In this transcribed episode of the Used Car Dealer Podcast, Zach interviews two special guests from Cox Automotive: Jade Terreberry (Sr. Director, Strategic Planning & Business Development) and Micah Tindor (Sr. Dir. Strategic Planning Kelley Blue Book ICO). They cover a range of topics relevant to today’s used car market, from digital advertising strategies to inventory management and customer retention.
Zach:
Zach here. And today we have a special episode of the podcast. We actually have two guests from Cox Automotive: Jade Terreberry, the Senior Director of Strategic Planning and Business Development, and Micah Tindor, the Senior Director of Strategic Planning at Kelley Blue Book ICO. It’s going to be a great episode, and I appreciate both of you coming on the podcast today.
Jade:
We’re happy to be here with you, Zach.
Micah:
It’s great to be with you. Thanks for having us!
Zach:
To kind of kick things off, I want to ask both of you an icebreaker and learn about how you got into the auto business. So, Jade, I’ll start with you.
Jade:
Sure. So my dad was at the same dealership for 40-plus years. And so, as a child, I spent my weekends starting about age six or seven answering the reception desk and sitting in my high chair at age two, listening to him practice for Honda National Walk-Around Competitions. He was the top Honda salesperson, or top 10 in the country, for many years of his career. And so, growing up in an automotive household, I had to negotiate to eat and to get clothes. Right? I mean, you just kind of grow up, and it’s in your blood. And so, I’m glad to now be making an impact and helping dealers navigate these wild times we’re living in.
Zach:
Very cool. And how about you, Micah?
Micah:
I also grew up in it, but the opposite way that most people did. When I was four, my dad left my family’s coal mine in Eastern Ohio and started doing interior repairs on used cars. So I actually grew up in the reconditioning side of the dealership world. Like Jade, I would ride along with my dad to work, and I was doing burn hole repairs on carpets when I was 8, 9, and 10. I went off after I graduated college and worked for an NGO for about five years and ended up making my way back into the automotive industry, like so many people do, and started the carpet division of my dad’s company. From there, I grew into technology companies, did all kinds of other stuff. But for me, it all started with growing up with someone who was in the industry, him not wanting me to be in the industry, and me ending up in the industry anyways. And I love it.
Zach:
Very cool. Love both of your stories. And, you know, Jade, to get things kicked off, I wanted to ask you a question. How has digital advertising evolved for used car dealers, and what role do platforms like Kelley Blue Book and Autotrader play in helping dealers better connect with consumers?
Jade:
You will hear me say often that it's not digital retailing anymore; it's just retailing. It's really the same thing on the advertising front. It's not digital advertising because even what used to be traditional mediums for our clients—television, radio—even those are digital platforms now. And we often say as well that what happens on your virtual lot, which is anywhere digitally that a consumer can interact with your brand or your inventory, that's the most direct indicator of what's getting ready to happen on your physical lot. And so data is the key. Using all of those digital platforms, using partners like Autotrader and Kelley that have huge identity graphs and have the ability to procure audiences so that you can be really specific with how you serve messaging, content, and vehicles to the right consumer at the right time, and then measure what's working or what's not, that’s what this digital world has unlocked for our dealers. It’s about closing the blind spot and making the best decisions to get the right message or the right inventory to the right customer.
Zach:
Definitely agree with that. And Micah, what best practices can dealers or used car dealers specifically implement when merchandising their vehicles online to stand out in the very competitive digital marketplace?
Micah:
There are two that I'll touch on, but I’m also going to ask Jade to tag on to this because dealers nonstop request that she comes to their dealer group and talk about this. So she has some massive expertise here. The two that have to happen right now: you have to have short videos. Everyone watches everything via video, right? TikTok, Threads—no one sits down and reads things anymore. We all watch videos, and if you don't have videos that are concise and to the point, and then additional follow-up videos that your staff are making for people individually, you’re really going to struggle to get, particularly, Gen Z eyeballs on your vehicle. And then secondly, pay attention to your reviews. Particularly for the younger generation, we all go to reviews when we're trying to figure out what we want to buy. Reviews can make or break you right now when it comes to someone spending that 13.5 hours that it takes them to go through that shopping process. If your reviews are struggling, you're going to have a hard time bringing that customer from the digital to the physical in the omni-channel world. But I do want to kick it to Jade because this is a question that she gets asked all the time, and I always like the answer she gives.
