Why “Penny-Perfect” Payments Simply Don’t Cut It

Why “Penny-Perfect” Payments Simply Don’t Cut It

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One of the most talked about themes at this year’s NADA 2022 conference was the notion of “Penny-Perfect payments”. It seemed as if this was the new buzzword replacing Digital Retailing from just a few short years ago.

The concept is quite simple. Technology providers are now empowering their OEM and dealer clients with the insights necessary to provide the customer with an accurate, right down to the penny, payment. This is designed to ensure each transaction has the best chance of seeing the goal line and creating a true win-win scenario for the customer and the dealer.

A Penny-Perfect payment on a non-competitive lender program can cost thousands.

Unfortunately for those who have focused on Penny-Perfect payments, it may be too little, too late. The technology of today has far surpassed “Penny-Perfect” and those competitors who understand this are cleaning up.

The problem with simply leveraging a Penny-Perfect payment is that it’s not a true Scientifically Perfect Solution. Unlike a Penny-Perfect payment, a Scientifically Perfect Solution is the very best fundable, defendable, and transactable Penny-Perfect payment. On average, the difference between a Penny-Perfect payment and the Scientifically Perfect Solution is over $50 per month – in many scenarios it’s in excess of $100 per month. $100 per month difference isn’t a big deal on a $400,000 Ferrari but it’s a HUGE deal on a $50,000 everyday car. An example from a recent study shows a Penny Perfect payment variation of $125 per month between the best available program and the captive. The best Penny Perfect payment was $665 and the best captive Penny Perfect payment was $790. If a consumer receives a quote of $665 from one dealer and $790 from another, which one will he choose? Yes, that was a rhetorical question – the consumer is going to select the more affordable transaction.

As an industry, we absolutely must get this right from the onset. This starts with the OEMs & Ad Tech firms, flows to the various Digital Retail channels and ultimately down to the dealership’s Desking/CRM/DMS. The industry is at a crossroads. One direction leads to no change, one direction leads to consistent payments throughout the consumer journey that are Penny Perfect yet wrong and the optimal direction provides every consumer a Scientifically Perfect Solution for every touchpoint.

The tremendous turmoil throughout the entire automotive industry is the catalyst that is forcing every player in the ecosystem to choose a direction. Some are working tirelessly, and devoting tremendous resources, to take the optimal path. Others are working just as hard, and spending just as much money, implementing imperfect solutions. Thankfully, very few are doing nothing.

It is nearly impossible to predict what is actually going happen over next 12 to 18 months. One thing for certain is our industry will be forever changed and those visionaries who understand the importance of perfection will be the ones who end up on top.

About The Author: Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry.

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

OEMs’ Rebate Spend During a Time of Reduced Inventories

OEMs’ Rebate Spend During a Time of Reduced Inventories

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Just because you’ve lowered rebates doesn’t mean you’ve solved the problem

For everyone involved in the automotive industry, 2021 continues to be a very interesting year where the only constant is change. We all know the story by now; consumer demand is high, inventory is low.

But there are other stories happening in the background, such as the rising level of average prices on vehicles, the decreasing level of rebates, and the consumer’s growing frustration over being quoted one price online and a different price at the store.

To be certain, average prices are going up. According to Kelley Blue Book, the average transaction price through July 2021 reached a never-before-seen high of $42,736, marking an 8.2% increase over July 20201.

Manufacturers have pulled back rebates

Because of reduced inventories, manufacturers have pulled back on rebates and incentives. In fact, rebate offers for most segments have continually declined over the last several months. What’s more, actual program offerings or sub-vented lease programs have remained completely flat across all segments. We’re witnessing the dynamics of supply and demand amplified by American consumers’ savings and inability to splurge on vacations and other discretionary spending opportunities since the start of the pandemic.

Consumer savings in the United States exceeded a staggering 2.4 trillion U.S. dollars at the end of 2020. Even though the personal savings rate has since dropped and amounted to 8.9 percent at the end of September, 2021, it still means that Americans households have stockpiled excess savings, setting the stage for a surge in consumer spending.

New market dynamics – outdated business practices

What’s worth calling out – besides from manufacturers having pulled back on rebates – is the fact that the process they apply to determine their rebates and incentives remains largely manual. Additionally, the reduction of rebates doesn’t solve the problem manufacturers, lenders and dealers have: In order to create an improved modern retailing environment and consumer experience, they must eliminate the disconnect that persists between what consumers are being quoted online compared to what they are presented with at the store.

