Melanie Unsleber, Manager at Simon-Kucher & Partners spoke at AutosBuzz about value-to-customer modelling and how to create a simple approach to boost ARPA.

The first question dealers need to ask is how much value do you deliver to the customers and do you have data to prove it?

We want to give transparency to dealers, but if platforms don’t know this information, how can they be sure?

It’s important because customers don’t buy products for themselves but for the value and benefits they get from the products.

Most platforms have little connection between price and value. It is a misalignment of value and price to leads and increases the churn rate.

If they pay too much for the value you deliver they will leave.

So, what is the solution?

“Marketplaces and platforms need to calculate the value they give to dealer,” said Unsleber.

“Leads are just a number. The value comes from expected commission levels. The good news is that it can be easily valued approximately.

“We can calculate how many they sold, the average prices and the dealer margin to get the commission levels and price to value ratio.

“If they have to pay high prices for the value they get they may leave.”

A low price to value ratio brings opportunities and ways to monetise.

“We can find out the price to value ratio and present it to them, so dealers can see what they get in return,” she said.

The service integrates price to value ratios into dashboards and is used for price adjustments and sales initiatives, providing information on which customers to talk to and what products to offer them.

“It can be used as an input for many decisions. This means we can decrease prices for customers who are considering leaving and harmonize the price to value ratio, decrease churn rate and increase revenue,” said Unsleber.

“We can also increase prices if they are already getting a lot of value from the platform.

Print Friendly, PDF & Email

Related Articles