Jade:
Well, I may even take a different direction, Micah. You know, what used to be merchandising excellence was what pushed consumers through the funnel. If you had the right number of photos, the right video, the right content, the right custom comments—those things were hugely important. But now they're not a differentiator; they are what consumers absolutely demand. We used to say, "Give consumers what they want, give consumers what they need." And now consumers, if you don’t have the things they're expecting, they’re not going to look at your inventory, convert on your inventory, and ultimately give you an opportunity to do business.
And to swing it back, the other big one in this category is price. We talk about it a lot. And as we go through the supply and demand imbalance equations that we’ve seen so many of over the last 10 years, price is still so important. I still see so many dealers that start here, knowing they're going to sell it between day 30 and day 40. You have data at your fingertips that tells you the price and the way consumers start shopping—just about every consumer search starts with "the vehicle I want in the price range that I’m willing to pay and the distance I’m willing to drive to get it." So not only do you have to have all those merchandising pieces firing on all cylinders if you want them to click on it, connect, and ultimately submit something so that you have an opportunity to work and create a real sale, but you have to price it right. Don’t price it in a way that you’ll have to sit on it for a month before you start getting the activity you should be having on it right now.
Zach:
Jade, you're kind of touching on my next question, which is: What impact do price fluctuations in the used car market have on dealers, and how should they approach their advertising and merchandising strategies?
Jade:
The ones that use data, real-time data, as part of their daily operating control—not pricing vehicles once a week or pricing vehicles when they get them in stock and then on the 15th day and then the 30th day—the ones that are living, eating, and breathing and making real-time data part of their daily operating control are winning. And not just on the supply and demand changes or, you know, the world that we're in this week—it might be a flood, it might be a hurricane, it might be a biochemical plant fire. There are just so many constant changes that the dealers who have figured out when to mark up, when to come down, and how to keep their finger on the pulse of supply and demand, not only in their own backyard but in any of the markets where they’re now distance retailing, they’ve expanded their footprint. They have this massive addressable market that is so much bigger than just somebody who's going to drive by or lives in that 20-, 65-, or 100-mile drive distance radius. So I would say use data, and use it in real time, every single day to look at every single piece of inventory in stock. If you can make more, make more. If you need to adjust so that you don’t have that sitting on the lot too long, data is the way to do it.
Micah:
I’ll jump in real quick on the back end of that. Jade mentioned earlier that the advertising side is married exactly with the pricing side. You can’t merchandise and advertise without pricing correctly. And just like there, you have to use the data when it comes to advertising and merchandising. You have to be really sharp now, using data to make sure you price correctly from the beginning and really appraise the vehicle correctly so you have the opportunity to price it right. I want to bring that back to what Jade said—those two need to go hand in hand for any dealer to be successful right now. If you think of a world where, last year, Elon Musk cut the price of Tesla by $20,000 one day, your used car inventory was down $20,000 on a Model Y.
Zach:
Micah, with inventory shortages still affecting the industry, how can dealers optimize their stock to meet customer demands without overextending on purchases?
Micah:
There are three things I always talk about with dealers on this front. One of them is to sell everything, as long as it’s within your inventory management strategy. What I mean by that is, if you’re taking a variable inventory management model, which we suggest everyone takes, for certain vehicles, you should hold them for gross; other vehicles, you should take a velocity approach and sell them as fast as possible for a lower profit. If it’s within that target area that you want to hit, don’t hold out for an extra 50 bucks or 100 bucks. If you have a customer who's willing to buy, and a trade-in that you can bring in along with it, a customer you can put into your CRM and follow up with for the next 10 years—make the deal. Don’t step over dollars to pick up a dollar and one cent on that sort of sale.
Secondly, really leverage your consumer buying opportunities. A lot of times, dealers get out over their skis because they get into an auction environment, or they get into an environment where they want the car. And we all have that tendency—fear of loss is a bigger motivator than the opportunity for gains. We all have that tendency to overpay on a car. With consumer opportunities, it’s you and them at that exact moment. Now, consumers are price shopping like crazy. But in that exact moment, it’s you and them. It gives you the opportunity to sit down with someone, walk them through, and educate them on why you’re pricing it there. It gives you an opportunity to get a car at a good deal—not steal, but get a good deal.
