Automotive News - September 21, 2020 - Best Practices Supplement - S9

SEPTEMBER 21, 2020 | 9
A N D Y M O H R AV O N N I S S A N , AV O N , I N D .

Equity mining provides sales boost
License plate scan helps
Nissan store figure out
who might be in market
Published in Automotive News Jan. 13, 2020

Urvaksh Karkaria
ukarkaria@crain.com

t Andy Mohr Avon Nissan, the service
lane leads directly to the sales floor.
To help drive new- and used-vehicle sales, the suburban Indianapolis dealership has turned to equity mining its
service department customers - determining which of them has positive equity in their
car or truck that might make them candidates
for a new purchase.
Every vehicle that arrives at the service drive
in Avon, Ind., has its license plate scanned to
retrieve the VIN. Within minutes, software
identifies trade-in prospects by analyzing factors such as amount of equity in the vehicle,
its residual value and available factory incentives. Following a physical inspection of the
vehicle and an assessment of service work
needed, the customer then receives an offer to
trade in their vehicle for a new or certified preowned one.
The process drives more than 15 percent of
Andy Mohr Nissan's monthly sales, or about
50 of the 300 vehicles the store sells every
month on average, said General Manager Tim
Dement.
"Every vehicle that comes into the service
center is a potential trade-in candidate," Dement said. "These customers are easier to sell
to because they've done business with you;
they are servicing with you. So it makes for an
easy transition and easy conversation."

Missed opportunity
Equity mining helps dealerships identify
customers who are in a good position to get
out of the vehicle they have and into a new
one for about the same monthly payment.
That builds loyalty by helping service customers use the equity in their used vehicles to buy
new ones.
It's also a cost-efficient way to turn vehicle
inventory because it minimizes marketing
cost.
The service center practice creates a revenue cycle for the dealership's other businesses, including the new and pre-owned departments and finance and insurance. It also ben-

Tim Dement, general manager at Andy Mohr Avon Nissan in suburban Indianapolis, saw a service
lounge filled with customers waiting for their cars as a sales opportunity.
Andy Mohr Avon Nissan uses equity
mining in the service lane to identify
prospects for new and used sales. Of
the 300 vehicles a month it sells,
equity mining generates more than
50 sales.

efits the service department, since the vehicles traded in must be prepped for resale and
have parts replaced. Profitability from the
new-car and trade-in sales have both increased through equity mining.
"Service customers are the most valuable
customer, and it became apparent we were
missing so many on a daily basis," Dement
said. He said the missed opportunity became
clear to him when he noticed his service department lounge filled with people waiting for
their cars.
"I couldn't understand why our salespeople
didn't see those customers as opportunities,"
Dement said. "Now we look at every service
customer as an opportunity to sell new vehicles."
Andy Mohr Nissan spends about $7,800 a

month on equity-mining software from Hunter Systems and AutoAlert.
"A couple of car deals a month take care of
the monthly investment in the technology,"
Dement said.

CPO source
But in addition to boosting sales opportunities, equity mining also is a way to source
higher-quality used cars, Dement said. Cars
coming into the dealership for service are typically late models or current leases, and they
tend to be in better condition than vehicles
bought at auction.
"I know the history on that car," he said. "I
know what it needs in the service drive. So I'm
not finding out after I bought the car that it
needs new brakes or a new transmission. And
if it does need those repairs, I know it upfront,
so I can apply it to my trade-in valuation."
Andy Mohr sources about 40 percent of its
used vehicles via trade-ins. With the equity-mining system in the service drive, the
business hopes to boost that share to about 65
percent. About 40 percent of the trade-ins are
resold as high-margin certified pre-owned vehicles. m

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