Jason Knight, LotLinx Co-Founder and Vice Chairman, sat down with Kelly Kleinman of Dealership News at this year’s NADA conference to discuss the evolution of LotLinx and how we are shifting the industry’s focus from traditional digital marketing metrics to inventory-focused strategies that optimize for vehicle engagements and improve turn by 6 to 10 days.*
At LotLinx, we believe inventory-focused strategies are crucial to achieving sales goals, increasing vehicle turn, and retaining higher margins. That’s why we specialize in aligning dealer sales objectives to marketing strategies tailored to each dealer’s unique inventory.
Watch an excerpt from the full video above or read on below for the transcript:
Kelly: When we last spoke, LotLinx was up to 1,200 ish dealers, and from what I gather that number has increased quite a bit.
Jason: It has. Many times.
Kelly: Seems like the cure for lot rot has caught on. What is your explanation for the outstanding growth?
Jason: I think that we have come at a really good time to hit the market forces. If you read the data, lease reports are coming in with record numbers, sales are flat, and what we do is find specific vehicles, understand what their market potential is, understand what their shopper behavior has been, and then go out and find people who want those exact vehicles that are in the area at that specific dealership.
Kelly: Explain to us the process of determining a motivated buyer and how the LotLinx retargeting process kicks in to drive VDP views. Or, is it retargeting at all?
Jason: We base all of our data on Google Analytics, we integrate with the dealer’s website, so we know by VIN every single thing that has gone on with that vehicle. We’re able to identify vehicles that are under-engaged. We also have all of the shopper demand based on their make, model, year, zip code, and search behavior, so when those two things match up, our artificial intelligence says, ‘Hey we can influence this shopper right now, on this publication, we can advertise the vehicle anywhere online, and it links to the dealership’s VDP for that VIN.’
Kelly: Let’s talk about the amount of VDPs that guarantee a vehicle to move and what does LotLinx do to further motivate that buyer? Is it retargeting ads? How does it work?
Jason: I think that VDPs are a very gross, large measurement. What we find that is actually far more important and impactful is engagement. Did the shopper get to the site? That’s great, but did they look at photos? Did they start a chat? Did they do a text? Did they fill out a lead form? Those engagements are far more predictive of sales. Because we’re integrated with a dealer’s website, we’re able to see those shoppers that we’ve sent and what they’ve done. Are they engaged, how much are they engaged, and that drives the initial activity – and frankly, a measure of activity that we put back into the system. We don’t do retargeting – that’s something the dealership should be doing. They should be incentivizing [shoppers] with their unique selling proposition, they should be bringing them back, they should be doing specials. Ideally, we are just getting those folks in the digital showroom door, and then dealers do what dealers do which is close, close, close.
Kelly: Can dealerships rely on most OEMs to participate in covering the cost of applying LotLinx to their vendor lineup? Is cost per lead still under five dollars?
Jason: We talk about cost per shopper. What we charge is the cost of getting someone to the dealership website. That’s $4.99 per shopper delivered – so it’s not per lead, it’s not per click, it’s per unit shopper. We have a lot of co-op reimbursement for many OEMs, and I think that dealers can count on that. That’s good for cases of New, and in some cases good for CPO, it’s not necessarily going to help them with their used business. We work with new, used, and CPO, but we’re always working to expand that. It’s about how much does it cost to get those engagements – that’s more of a fungible measure.
Kelly: Does LotLinx have its own inventory or do you rely on a chain of third-party classifieds?
Jason: We work with third-party classifieds, we work with custom integrations, we work with all of the ad networks that are out there. Our objective is to be everywhere a shopper could be. It’s not about buying an ad on a website or a publication. It’s about getting that specific VIN in front of the right shopper. Wherever a person goes, that’s where we want to be. Our ability is to put that ad in front of them anywhere online if we chose to.
Kelly: What’s the general time frame from lead to close after LotLinx gets them on their site?
Jason: We see the purchase cycle being somewhere between 45 to 60 days, and we really try to focus on the final days – the last few weeks, to get them when they are very close to deciding what to buy and where, and just pushing them over the edge to activate them to get them to the store. We see most of those folks haven’t made that decision because the vast majority of our traffic is net new to the dealer – meaning they haven’t been to their website before. So, we get the right folks, we get them at the right time, and we put them to the right store, and I think that’s of critical importance.
Kelly: How many dealers do you currently have in your network?
Jason: When you look at our manufacturing programs and our Tier I and Tier II activities with our Tier III, we’re north of 5,000 and south of 10,000 dealers.
Kelly: What are some of your primary advertising channels? Or is it all about visibility?
Jason: We’ve been blessed with a lot of word of mouth because the results are so good that people will talk about it. There’s a great story we have where all of the sudden, we got a bunch of phone calls from somewhere in Iowa, and it was because someone was having a 20 Group there and talked about LotLinx, and a bunch of people in the group said ‘I need some of that.’ That has been a big thing. We do less traditional advertising because I think it’s a way to reach folks, but a lot of dealers have been blacking it out, so for us, we’re successful with events, thought pieces, reaching out to people, and just executing on the things we’ve done. We have a manufacturer’s program, it’s great to reach out to those dealers, share those results, and very often they come on direct.
Kelly: No question that LotLinx is a sweet marketing niche – who’s idea was it to begin with?
Jason: It’s been a labor of love for many years. We incorporated the business in 2012 and it was really out of a previous business that was struggling. There were three primary co-founders: Len Short, Rob Vucic, and myself. It was really about finding that niche and grinding it out, and adapting as we added layers on like artificial intelligence, machine learning, and expanding the channel.
Kelly: What does 2019 have in store for you guys?
Jason: There’s always something exciting in store for us. I think the biggest thing is SEM /AI/. We see the ubiquity of search engine marketing in the industry and it’s really not very efficient. We see loading costs and declining performance, so what we’ve done is turn our artificial intelligence system onto optimizing the bidding, the key terms, and creating a VIN specific strategy for SEM campaigns. We see results that are 50% or greater below costs, so lower costs, and 3, 4, 5, 6x increase in engagement. So half the costs are better and 3-5x better performance, all because the system is smarter. We joke about the machines winning but, it’s kinda true.
Kelly: Well sounds like LotLinx is winning and Jason Knight is winning. We’re big fans.