And lastly, one of the ways you can really optimize your stock is to recon your cars quicker. That’s a very atypical answer, but the average dealer takes 12 to 14 days to recon a vehicle. If you ask a dealer, they’ll say 3 to 6 days, but it’s really 12 to 14 days when you account for interior, exterior, mechanical, and cosmetic. That’s 20% of a lot of dealers' floor plan time. So if you want to make sure that you’re optimizing your stock so you can sell things to a customer when they walk on the lot, you’ve got to make sure you recon it quickly too. So it’s sell everything within your strategy, leverage those consumer car buying opportunities, and quick recon.
Zach:
Jade, how do you see dealers using data analytics to better predict which vehicles will move quickly off the lot and which might require more creative marketing?
Jade:
I go back to that—make data part of your daily operating control. There are so many ways you can use the real-time data that happens on your virtual lot to manage your physical inventory. Some of it sounds simple, like the vehicles that had the most virtual drive-bys over the last 24 hours or over the three days from the time you bought it and it came onto your virtual stock before it actually arrived at your location. Use that data to determine what order to recondition them, which ones are most likely to have somebody walking in on Saturday to take a look at. Look at how much activity you have. Don’t send the dealer or the GM’s wife to the beach over the weekend with her girlfriends, or don’t put it out on an overnight test drive, or don’t send it as a service loaner while a vehicle’s getting warranty work done if it’s something you know you’re going to potentially have somebody walking in on.
So, there are so many ways dealers can use real-time data, not only to manage physical lot inventory but also to decide where they need to pull levers. A lot of those levers are audience activation or getting more eyeballs on certain vehicles. Spotlight those cars. Give more consumers an opportunity to see them online. But a lot of that also comes down to pulling those pricing and merchandising levers we talked about a few minutes ago. In digital marketing, we can flip a switch and drive 10,000 VDPs in a day on just about any piece of inventory on our lot. But if you don’t have it priced right and merchandised right, so consumers move through the funnel and contact you, giving you an opportunity to do business, you’re missing out on all of those dollars, and you’re just wasting money with that piece of inventory sitting on your lot.
Zach:
And what strategies, Jade, are you seeing dealers use to source inventory in today’s market, especially through trade-ins or service lane acquisitions?
Jade:
Those are the two big ones—trade-ins, service lane acquisitions. And I’m going to add one more to the list: trade-in leads. As dealers are working leads, we have some superstars who know how to talk to a consumer that has gotten a value on their car and convert that into a real opportunity to sell or acquire a car. And then we have some who have those leads set up on the same round-robin as a "build-your-own" lead or maybe a digital retailing lead. They are two totally and completely different animals. We know that the most profitable vehicle any of our customers can acquire is a trade-in, something that comes through their service lane, something that they know the history on, and they’ve done the service on. So we talk a lot about processes, and I’m going to bump this one to Micah because this is his area of expertise. Dealers that have sound, consistent processes for how their service lanes are getting worked, how their trade-in leads are getting worked, and how they are consistently pricing trade-ins so that they make a deal out of every deal—those are the ones that are winning.
Micah:
And obviously they put a lot of practices in place, but it's very doable now if you get the right tech stack and focus on the service side. The only thing you have to do now is meet the unmet needs of the consumer. The trade-in market has changed completely during COVID. Consumers now have 2.6 cash offers on average when they hit a dealership. Millennials, Gen Zs have somewhere between four and seven when they hit a dealership. And that comes now with some expectations from a consumer because they did their research. Instead of trying to sell them on giving us the car, we have to educate them. We've switched over to being trade-in consultants and try to walk the customer down the path of understanding why our value is there—what's important about their vehicle, what's detracting value from their vehicle, and what the market condition is for their vehicle. That’s how you start to really win both the service drive and those customer acquisitions—when you focus on what the customer needs as part of that trade-in process.
Zach:
And how can dealers leverage tools like KBB ICO to stay competitive in vehicle acquisitions?
Micah:
There are two major ways. For anyone who doesn’t know, Kelley Blue Book Instant Cash Offer is an opportunity for consumers to trade their vehicle into a dealership. It’s a direct path. And the first piece is, you were talking about the benefit of a platform to a dealer partner earlier in the conversation. The real benefit in this case is that Kelley Blue Book is the industry’s most trusted brand. As a result, it starts the customer on that trusted site, and it starts the dealer’s engagement with the trust bridge—what we like to talk about. They trust the KBB number, they trust the self-examination they do of a trade-in, and we then bridge that trust over to a dealership. This lets the dealer and consumer start on equal footing. The number one concern that consumers have is getting ripped off. So, when you have a third party like Kelley Blue Book providing that external value to the consumer, and then the dealer uses that as a starting point for their negotiation, it takes away a lot of the conflict that comes with talking about money.
