
John Anderson (25:17)
it at a
You did it in a way that you're trying to give them something. I'm calling you because I'm interested in the vehicle that you have that you're driving now. We need inventory desperately. I'm interested in that vehicle. You didn't say anything about the vehicle they're trying to buy, right? And so I'm
just trying
Chris Keene (25:31)
By pr
the byproduct of that is is John, if I sell you my vehicle, I still gotta have something to drive. Okay, great.
John Anderson (25:36)
One hundred percent.
Chris Keene (25:37)
The salesperson that you worked with, I'll have them get back with you about replacing the vehicle. But
John Anderson (25:41)
One hundred percent. Or I'll move you
to right now. I'll get on the phone right now. Well just know that I'll be I'll be putting the numbers on this vehicle. I'll give them to them. You guys Yeah.
Chris Keene (25:52)
Let me spin that though. Let me
spin that, John. Okay, because typically that's what we do. Okay, well, here, let me get you back with salesman. Now we just turn it back into a transaction. Okay.
John Anderson (26:01)
You're right.
Chris Keene (26:02)
Okay, so let me spin it and consider this direction. Hey, no problem at all. We'll still be able to help you with the replacement vehicle. But again, your vehicle, you've agreed.
That the number I'm giving you is the number you'll sell it to me for. I need to do a final inspection on that vehicle. What time this afternoon or
John Anderson (26:23)
Yeah. Yeah.
Chris Keene (26:23)
this evening can you bring it in for a final inspection? I'll get you with Bob over there to help you with the replacement vehicle, but keep the focus on the acquisition, not the
John Anderson (26:33)
Good stuff.
Chris Keene (26:34)
sale.
John Anderson (26:34)
Yep, good stuff.
Chris Keene (26:36)
So you're not wrong though, John. So that this listeners and viewers, it is it is not wrong to sit there and say, well, hey, yeah, no problem. Let me get you back with Bob here and he'll take care of that. I'll I'll handle the you know acquisition of your vehicle, the purchase of your vehicle. Notice we haven't even said you're trading it in. We'll handle the purchase of your vehicle from you, and I'll get you back with Bob. There's nothing wrong with that.
John Anderson (27:00)
Yeah, but to your point
Chris Keene (27:01)
But you can take it to another level.
John Anderson (27:04)
Yeah, to your point I'd rather have and and you're right. I'd rather have at the store where they're physically there or I'm at their place of business or I'm at their doorstep sitting in their sitting in their li in
Chris Keene (27:15)
Yeah. I I I can't
John Anderson (27:17)
their right, having coffee with them and we're talking about it physically together. Yeah.
Chris Keene (27:21)
Absolutely. You know, hey, listen, you know, John, I can't make it by today. Okay, no problem at all. I noticed that you're 37 miles from me. It's not a big deal. I'm on the street all the time buying vehicles. Matter of fact, I drove 386 miles the other day to do this very same thing of buying a vehicle and doing the final inspection from this guy's job. Okay. So guys, listeners, viewers.
As I've said a million times over before, I live on the red dirt. I live in Oklahoma. And yes, we do have running water. We have electricity. Okay, we don't live in teepees anymore. Okay. We we're with the times.
John Anderson (27:56)
Maybe on your side, Oklahoma.
Chris Keene (27:59)
Okay, not your side. But here's the thing though. We're not a major metropolitan, so to speak, like Dallas, like LA, like Chicago, like, you know, Orlando or Miami or New York.
So you wouldn't really think Carvana. And I couldn't find my phone. It fell between my seats. I was driving down the road. And pulling into my neighborhood was one of those little infamous Carvana rollbacks with a brand or a new vehicle, new to somebody else vehicle sitting on the back of it. And you could tell it was for delivery because I mean tired dressing fresh.
I mean, it was good to go. It was ready to roll. It it had the paper tag on it too. Already had the paper tag on it. Being delivered to one of my neighbors in Mustang, Oklahoma.
A town that is two miles wide and six miles long.
If consumers in freaking Oklahoma will leverage and utilize Carvana
To bring a car to their doorstep.
Why can't you?
John Anderson (28:56)
Exactly.
Exactly.
Chris Keene (28:58)
Why can't you do the same thing?
So, you know, that that's where I was going with
John Anderson (28:59)
So in that con in that conversation,
Chris Keene (29:02)
that.
John Anderson (29:02)
no, n in that conversation, you know, we were talking about price point vehicles, right? And so
Chris Keene (29:09)
Yes.
