How is Galpin getting more trade-ins?

Galpin Motors, in Los Angeles County, CA is a world-renowned, award- winning automotive enterprise. Galpin Ford has been the number one volume Ford dealer in Los Angeles for 29 consecutive years.

This case study was initially published on August 4th 2020. We are reposting it now on our blog to make it available to more dealers.

The Problem

The automotive industry is progressively shifting to a digital world and consumers expect to be able to do more online. Following that trend, more and more dealers are adopting digital retail. Valuing the trade is an essential component of this experience but is often overlooked. It needs to be a quick and engaging way to give the customer an accurate offer, in order to keep up with the premise that made digital retail appealing in the first place. Otherwise, dealers can confirm that the results end up being less than desirable.

Galpin Motors went through this. The solution they had in place was only getting them a relatively low number of leads, because it was taking too much time to complete and people were dropping off. They tried other trade-in tools but saw little success because adhering to their "one size fits all" solution was very limiting.

There are a lot of nuances that go into the process of appraising a car, and they realized that they don't want to conform to somebody else's idea of how to appraise a car. They were looking for a lot more flexibility and a tool that would allow them to set their own valuation models, while keeping it simple and engaging with their customers.

How did Galpin solve this?

Galpin decided to roll out the AutoHub trade-in tool in all their stores. Since then, AutoHub has allowed them to better engage with their customers and define their own pricing strategy. By offering a very intuitive process that takes less than a minute, AutoHub has also significantly improved their conversion rate.

One feature AutoHub initially designed for Galpin, but ended up rolling out to all their dealers, is the customer ratings. Early in the trade-in process, the customer is asked to submit a star rating on their vehicle's cosmetic, mechanical, and safety condition. It engages them by involving the customer in the appraisal process by asking a simple question about their vehicle. But at the same time, it protects the dealership. Not only can the offer be automatically reduced based on these ratings - but if the ratings are misrepresented it gives the dealer a legitimate reason to revise the offer.

We didn't want to show the customer a super high offer for their car, and then have the customer come in and tell them: "Well, your car is not in good condition, and it's nowhere close to where we thought it was worth". That creates conflict. We as a company for years have professed that the customer should be involved in the appraisal process, and AutoHub allows for that interaction.

Galpin wanted to ensure that the valuation presented online was the same as their used car managers would put on the car in store. AutoHub gives the dealer the tools to define very precise formulas on how much to offer for each vehicle. Galpin can define pricing rules using any combination of any percentage of trade-in values, auction values, wholesale values, and retail cost to market to configure the trade valuations.

We want to put the appropriate value on the car. We don't want to upset our customers with a lowball, and we don't want to upset them with a false promise with a highball. We want to pay what we feel the cars are worth to us, and specific cars are worth a lot more, and some are worth less. AutoHub gives us the ability to define this. One of the problems with our old tool and every tool we've looked at for that matter, was that it was rigid with how we could set our valuation model. If I can discount or add rebates to a specific car on my digital retail channel, I should have the ability to also adjust what I'd pay for a 2017 F150 XLT, and AutoHub allows for that

Navigating the COVID-19 Era

Fast forward to today, it has become more critical than ever for dealerships to find alternative sources to acquire used inventory. Vehicles sold at auctions are becoming overly expensive as the pandemic has put the supply and demand out of balance. Galpin has been very successful navigating this by focusing on trade-ins and moving away from auctions.

They have adjusted their pricing formulas to offer higher values than they normally would and out-price their competitors. This results in acquiring vehicles for cheaper than buying from auctions, while also expanding their market by capturing customers outside their PMA.

They took it a step further with AutoHub's High Interest Vehicles, which allows them to target vehicles they need the most with specific pricing formulas. They configured these overrides to generate offers their customers can't refuse. Then, they use AutoHub's direct trade link feature to invite their customers who own these vehicles to get their offer. It's been a very successful and cost-effective way to acquire more inventory from both sales and service customers, while creating a great opportunity to sell them a new vehicle.

A winning strategy

Since they partnered with AutoHub, Galpin has tripled the number of inbound leads across their 6 rooftops. On top of this, their sales teams have become more efficient because no time is wasted on leads with fake contact information. AutoHub verifies each lead's mobile phone number with SMS verification code.

It's a win win. We get the lead, the customer gets the number that we'd like to offer. We're both happy. With other tools, we found that a huge number of people put in fake information and I have no idea who I'm calling. I could be calling a public phone, or emailing an email address that belongs to someone else. Our efficiency has increased thanks to this!

This enabled them to be 4 times more successful in reaching out to their customers. All this combined resulted in doubling the number their number internet trade-in acquisitions.

Here are the exact numbers they observed:

• +218% Inbound Leads
• +304% Customer Contact Rate
• +127% Internet Trade Purchases