The other benefit is we are obsessed with what it takes for a consumer to trade in a vehicle. That’s all I think about all day long—how do we trade in a vehicle, how do you appraise a vehicle? And one of the things we have done over the last 15 years is hone the tool to meet the four unmet needs that consumers have during the trade-in process. So instead of you as a dealer having to sit down, do research on what those unmet needs are, and try to build a tool to solve for them, you can partner with us. We spend our entire day thinking about it and have a tool that automatically solves for those customers' unmet needs. There’s less work on you at the dealership, and you can focus on engaging the customer, providing them with a top-quality experience, and selling them a car as part of that trade-in.
Zach:
And, Jade, kind of shifting gears—what strategies can dealerships implement to improve customer retention, particularly with the used car buyer who might have a different purchase cycle than a new car buyer?
Jade:
That’s a great one. And I’m actually going to hit on a couple of the things that Micah said there, but I want to reiterate one thing from the last comment, which is that pay plans drive behaviors. There are all of these transformational things happening in a dealership organization, and that goes hand in hand with what you just asked about used car consumer retention. The used car purchase life cycle is different, and every touchpoint matters. That comes down to trust and processes to keep that consumer attached to you every step of the way.
Zach, one of the things we see in our data that we've always known is that consumers start with this big, wide net they cast, generally in the area where they’re buying. They want to go physically, see it, touch it, and feel it. The area they’re willing to drive to get the best price for the vehicle they want. But what we see is all the steps in between that initial contact and when they actually get ready to transition, either to in-store or maybe a fully automated e-commerce purchase. All of those touchpoints are opportunities to either build trust or throw it out the window. They are literally weeding out dealerships, not cars, in that whole middle part of the process.
So, when you think about the used car buying cycle, depending on supply and demand imbalance—we know we’re getting ready to see a lot more of that because of some recent natural disasters, because of the off-lease and inventory shortage. This whole inventory dynamic is going to continue to look different. But the biggest piece of advice I have is that the dealers who are winning are the ones who realize every single touchpoint counts. And I also come back to all of the points Micah made around appraisals and virtual trade-in valuations.
The average consumer—I think this is the craziest stat I’ve heard in years in this business, and I ran analytics for all of our consumer brands for half a decade with Cox—but every single consumer who walks into a dealership has somewhere between two and seven offers in their hands, and those offers have a spread of a couple thousand dollars in most cases. So you think about how important trust is in that process—how can a consumer trust the valuation if you’re not giving them and educating them with data on what that really means? All the things they hated for years about the hassle and haggling, negotiation, and game-playing over a vehicle’s price—that’s now just flipped over to the appraisal and trade evaluation. So, every touchpoint matters. The way a used car consumer searches is very different from how a new car consumer searches, but that means you’ve got to keep even better attachment, timeliness of follow-up, and direct answers to everything they ask you and everything they want to know every step of the way.
Zach:
And, Jade, a follow-up—how important is the post-sale experience for used car customers, and what retention strategies should dealerships focus on to keep these customers engaged?
Jade:
Used and new are both highly important when it comes to customer retention and lifetime value of a consumer—we talk about it all the time. But as more steps of the variable ops side of the transaction and the purchase journey—the research, exploring, comparing, building trust, and structuring their deal—as more of those things happen online via virtual tools, it's a good thing for the dealership if they embrace it, because that’s where incremental gains and efficiencies can come from. But it makes retention on the fixed ops side even more important than ever before because you think about the cycle in which consumers service: maintenance, repair, recall, warranty. That is your opportunity to keep your brand, your energy, and the relationship going with that customer.
And so, it does look a little bit different on the new car side versus the used car side. You asked about used, and I would say most consumers are unaware that they can service any brand at just about any franchise dealership location. There’s a lot of consumer misinformation or misunderstandings. A lot of consumers think that franchise dealership locations are much more expensive than an independent service or repair shop. This comes down to exactly what we’ve said in just about every answer we've given today—it comes down to data and education. Being transparent and having tools like KBB Service and Repair. Of course, we have KBB Fair Repair Pricing, the most trusted brand in automotive. A lot of our dealers don’t realize that we have millions of consumers who organically come through KBB every single month, looking at recalls and looking at fair repair pricing. There are opportunities to merchandise their business there.