John Anderson (29:09)
the other thing that caught my attention that I wanted to bring up with you is and I love the title of the headline, the thirty day car and the hundred day car are
now are now two different businesses.
The thirty day car and the hundred day car are now two different businesses. Some cars are gone in a month, others are sitting three times longer than average. And a wave of the
Chris Keene (29:30)
¿Qué dijo?
John Anderson (29:31)
slow ones is about to hit lots. Right. And so a lot of this a lot of this, Chris, was discussing discussions about EVs, right? Because that's that's the splash, right? There's more than three hundred thousand EVs off lease that are hitting
marketplace this year hitting the availability market right and so this was this was from IC cars right and so they're looking at their data and so cars like the Civic hybrid the Corolla the Kona electric leaf rx hybrid the model y Tesla right are turning in the low 30 day range
Well ahead of the 53 day market average. Now think about that number. We just talked about this last week. Last week that number was at 51 days. This week the number is now at 53 days. Right? So it's climbed two days in a week. and so escape plug-in hybrid, Nautilus Hybrid, Corsair, XE60 are sitting 90 to 170 days. So
Listeners and viewers, it's not that don't get hung up on the vehicles that I'm talking about. What hit my what hit me is the difference between and it goes on to say, do you know as an operator what your fast turning vehicles are versus your slow turning vehicles, right? And so I thought, Chris, this this was an excellent point to bring up because are you actually doing that?
Again, are we real man and I need to put the asterisk in about what I'm about to say.
Chris Keene (31:06)
Ha ha ha ha.
John Anderson (31:10)
I
love inventory management tools. Couldn't operate without them. So this is not a negative towards any inventory management tool. I specifically used one the entire time I was in the business and I and and I'm a I'm a I love inventory management tools. So this is not an in this is not an indictment on them. All I'm saying is are do you want when it comes to your inventory at your store, once you have
I'm not talking about what you're looking at. I'm talking about once you have it in stock, whether you purchased it or you traded for it, when it comes to your inventory, do you want to understand more about what we're doing at our store with those types of with with models, price points, miles per year averages? Do you want to know how we as a store handle that inventory?
Or do I want to understand what the market is doing with that inventory? And I'm gonna tell my story because I always like telling my story. As a general manager, I was in a town of twelve thousand five hundred people, that CDGR store I ran. And
Chris Keene (32:17)
Okay.
John Anderson (32:17)
there were two other stores in town on the drive down from Indianapolis to Bloomington, Deanna on thirty-seven.
If you looked when you came into Martinsville, Indiana, you looked on the left hand side, you would see our store first. If you were going south towards Bloomington, we were at the top of the hill, Community Chrysler. Then you're gonna see the Chevrolet store. I'm sorry, the Ford store. And then you're gonna see at the end of town, which if you blink, you're at the end of town, you're gonna see the Ford the
Chris Keene (32:42)
Yeah.
John Anderson (32:43)
Chevrolet the Chevrolet store, right? And we would have an off day.
And it would invariably one of my managers would walk in my office or when I was out at the desk, they would say, Boss, man, I we worked hard today, but I know we had an off day, but I called the Chevy and the the Ford store and they had an off day too. I wanted to pick up a chair and throw it through the window because I did not care. I did not honestly, and this is no indictment. I had great salesman, these guys were awesome. And I'm not attacking them. I'm just saying I I could care less what the Chevy and the Ford store did.
I care about what we did, right? That's that's my number one goal. What are we doing? Right. And so I compare that when you're talking about when I've got inventory in stock, do I want to know what we're doing or do I want to know what the market I I I I in the the work I did to bring that car in, I I kind of understand what the market's doing based on that research that I did, where I'm going to market at and all that stuff. Now, once I own it, now what? Right? I gotta understand. So do I know.
As a as an operator at a store, do I know my fast turning inventory right now today? If I ask you, divide your inventory up, where are your fast turn? What's your slow turners? And if we looked at if we looked at those, if we looked at those two separate businesses, as this article said, you're operating two businesses now, right? If we looked at those two separate businesses, would you have the same business plan and work plan for both those sides, or would they be different?
I'm just curious of you know how how we look at that as an operator in a store nowadays.
Chris Keene (34:14)
Mm-hmm. Mm-hmm.
So John to
jump on that a little bit more. Okay. And yes, any inventory management tool that you're on, you can go back in and we've we to this day still work with all the major inventory management tools out there. And John is a hundred percent spot on when you sit there and look at excuse me.
