By Alysha Webb, Editor & Publisher
Whether you are considering acquiring a dealership, competing for an open point, or looking to find areas of lost sales at your current store, granular information is your best friend, argued Josh Pope, account manager at Urban Science.
Pope discussed Urban Science’s methodology and how it can be useful in the buy sell world during a webinar presented by Automotive News on January 20.
If you are considering acquiring a store, “you definitely should have a solid understanding of the sales performance of the dealership,” he said.
Or, say you are angling for an open point and you want to impress the manufacturer with your strategy for success in that location. Urban Science analysis can tell you what incremental sales are possible, who is beating the brand in that area, and suggest how to win those customers back, said Pope.
Urban Science takes zip code-level data from a specific area, say a county, and combines it with additional data to produce extremely detailed pictures of a dealership’s sales and competition. It breaks down registration by brand and market share, it looks at different model segments, and it uses bench marks such as national and state data as comparison points.
It then creates a Gain Loss map showing where a particular brand has gained or lost market share in each segment in each zip code area. That data is then compared against the benchmarks to see where the brand is under- or over-performing
Sometimes a brand may be over-performing overall but not doing well in specific pockets. “We can see patterns,” said Pope.
Opportunity gained
He used an actual Urban Science analysis of the Raleigh-Durham-Cary area of North Carolina to show how the data can reveal opportunities.
For example, Mercedes-Benz has only one dealership in the Raleigh-Durham-Cary area. The Gain Loss analysis by zip code showed Mercedes had gained 28 sales in a handful of zip codes against the benchmark of the state average, but lost 251 sales in other zip codes. Should Mercedes open another point in the area?
BMW has two dealerships in the area and gained 196 sales while losing 166. It was especially strong near one of its dealerships, but the area around the other dealership was seeing lost sales. That is an opportunity for another brand, or for that BMW dealership to figure out how to recapture those sales.
Among other brands, Ford outperformed throughout the market except in one area. “That is a very localized issue,” said Pope. Identifying and resolving that issue would add sales, the data suggests.
This kind of detailed analysis is useful for both dealership groups and single point dealers, said Pope. It can help single-point store owners that are looking to add dealerships. It can also help identify problem areas even if the owner isn’t looking to add more stores, he said.
For example, a brand might be selling below the national average in one segment. Pope showed data for the Acura brand in the Raleigh-Durham-Cary area. The brand was outperforming the national average in all segments, but only barely in the traditional midsized segment. There might be opportunity there.
The biggest mistake people make when faced with data is only looking at market share, said Pope. “If you don’t break it down by (model) segment and zip code, you could lose a lot of insight,” he said.