Outdated business practices don’t have to prevail and the consumer should not have to endure a disconnected shopping experience. Simply put, they no longer have to. Solutions have been conceived, and are currently available, which are the result of combining science, technology, and data. Manufacturers can determine with precision, what incentives and rebates are needed to achieve the most competitive position based on live competitor and market data. And retailers can take advantage of the modern retailing solutions available, which provide consumers consistent and all-inclusive payment quotes – irrespective of where the consumer shops – seamlessly connecting the consumer experience online with the showroom experience.

Injecting science into more accurate rebates

Manufacturers spend 40+ billion dollars each year on incentives to influence consumer buying behavior to achieve a desired market penetration. Traditionally, the car makers go through a labor-intensive process to analyze the data related to the effectiveness and impact of the incentive and rebate programs they are offering. This is done to determine how best to position themselves competitively – and to determine how much they must spend to earn their desired market share.

The process is time consuming, mechanical and unsophisticated. Decisions are often made on gut instinct – without having all the facts. Not only is this very expensive (and seldom accurate), it is also not timely and provides openings for competitors to step in and win market share.

Almost every dealer in the country has experienced an inability to collect rebate and/or incentive monies from their manufacturer because of misapplication or improper combination of rebates. When this happens there are two options: Rewrite the contract, which always upsets the customer, or take the difference out of the gross.

The data and technology platforms needed to overcome this are available, all of which will greatly enhance the consumer experience. Manufacturers, lenders and dealers can now be seamlessly tied together in a complete system that offers a portal and a dashboard containing all pertinent data necessary to build, offer and transact. This technology includes a solution that mines, analyzes and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace.

Helping dealers remain profitable

This process also helps dealers remain and improve profitability, since it takes into account each dealer’s specific terms and conditions under which the dealership is willing to transact. The process also includes every parameter, policy, factor and rule that influences an automotive transaction – and all terms and conditions that are uniquely set by the dealer, including quoting rules for each specific vehicle in the dealer’s inventory. By leveraging all uniquely identifiable terms, conditions and all pertinent data, dealers are empowered to provide consumers with all-inclusive, fundable, transactable and defendable payments for every vehicle and every consumer scenario online and subsequently in the showroom.

We all know the story in automotive today – healthy consumer demand, low inventory and higher prices. With the right data, technology and transactable payment offers, everyone in automotive wins by truly leveraging the right modern retailing process, where the consumer enjoys a frictionless and much improved, consistent experience online and in the showroom.

About The Author: Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry. For more information, please visit www.marketscan.com 

1: https://www.cbtnews.com/july-vehicle-prices-hit-all-time-high-while-incentives-vaporize/  

2: Bureau of Economic Analysis, https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&1921=survey&1903=76#reqid=19&step=3&isuri=1&1921=survey&1903=76 

 

 

 

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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Market Scan Information Systems, Inc.

 

The Automotive Industry’s Last Mile

The Automotive Industry’s Last Mile

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The proper implementation of “Scientific Data” Represents the “Last Mile” for the Entire Automotive Industry

The concept of the “Last Mile” has been central to the success of many emerging businesses, as well as the transformation of entire industries in recent years.

For example, the term “Last Mile” is used in supply chain management and transportation planning to portray the final part of a journey comprising the movement of people and goods from a transportation hub to a final destination.

The term originated in the telecommunications industry, which faced enormous challenges connecting individual homes to the main telecommunications network.

The Last Mile is a differentiator and helps improve the consumer experience

Amazon.com has perfected the Last Mile as part of a comprehensive transportation network of people and packages from hubs to final destinations and has become a benchmark in business best-practice. Last-mile delivery has seen explosive growth in business to consumer (b2c) deliveries, from e-commerce companies in freight transportation, and ride-sharing companies in personal transportation.

In the world of automotive, data is now the “Last mile”.

Where is the Last Mile in Automotive?

All stake holders in the automotive industry: manufacturers, auto lenders, marketers, retailers and data companies, have built their own suite of technologies to facilitate modern retailing that seamlessly connect online shopping with the showroom. However, it’s the complete, timely and accurate data that represents the industry’s Last Mile. A complete data set intrinsically connects each of the stake holders – correctly – in a central hub, which facilitates a transparent, frictionless and much improved customer experience, regardless of where the consumers are in their shopping journey.

Don’t get me wrong, this industry has had plenty of data for a long time, and a vast majority of this data does a great job of telling you what the trends were 90 days ago. However, all of that data without science is just noise. Now, however, there is a platform that ties together all the pertinent data points necessary to arrive at a scientifically perfect, transact able solution for the customer.