When you sit there and you go look at your sold data inside that inventory management tool, he's spot on with okay, the inventory management tool when you first go to acquire a vehicle. Is it important to understand what the day supply of a vehicle has been? Understand the definition of has.
Is talking about past tense. Is it important to understand that? Yes, it is.
But once you own the vehicle, once you've committed and you own that vehicle.
Market day supply does not matter anymore because you own the vehicle. What matters now is how does my store in my market with my people, how do we transact on that inventory, which backs you into hey, if this is how we transact, that's really all that matters.
And why wouldn't you appraise your cars based upon understanding the day supply, the competitive set, the rankings?
But also how you perform in that rig. A perfect example of this, a perfect example of this, and I'm gonna share my screen for a minute, John, because this is this is going right down the avenue you're talking about. Okay. Now I'm dealers, viewers, listeners, I'm using what I have available to me, which is our data. So please understand this is not a promotion of
lot pop and our lot walk software. But it's data and it's factual. If you
John Anderson (36:14)
Although it is the best out there.
Chris Keene (36:17)
okay, it is, but if you sit there and understand that
The inventory you've been bringing in lately has got a market day supply on average of 78 days. And if you were to see this and only say day supply was the only thing that mattered. And this particular dealer, from the end of July up until now, you can see there's been a consistency of the type of inventory they're bringing in.
The day supply keeps going up on it. Now you would think, my God, this guy's gonna be in trouble. Am I right or wrong, John?
John Anderson (36:58)
y that would be well yeah, I think with most people understanding
Chris Keene (37:00)
No
John Anderson (37:02)
day supply, they would, yeah. Yeah.
Chris Keene (37:04)
Yeah.
I and I would say the same thing. Arguably
John Anderson (37:07)
Yeah.
Chris Keene (37:07)
I would say the same exact thing.
Now keep in mind this is a new to us client that's been on with us for sixty, ninety days now.
Look at where this dealer's performing. They're almost selling one hundred percent of their inventory in a thirty day period of time. They've got forty seven percent of their inventory sold in the last two weeks.
John Anderson (37:36)
And they're sell and
Chris Keene (37:36)
But if you if it
John Anderson (37:37)
and and and they look good in their yeah, obviously they look good in their aging buckets too. So
Chris Keene (37:43)
Yeah. So they don't have a middle bucket problem. They're keeping that under control. They have a bunch of fresh inventory sitting to those zero to fifteen. They're lobbying a bunch of it off at the choke point before it starts aging, which is that choke point for all you dealers out there, what we refer to is as anything in that sixteen to thirty day bucket. You just want to make sure you get that sucker out of there before it does go to the thirty one to forty five and so forth.
Okay, so but if you looked at just the day supply, you would sit there and think, my God, the Steelers in trouble. He's not. He's in pretty damn good shape. Now, are there places he can improve? Of course there are. But what John is talking about in knowing your inventory. Now, again, I'm not going to pull up one of our clients' inventory management tool, but I can pull up, I own the car now what?
Jason Rice, our president, founder, CEO, he says that to dealers all the time. Hey, you own the car, now what?
So if I could understand very quickly, and again, dealers, this is a takeaway for you. Get into your inventory management tool and understand, not based upon a gut, not based upon a feeling, but based upon your factual data. Understand that 45% of your sales are coming from compact SUVs. Well, you may sit there and go, well, Doug, Chris, I'm a
Yeah, this happens to be a Hyundai store. I'm a Hyundai store. Of course they're gonna come from compact SUVs. Okay, but did you know that the average compact SUV you're selling is fourteen thousand?
Isn't that important? No.
John Anderson (39:29)
And you're underselling it against your average, ninety three percent versus ninety seven, which is your which is your store's average. So yeah. Yeah.
Chris Keene (39:36)
Yes, sir. Yes, sir.
So is this dealer potentially leaving money on the table? And is it probably because they're follow up? Yeah. Is it probably because when you look here, you can see the dealer is selling late in the cycle as well? I mean, they're doing a good job selling in that 16 to 30. But they're also doing a really good job in their aged buckets.
What happens, dealers, when your inventory ages? Your profit potential evaporates. So if you to John's point, and I love that you brought this up, John, if you pay close attention to what you're selling in the now moment, because viewers, listeners, this is as close to the now market as you're ever going to see.