So I would say focus on fixed ops retention, advertising, staying in front of the consumer. The other piece is that there’s this huge new addressable market on the fixed ops side for dealers in the used car space because so many consumers are purchasing from far away. I hear dealers say all the time, "Oh, we don’t want to distance retail because we don’t have the opportunity to retain their service business." The truth is, you're playing in that world whether you think you are or not because the dealer 100 miles away and 500 miles away is advertising his inventory in your own backyard. But that means that when that consumer buys from him, you still have an opportunity for him to service with you. So spending dollars on service retention for used cars and really partnering with somebody who knows audiences and has enough consumer data to know when a consumer is in the market for service or repair or warranty or to purchase a car—that’s key. It’s all about audience data and being able to activate on it with the right message.
Micah:
Can I add one very tactical action a dealer can take?
Zach:
Sure.
Micah:
Introduce the customer to the service department. It sounds ridiculous that I say that, right? Common sense. The last Cox survey said that 15%—only 15%—of customers got introduced to the service department. So if you can execute at 80% as a dealership, you have a massive advantage over your competitors in starting the retention cycle, just by having a simple introduction.
Zach:
I couldn't agree more. And last question for you, Micah—this podcast has just zoomed by. As electric vehicles continue to grow in market share, what should used car dealers do to stay ahead of the transition, particularly when it comes to inventory management and consumer education?
Micah:
Two things. One is make sure everyone in your dealership is taking the educational courses you have available. So, whether it’s through whatever brand you’re aligned to, or if you’re an independent and have a standalone training program, we see a lot of dealers try to create a hub of expertise around EVs in their dealership. What happens when that hub is occupied, on vacation, or taking a nap—whatever the scenario is? When a customer shows up at a dealership, they show up because they’re ready to interact and they want to move forward on a deal. They want to test drive a car. They’ve already done their online shopping—out of the 13.5 hours a customer spends to get ready to buy a car, only 2.5 of those hours are spent at the dealership. So that means they’re there when they’re ready to go. If your EV-educated staff aren’t ready to go, or if you don’t have someone to help them understand how to do a tax credit, how to register for a home charger, or how to get a tax rebate in certain states—make sure everyone is educated.
And secondly, when you own them as a used vehicle, really trust your inventory management tool. If you don’t trust your inventory management tool, find a new one. When it comes to pricing EVs, very few people's gut instincts are right. For so many years, you could price by gut, and there are a lot of experts who could accurately price by gut. You can’t price by gut with EVs anymore. You need something that helps you understand the battery’s state, its health, whether there are price changes, or if there are incentives attached. What’s the state-level incentive? What’s the federal incentive? Does it qualify for an incentive? You need a platform, and you need to trust your inventory management tool to help you get the right price at appraisal and the right price when it comes time to start merchandising.
Zach:
And my last question for both of you—what’s new and exciting that’s coming down the pipeline this year for your teams?
Jade:
I’ll go first. From the consumer side, we are so excited to fully enable the omni-channel experience that consumers have wanted for so long. Do as much or as little, all or none of the steps of the sale online to in-store, and then a lot of times we see the consumer come in-store and then they want to go back online. So, dealers that are embracing tools that allow the consumer to have that omni-channel experience that they want are winning. The smartest audience data will continue to build and power the personalization engines of every product we have, but that's all around driving better return on investment and better return on advertising spend for our dealers, and then a more personalized and connected experience for our consumers.
Micah:
What I'm excited about is a sneak peek that is going to be first talked about on your show. It is an impending appraisal integration between vAuto and Kelley Blue Book. It’s really going to enhance the way that dealers do appraisals. One of the things we know—ask anybody in the automotive industry: if you have four people appraising cars, how many different values do you get? The answer is always four. There needs to be some standardization around the appraisal process, and it needs to be able to account for interior condition, exterior condition, and then present that information to the customer in a way that walks them down that knowledge path and builds trust. We really think by merging the trust element of Kelley Blue Book with the inventory management side of vAuto, we’re going to have a really, really interesting appraisal capability here that people can come see at NADA 2025.
Zach:
Very cool. Thanks for the exclusive! Micah and Jade, it’s been a pleasure having you on the podcast. I’ve learned a lot, and hopefully the audience has as well. Thanks so much for joining us today.
Jade:
Thanks for having us, Zach.
Micah:
Appreciate the invite, Zach. Good to be with you.