Today, all of the primary areas of the industry have access to the most powerful analytics platforms ever created to make educated, tactical and profitable decisions – all for the benefit of the customer.

Data Isn’t Good Enough; We Need Scientifically Powered Data

The best solutions today are designed to empower and enable retailers to excel in modern retailing, and revolutionize the way manufacturers and lenders work with agency partners and technology providers to construct consumer offerings that win market share – without overspending.

What’s empowering and driving this ecosystem of modern retailing for automotive is a comprehensive database containing every parameter, policy and factor that can influence an automotive sale or lease transaction. A scientifically perfect payment quoted to a consumer is incredibly complex as it must take into account a myriad of critical factors, to include every lender program, every manufacturer rebate and incentive, every municipality tax and fee – and every term and condition, under which each retailer is willing to transact.

You may wonder why we need scientifically-powered data to connect everything. Because today’s consumers are smarter than ever and they have plenty of tools at their disposal that help them make their decisions easier. What’s more, they have more options than ever before to find a car or truck outside of a traditional retailer. It all hinges on artfully combining science and technology with the right data, and this Last Mile of data is now being used to connect shoppers with the right car – at the right price and payment.

It’s no surprise that price and payment negotiation remain among the most important aspects of the car shopping experience for consumers. A recent survey commissioned by Market Scan showed that nearly half of all respondents (45%) say price and payments matter to them the most.

Solving For the Last Mile Disconnect with Consumers

The disconnect between shopping online and the experience at a dealer showroom also remains a major headache for many. In fact, when it comes to online shopping, 49% said they need to restart the entire process when they arrive at the dealership after doing all their homework online, ahead of time. Furthermore, 43% are frustrated that there are still discrepancies between the online offer, and the one they are presented with at the dealership.

Why does this matter? Twenty-one percent of shoppers say they begin to lose trust in their dealer when the discrepancy between the online offer and showroom offer is $50 or less per month. In parallel, 21% said they will actually walk away from the deal if the discrepancy is $50 or less per month, and 48% said they will walk if the difference is less than $75 per month.

This isn’t all the dealer’s fault, by the way. When dealers aren’t seamlessly connected to their OEM and lender partners, or their agency and technology partners don’t use the correct data, the whole system falls flat and the customer experiences the disconnect. What ensues is a scenario in which the offer presented to the customer online, is different from the one they receive in the showroom. And for 48% of these customers, it’s enough to make them walk away from the deal.

It’s time for everyone in the automotive industry to embrace the notion that combining science and technology will enable us to deploy and leverage the right data, so we can all have our “Last Mile” moment that has altogether transformed countless other industries.

About The Author: Rusty West is President & CEO of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry. For more information, please visit www.marketscan.com 

 

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

A Micro-Chip Shortage Will Impact Supply – Does It Have to Disrupt the Consumer Shopping Experience?

A Micro-Chip Shortage Will Impact Supply – Does It Have to Disrupt the Consumer Shopping Experience?

Steve Smythe's Headshot

Camarillo, Calif., April 20, 2021

As we’re about to enter year two of the COVID-19 pandemic, the auto industry is facing a continued production and supply challenge stemming from the pandemic, but not because factory workers are being told to stay home.

This time around, a shortage of semiconductor chips, which are also used to build other consumer electronics in high demand, are causing supply backlogs for the production of new vehicles.

The Latest on Semiconductor Chip Shortage

Semiconductor chips today are a critical part of the vehicle build process. The chips are used in everything from engine management systems, bluetooth, road navigation and collision-detection systems, and – remarkably – they can comprise as much as 40% of a new car’s cost, according to Deloitte1.

Research firm, AutoForecast Solutions, recently increased its estimate of the number of cars and trucks that will not be produced because of these supply problems.

Globally, the forecasting firm said that the automotive industry had already announced volume cuts totaling 680,350 vehicles — up from 202,000 vehicles in January. The firm also believes that number may increase to 1,321,701, as additional auto plants and their supply partners run out of chips; as many as 338,822 vehicles are expected to fall out of North American production plans2.

How a Chip Shortage Affects Car Shopping

The shortage will make accurate incentives and rebate setting more challenging for the manufacturers. In turn, dealers will struggle with how to set prices and payment offers as a result. Finally, for consumers it can be expected that the shortage of supply will result in increased MSRP’s.