Because from this screen right here, we're measuring what the dealer has done in the last two weeks.
That sure is better than day supply, because day supply at best case scenario is measuring you against A an imperfect market, B thirty to forty five to sometimes sixty days ago.
and C against all kinds of dealers that may not even know how to merchandise the vehicle properly because they're a Ford store and they don't know the first damn thing about a Lexus RX three fifty.
So why would I want to measure myself against an imperfect market? Like John said, and like I'm saying, it's not that the information that you're getting inside an inventory management tool is wrong. It's just incomplete. It's not the final story. Your final story is what you can go pull out of that same inventory management tool and go do all this work here.
to find out how you're doing in the class, in the year, in the price point.
I mean, think about this for a minute. If you know you're selling
eighteen percent of your sales in that twenty to twenty five thousand dollar bucket, but only thirteen percent of your inventory sitting there.
Why would you ever intentionally go buy forty thousand dollar rigs?
John, I think that's kind of the point you were making there, right?
John Anderson (42:18)
Yeah. Yeah. Just knowing no right. Hey hey Brett, are you there? Can you pop on the screen? I got a question for you. There he is. Yeah, I just wanted to ask you, because you're you're a resident AI
Chris Keene (42:33)
Right.
John Anderson (42:33)
Okay.
You can't they can't all right. So you can't all right. Well here. Viewers and listeners, you
Chris Keene (42:38)
Just ask the question and we'll say what the answer is.
John Anderson (42:40)
you can't see Brett you can't see Brett, but I'm gonna ask Brett a question. You're gonna hear me ask him a question because he's the he's our resident AI expert. What what's the advantage of going to AI and asking w I know there's several advantages. I'm looking for one thing, but you go to AI and ask it a question
versus me going and looking for the answer to that question, what's the advantage I have by doing that?
Well, just yeah, if I'm looking for it myself, you know, I I got a question, I'm going to Google and I plug in the question versus giving that question to AI. What what big difference is there for me from that perspective?
I know there's a lot of them up.
Chris Keene (43:13)
Or essentially him
essentially him doing the research to try to find the answer or just
John Anderson (43:18)
Right. Or given a
Chris Keene (43:20)
asking AI.
John Anderson (43:20)
Right. And and I loved what you said. So viewers and listeners, basically what Brett said is it removes user error, basically. And and I gotta tell ya,
Chris Keene (43:29)
We can go.
John Anderson (43:29)
there's a lot of user error in my in in my toolkit when it comes to this kind of stuff. And the other thing
Chris Keene (43:35)
Ha ha ha.
John Anderson (43:36)
the other the other thing he says it gives you non biased information. And that's exactly where
I was going. So th
Chris Keene (43:42)
There's no emotion.
John Anderson (43:43)
so thank you, Brett. That's exactly what I that was exactly what I was looking for. Non biased, no emotion.
it it just gives you the information. So I the I I did that for this reason. Okay. When I when I was looking at this stuff today and looking for headlines and things that I wanted to bring to our attention on this call, at the end of that thirty day car versus a hundred day car are two different businesses now, right? At the end of that, one of the things that it
What it one of the things it said, and I'm not again, the reason why I asked Brett that question is I want you to know
Chris Keene (44:18)
Mm-hmm.
John Anderson (44:18)
I threw this to AI and this is the stuff that AI come back with me. All right. So coaching angle. The fix isn't complicated. Price aggressively in the first ten to fifteen days instead of waiting for AIDS to force your pricing. But most stores don't actually do it. Why not? I didn't
All I did was ask the question to AI. AI did all the search that it does and the million data points it goes through. Why did it come back with that? Very, very interesting to me that everything it could have come up with as a coaching tip, it came up with that. The fix isn't complicated. Price aggressively in the first 10 to 15 days instead of waiting on for age to force your pricing. I re I wanted to repeat that.
But most stores don't actually do it, right? I didn't program this thing. It went out and searched everything, and this is what it came back with, right? Why not? And so you w we talk about all the time, Chris, zero to thirty day, right? And I'll remind
Chris Keene (45:16)
Mm-hmm.
John Anderson (45:17)
people, I'll remind our viewers and listeners. I am still, I still ask the every time we every time we onboard a dealer.
Every time I time I get an opportunity, if I'm training a new manager, which I did this morning, I ask the same question. Would you agree that the best time to retain gross and net profit is when you sell that vehicle in the first, preferably in the first zero to 15 days, but in the first 30 days? And how did the manager answer me? I absolutely agree with that. Have I ever had anybody tell me, and Chris, I'll ask you the same question.
