CARY, N.C. -

Though CPO sales are roaring along this year at an unprecedented pace, it is sometimes difficult for dealers and manufacturers to convey the value of a certified pre-owned vehicle through advertising.

Why should I buy CPO rather than used? Why does it cost more? What are the benefits? These are all questions most dealers answer every day from potential CPO customers.

So how, exactly, do you convey the value of your CPO vehicles before the customers makes it onto the lot?

Highlighting the Value of CPO

Auto Remarketing called upon Paul Stowe, director of retail operations at NCM Associates Inc. for some insight.

When asked what main attributes dealerships should consider when promoting these models, Stowe cited customer acceptance and sales staff training as a couple of key factors when planning CPO advertising.

Stowe said to advertise CPO departments successfully, dealerships must have “management focus and an element of sales person compensation plans and monthly objective planning.”

In other words, if dealerships don’t buy in fully to a CPO program, neither will their customers.

Larry Pryg, national manager of General Motors certified pre-owned vehicle operations, offered a different perspective, noting, “The biggest thing that dealers can probably advocate about or program and differentiate them from other used cars, because that is an issue we have to get through, is that the program is factory backed, and the fact that it represents a better value. “

To get to this point, Pryg said dealers have to describe all the benefits of the program, such as factory backed warranties and a maintenance program.

These are the elements of CPO most important to consumers, says Pryg, and they help dealers to separate the CPO vehicle from just another used car.

That said, to truly convey the value of a CPO vehicle, dealers may need to slow the sale down and take some time to ask their customers a few questions.

“The car costs more money. So consumers ask, ‘What will I get?’ Simply ask the customer, what would you pay for a year warranty? What would you pay for two years of maintenance? What would you pay for the inspection?” said Pryg.

“And all those things add up to over $2,000 in value. When dealers slow down the customer a bit to explain really what they get for the money, there is no problem selling the vehicle and no problem with gross profit opportunities because there is a great value to the dealer and a great value to the customer,” he continued.

Where to Advertise

For dealerships who have embraced the potential of CPO, how best can they advertise their certified vehicles?

Stowe said franchised dealers should focus on digital marketing since “manufacturers are handling traditional advertising.”

Stowe said he finds too often that dealerships have no digital or minimal presence with regards to CPO on dealership pre-owned websites.

“It has to be digital and it has to be a point-of-sale presence in the dealership, along with a desire to own the CPO market,” Stowe said.

At GM, the focus is on digital marketing, as well.

Pryg attributes much of the OEM’s certified success this year —CPO sales were up 23 percent as of mid-October — has to do with consistently communicating our message.

And a good portion of this communication is done online.

“Most of our ad dollars are spent online because that’s where you can measure and optimize online advertising. We have taken that space very seriously,” Pryg said.

He also shared that since CPO is a small market, every dollar counts in advertising.

“CPO is less than 1 percent of the total spend in the marketplace as an industry. It’s small. So if it’s small, you have got to be very careful with those advertising resources and how you spend them,” Pryg said.

“You can’t go out and do million dollar ads in the Super Bowl. We go where customers go, and I know
everyone on AutoTrader.com is shopping for a car, unlike everyone who is watching the Super Bowl.”
 

Editor's Note: This story appears in the Nov. 1-14 CPO Dealer of the Year edition of Auto Remarketing as part of our coverage on “CPO Trends & Maximizing Sales.”  Be sure to check out this issue for additional insight on sourcing CPO inventory, the certified sales momentum and the relationship between leasing and CPO.