Even before the pandemic and chip shortage, one of the major concerns among consumers was their inability to shop for a car online and seamlessly complete the transaction at the dealership. Consumers simply don’t understand why the monthly payment they were quoted online is different when they get to the store.

In fact, a recent survey we conducted revealed that 43% of consumers are frustrated that their online offer is different from what they are presented with at the dealership. This is important because 21% of shoppers say they walk away from a deal when this discrepancy is $50 or more per month; this number quickly jumps to 48% when the difference between what is quoted online and in the store is $75 a month.

For dealers who are not using technology solutions that empower them to provide identical price quotes online and in the store, nearly half of their car shoppers will walk away because the payments offered at the store are different from what they were offered online!

How Will Chip Shortages Impact Manufacturers’ Incentive Programs

Payments quoted to consumers are often shaped by manufacturer incentives and rebates, and the new chip-driven supply challenges will only exacerbate the inexact science manufacturers use in determining these.

Manufacturers spend billions of dollars each year on incentives to move inventory to achieve a desired market penetration. Traditionally, the car makers go through a labor-intensive process to analyze the data related to the effectiveness and impact of the incentive and rebate programs they are offering. This is done to determine how best to position themselves competitively – and to determine how much they have to spend to earn their desired market share.

The process is time consuming, mechanical and unsophisticated. Decisions are often made on gut instinct – without having all of the facts. Not only is this very expensive (and seldom accurate), it is also not timely and provides openings for competitors to step in and win market share.

Almost every dealer in the country has experienced an inability to collect rebate and/or incentive monies from their manufacturer because of the misapplication or improper combination of rebates. When this happens there are two options: Rewrite the contract, which always upsets the customer, or take the difference out of the gross.

The data and technology platforms needed to overcome this are available, all of which will greatly enhance the customer experience. Manufacturers, lenders and dealers can now be seamlessly tied together in a complete system that offers a portal and a dashboard containing all pertinent data necessary to build, offer and transact. This technology includes a solution that mines, analyzes and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace and finds truly superior, scientifically perfect solutions for all stakeholders: consumers, dealers, lenders and manufacturers.

Furthermore, today’s best and most comprehensive solutions enhance the consumer experience and the showroom process by electronically presenting all payment and purchase options to customers with full compliance and transparency – on any computer, tablet or mobile device – at any/all points along the consumer’s shopping journey. As a result, the process can dramatically shorten transaction times, raise dealership efficiencies and margins, and elevate customer satisfaction as a result of a more streamlined process.

With these new technologies available to the entire automotive eco system, all parties involved can quickly adapt to changes caused by a disruption to supply – without compromising the optimal shopping experience for the customer.

Written by Rusty West, President and CEO of Market Scan Information Systems.

  1. https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-media-telecommunications/deloitte-cn-tmt-semiconductors-the-next-wave-en-190422.pdf
  2. https://www.autonews.com/manufacturing/new-forecast-13-million-vehicle-loss-microchip-shortage

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

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© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

How All Components Are in Place for Automotive Digital Retailing in 2021

How All Components Are in Place for Automotive Digital Retailing in 2021

Steve Smythe's Headshot

Camarillo, Calif., April 20, 2021

It is certainly an understatement to say the world has been turned on to online shopping and digital retailing. According to Adobe Analytics, during the 2020 Black Friday event, online sales increased 22% over the previous year. What’s more, the National Retail Federation expected this year’s online holiday sales totals would increase 20% and reach $202 billion1.

The Automotive industry is experiencing this same phenomenon, much of it fueled by the shelter in place orders associated with the COVID-19 pandemic.

Internet Shopping is Now Normal

Particularly for younger car shoppers, digital retailing has increasingly grown in popularity. According to McKinsey, less than a third of younger consumers today want to shop for their next car in-person at the dealership, and a larger number of these individuals are interested in contactless service as well2.

Furthermore, according to Cars.com, 48% of consumers today would like to handle price negotiations online, and another 42% say they want to handle financing online, including being able to obtain accurate payments online3.

In order to truly deliver the optimal automotive retail experience for consumers in an online environment, there are many components that must be artfully tied together to deliver consistent, transparent messaging for every step of the customers’ journey.

Automotive Retailers Are Ready

Expedited by COVID-19, the automotive retail ecosystem is currently undergoing its own shift toward a more consumer-friendly model that promises to mimic the convenience of online shopping found in many of today’s popular Internet retail portals. To successfully tap into this ecosystem and deliver on this promise, the industry is beginning to leverage science, technology and data to create a frictionless automotive shopping experience.