When you ask that question, has anybody ever told you no, I disagree with that?
Chris Keene (45:51)
No, not not a single person has. But let me add to that, John. Because how many times do we have to step up and give too much money for a trade in?
How many times does happen a day? A month, a week. Okay. Okay. How many?
John Anderson (46:02)
quite a bit or over appraise the trade to get a new car deal.
Chris Keene (46:06)
Yeah, okay, because you're trying to hit a new car objective. I'm not saying that's wrong.
John Anderson (46:09)
Right.
Chris Keene (46:10)
I'm not saying that's wrong at all. How many, how many times, how many times when you work for Ed? Ed got one of his buddies come in, trade his vehicle in, and you're looking at it and you appraise it, and you're the general manager of the store, and you put 25 grand in that thing.
Ed looks at you and says, Johnny, that thing is worth 27 and a half all day long. And you're sitting there scratching your head going under what planet is that thing worth $2,500 more dollars? And it's not. And you do it because ownership or executives
Are going to put in the car what they put in the car. And they'll look at you and say, figure a way out of it. That is a real life thing that happens. So, in that same vein, viewers, listeners, if we're going to make the most money and have the most profit in the first 30 days of its life, it also means that we are going to mitigate loss.
And if we sell that vehicle that we own for too much today, we're going to reduce the amount of loss if we do it in the first thirty. So it goes both ways. And I think dealers sometimes forget that in today's time, John.
John Anderson (47:17)
No,
I agree. And I I you know, I think to round out this conversation on knowing your thirty day turn inventory and your hundred day turn inventory, right? And separating those, one of the things that we do as a company are two go our two core pillars that we want to help coach all of our dealer partners to. The first one is
sell what you're stocking every month or at a minimum a 12 turn. If I'm stocking 100, sell 100. And then the second, the second core pillar is of those, of the of the vehicles that I'm selling, 65% of those sales need to come out of the first 30 days. So I I wanted to round this out. Notice I said 65%. We get a lot of dealers that get locked up on that 65%, but they also don't think about
We're also saying that thirty-five percent of that inventory is not gonna you're there there's gonna be some of that inventory that you know you do well with and you're gonna hold on to that a little bit longer, right? Or you've got leads working on it and you're working leads, right? So all all I'm trying to round this out by saying is if you know your inventory and you know your fast turn versus your slow turners, right? The
My slow turners are the ones that I want to pursue on a consistent basis. And I want to make sure that I understand what activity I have going on those vehicles. If I have leads on it, I want to communicate with my team. I want to update on those leads all the time, right? Is the customer still engaged? Or I'm going to access it myself by good to Chris's point earlier.
I'm gonna go right into the CRM and I'm gonna look at that information on and are we having quality
Chris Keene (49:00)
Yes.
John Anderson (49:01)
conversations with the customer? Right. Now listen, I know that managers, I've been there. I know you guys are wearing 17,000 different hats during a day. I get it. I gotta appraise trades. I got a salesperson that didn't show up to work today. I gotta find out what's going on with them. I gotta talk to the bank.
I've got to go out and talk to a customer. I got a customer back in service that's upset about something. I get all that. I do. And I'm sympathetic to that, right? But here's the point. You've got to manage your business. And you got to be this stuff, this there's a lot of little stuff. I got off this call this morning, and that manager, I said, Do you have any questions? He goes, I don't even know you just threw so much at me. I'm sure I'm going to have questions, but I don't even know where to go right now, right?
There's a reason why I do that. Is because that's your game. That's what you're gonna be doing all day long, every day. You're gonna have a lot coming at you, right? And I have to understand, I gotta understand what's going on with my inventory and and what I need to be
Chris Keene (49:58)
Yes.
John Anderson (49:59)
focused on, right? And so listen, we're n by no means by no means are Chris and I sitting on this call every week and saying, you got we're perfect at this, you guys don't know what you're doing. That's not
What it is. What it is is these are things that we consistently see. And we ourselves, when we were in the store, struggled with this stuff. So if if what we see now from a data perspective and understanding how that side of the business works and how important it is to understand what's happening at your store with your people in your market, if we can help shed some light on that so that you guys take a little bit different. My goal is every time we come off this podcast.
We've triggered something in your head to say, you know what? I do need to take a look at that. Right? That's my goal.