One key is certainly data. The industry has plenty of data that can tell you what the trends were 90 days ago; perhaps even statically advise what is available for a particular circumstance. Yet, all of that data without science is just noise. Now, however, there is a platform that ties together all the pertinent data points necessary to arrive at a scientifically perfect, transact able solution for your customer. After all, there’s a reason why the windshield is much larger than the rear-view mirror. Today, the industry has access to the most powerful analytics platforms ever created to make educated, tactical and profitable decisions.

The best solutions today are designed to empower and enable dealerships to excel in digital retailing and revolutionize the way manufacturers and lenders construct offerings to win market share – without overspending.

The Technological Ecosystem

What’s empowering and driving this ecosystem of digital retailing for automotive is a comprehensive database containing every parameter, policy and factor that can influence an automotive sale or lease transaction – every lender program, every manufacturer rebate and incentive, every municipality tax and fee and every term and condition under which each dealership is willing to transact. Additionally, today’s trusted platforms enable the seamless representation of all five major automotive sectors required for a successful transaction, online or in-store:

  • Manufacturer: Every model and trim offered by every manufacturer; all respective incentives and rebates including compatibility and “stackability” rules, as well as VIN-specific, option package specific, regional specific and dealership specific targeted offers.
  • Lender: Every published program offered by each lender in the country, including all parameters, policies and factors that can influence any automotive transaction.
  • Dealer: Each dealer’s individual selling price rules, lender relationships, fees, reserve policies, and all other required terms and conditions.
  • Municipality & Government: All STATE, COUNTY, and LOCAL laws, rules, regulations, calculation methodologies, tax percentage rates and registration fee and DMV calculations.
  • Consumer: All consumer credit bands – and how those are segmented and considered by every manufacturer and Lender.

Pulling All the Pieces Together

Dealers, lenders and manufacturers all need to be seamlessly tied together in a comprehensive system that offers a dashboard and a portal of all pertinent data necessary to build, offer and transact. This technology includes a solution that mines, analyzes and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace and finds truly superior, scientifically perfect solutions for all stakeholders: consumers, dealers, lenders and manufacturers.

Furthermore, today’s best and most comprehensive solutions enhance the consumer experience and the showroom process by electronically presenting all payment and purchase options to customers with full compliance and transparency – on any computer, tablet or mobile device – at any/all points along the consumer’s shopping journey. As a result, the process can dramatically shorten transaction times, raise dealership efficiencies and margins, and elevate customer satisfaction as a result of a more streamlined process.

With these new technologies available to the entire automotive value chain, digital retailing is poised to see a tremendous lift in 2021.

About The Author: Rusty West is President of Market Scan Information Systems and has more than three decades worth of experience developing leading data and technology-based solutions for the automotive industry. For more information please visit www.marketscan.com.

  1. https://www.wsj.com/articles/black-friday-was-a-bust-for-many-stores-better-for-online-11606676355?mod=article_inline
  2. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/how-consumers-behavior-in-car-buying-and-mobility-changes-amid-covid-19
  3. https://www.cars.com/articles/ride-sharing-drops-online-car-shopping-increases-in-coronavirus-wake-419581/

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

Market Scan Vertical Logo - White

© 2022 All rights reserved.
Market Scan Information Systems, Inc.

 

Are You Maximizing the Opportunity Each Deal Offers Your Dealership?

Are You Maximizing the Opportunity Each Deal Offers Your Dealership?

Steve Smythe's Headshot

Camarillo, Calif., March 22, 2021

The role of the dealer’s sales executives in a customer’s retail journey – and the technology solutions available to you – continue to be vital to establishing the overall credibility of the dealership – and to maximize a dealer’s sales volume and gross margin potential.

Outlining possible customer deal scenarios is an integral part of the buying experience. Desking solutions still matter, but there are other factors that must be taken into account to elevate the buying experience.

It’s been a year since we launched our current desking solution in two new product module packages, mDesking 360 and mDrive SYNC, the latter designed to form a virtual handshake to other solution-providers’ technologies. I have been curious to get specific customer feedback to understand how these product solutions have been embraced by our clients, as well as to assess if there is room to enhance the solutions even more.

I tasked Robert Mancha, our Director of Strategic Relationships, who has more than 10 years of experience as a sales executive with us, to assist some of our clients with in-field coaching as part of the onboarding process. I asked Robert to report back some of his observations on how the products are being perceived – as well as used. Below, I will share some of Robert’s observations as well as provide commentary and my perspective.

Robert’s recent trip took him to the Chicago metro area, where he visited 10 dealerships during the course of one work-week. He worked with more than 30 dealership representatives that included owners, managing partners, general managers, general sales managers, desk managers and finance managers.

Today’s dealerships are being bombarded with technology to grow sales and profitability. There are many new players in the space, all vying for their share of the automotive retailing market. This includes DMS systems, CRM solutions, inventory management solutions and stand-alone desking solutions, to mention a few. Robert found himself looking at side-by-side comparisons of Market Scan’s mDesking 360 functionality compared to those of several other desking solutions. He recognized the challenge dealerships face in trying to understand what makes one desking solution better than another. Visiting the dealerships and reviewing their current sales processes made it clear to Robert what it is that signifies a clear distinction between Market Scan’s solutions and all others.

Robert watched managers produce deals in multiple competitor offerings throughout his week-long trip, and he observed what was a common theme: The focus of every deal constructed within a competitive offering was isolated to a single lender, and in many cases, one program, one term with either retail OR lease selected. This single-lens approach generally seemed to make sense for those sales managers that Robert visited; they were simply unaware of other, potentially much more profitable opportunities at the same deal structure. The fact is that the captive lender is strongest only 45-50% of the time but, if the existing desking solution does not display those better scenarios, sales and profit will be missed. A solution that displays the range of all available lenders’ offerings on every deal, enables desk and finance managers to see better, more profitable deal structures for every conceivable deal scenario – as well as propose even better options for the customers.

Without getting into the weeds of all the parameters and details needed to construct scientifically-perfect deal scenarios, which consider all pertinent data points, Robert made a notable conclusion after sitting through hundreds of deal structures during the course of one week: The vast percentage of deals that had been accepted by the dealership management, on average, missed hundreds of dollars of available profit at the accepted payment and down stroke! In a big store, which might retail 250+ vehicles monthly, the net cost could be $50,000-$100,000 in missed gross – considerably more than that same dealership enjoys in floorplan credits.

All of Market Scan’s solutions, whether mDesking 360 or our mScanAPI which powers other technologies, focus on the profitability of the structure. In other words, you determine “how” you want to sell the vehicle by setting the deal structure in just a few clicks. All that’s left to reveal the most profitable offerings, from your available lenders, is to select “Calculate”.

Your management team instantly gains access to the best programs for every one of your available lenders, along with the analytics for optimal application. The most profitable and competitive scenarios for every term available and deal type selected (lease/retail/balloon/one-pay) are displayed every time.

Market Scan’s systems also correctly applies all standard/automatic (VIN-specific) incentives, and provides a preview of every conditional offer for any given consumer (zip code specific), with all federal, state, county, local and municipal taxation rules and registration fees for all 50 states properly applied. This helps minimize incentive errors and audit exposure.

Additionally, because we also ‘power’ many of the online and digital retailing technology providers, our systems help you and your team quote more competitive, accurate and consistent payments all along the consumer’s buying journey.

As a former dealer principal, the take away for me is simple: In a time where digital retailing and online presence plays an increasingly important part in any dealer’s retailing efforts, giving your sales team access to the best information, data and calculations will help secure your future.

If you would like to discuss this at greater depth, please feel free to reach out to me directly at 805.823.4256 or ssmythe@marketscan.com. Thanks for stopping by!

Best Regards,

Stephen Smythe, Chief Executive Officer
at Market Scan Information Systems

Steve joined Market Scan as its CEO in 2009 after 30 years in the retail automobile business, bringing extensive knowledge of the industry and what it takes to sell and lease automobiles. During his career, he spent 20 years as a Dealer Principal/Owner, operating multiple dealerships in major U.S. metro markets including Los Angeles and Washington, D.C. Among the brands his dealerships represented were Mercedes Benz, Toyota, Volvo, Bentley, Rolls-Royce and Acura.

After 12 years as Market Scan’s CEO, the University of South Florida alumnus has decided to spend more time with his family (and grandkids) and has returned to his old stomping grounds in the Sunshine State. Steve will continue to work with the team at Market Scan in a near full-time capacity role as “Chief Strategic Advisor”.

For additional information, articles or interviews please contact:
Market Scan at info@marketscan.com

Market Scan was founded in 1988 by Father-Son team Russell and Rusty West with a single vision: build a world-class desking platform to fit every customer’s financing and leasing needs like a driving glove while returning the highest profit margin possible to the dealership.

Market Scan Vertical Logo - White

© 2022 All rights reserved.
Market Scan Information Systems, Inc.