Chris Keene (50:43)
I need to revisit my processes.
John Anderson (50:46)
Right. Right. And so th some of the stuff, I hope you see a trend in some of the stuff we've been bringing to you over the last four weeks, six weeks, right? There's a lot of commonality in what we've been talking about, and it's not getting any better. It's and I'm not saying it's bad, I'm just saying.
There's a shift from new cars to used cars, right? there's a lot of EVs that are coming off lease coming into the market, right? And so all these things here, I wanna end with this. I wanna end with this. I took a note. I broke myself a note because I wanna make sure I didn't miss this.
I want you to think back to COVID. And I want you to think about business that we've done since COVID. And how the business has been since COVID. And what I want to ask you, and what I want you what I would challenge you to be honest with yourself. If you're a manager, if you're a salesperson, if you're a BDC rep, right, and I came into that position after COVID.
Do I really understand this stuff the way I should? And this is not a this is not this is not a criticism of you. But but
Chris Keene (51:47)
Mm-hmm.
John Anderson (51:47)
the honest the honesty behind us is, and we've seen it, right, after COVID for a long for many years, it wasn't that it
Business was coming to us. And so there's a lot of difference between business coming to us and now we have to go out and get the business. There's a big difference there, right? And do I understand
Chris Keene (52:05)
Yes.
John Anderson (52:06)
that difference? Do I understand that difference? I don't want to leave you with that. I just want you to honestly assess, right? Because if you don't understand the difference, get help. There's plenty of people out there.
there's a lot of people, good people in our industry that will be more than happy to help you and not charge you for it, right? I have to understand. Listen, the last time we had some of these challenges that we're seeing now was back in 2000
Chris Keene (52:31)
Seventeen, eighteen.
John Anderson (52:33)
right and before well and that was, you're right, right. But before that, really big ones, 2009, 2010. Right. Right. Right. Right. And so if you weren't
Chris Keene (52:38)
Economic crisis. Eight nine ten. What yeah. C cash for cloakers,
baby.
John Anderson (52:44)
If you weren't around during those times, 17, 18, 2009, 2010, you weren't you weren't around. Listen, we're right.
Chris Keene (52:52)
You may not have a game plan. It's okay.
John Anderson (52:55)
It's that is that is okay. We just gotta understand, and that's some of the stuff that Chris and I and Ronaldo on these calls try to share with you. Because you gotta understand, right? Now it's now I've got to go out, I've got to go out. I d I talked about that dealer today. He's he getting all these leads. He doesn't understand why people aren't showing up, right?
I've got to go get it. I've got to go get it. I can't wait. Right. They're not coming to me. Right. There's a lot of there's a lot of reasons for that.
Chris Keene (53:19)
Yes.
John Anderson (53:20)
There's a lot of reasons for that. They're not coming to me. So I've got to reach out and find out why they're not coming and I got to take action that way. And so with that, yeah. That's I just wanted to clarify because I feel like that's a lot of what's going on right now. And listen, manager salespeople, if you're in that position, please don't do I did this, right? I did I'm I'm being totally transparent.
When I start out in the business. I I didn't ask a lot of questions because I didn't want to look like a dummy. Don't do that. Don't do that.
Chris Keene (53:47)
No.
John Anderson (53:47)
Don't do that. Ask questions. Ask questions.
Chris Keene (53:49)
So to to
John's point here, folks, to John's point, and I'm gonna recap in 30 seconds here. Number one, are you in the no? And if you're not in the no, to what John's final statement was, ask questions. Number two, go back and look at how your store and your market with your people, how you guys are actually transacting.
Break it down. Look at your class of vehicles. Look at your years. Look at your models. Look at your price points. Look at the odometers. Look at that information. Because if you understand how you're transacting, you'll understand how to feed the beast or stock what you sell. And finally.
We say this every single week. And we don't get a lot of it. And we invite so much more. If you want help going through your inventory management tool to help find some of this information, to go through your CRM and help find some of this information, we will not charge you a single dollar. Go to Lot Pop or Lot Talk.
Excuse me, go to LottalkPodcast dot com. Look John up, look myself up, look Ronaldo up, look us up. We will connect with you. We will help you get in the know. So please, dealers.
Find out if you're in the know. And if you're not, ask questions. We will help. Other people will. On behalf of Mr. Anderson, myself, and the rest of our Lop Pop family, we thank you so much for tuning in. And we look forward to catch you next week, same bat time, same bat channel. On that note, we out.