实例探究 > Optimizing Vehicle Sales Incentives

Optimizing Vehicle Sales Incentives

公司规模

1,000+

地区

America

国家

United States

产品

APT Test & Learn

技术栈

Test & Learn software

实施规模

Enterprise-wide Deployment

影响指标

Customer Satisfaction
Productivity Improvements
Revenue Growth

技术

分析与建模 - 预测分析
分析与建模 - 实时分析

适用行业

汽车

适用功能

商业运营
销售与市场营销

服务

软件设计与工程服务
系统集成

关于客户

Automakers are innovative organizations, constantly experimenting to improve the performance, aesthetics, and safety of new cars. Automotive leaders are now bringing that spirit of innovation and experimentation to other parts of the business to optimize the profit impact of key strategic initiatives. This Test & Learn approach can identify which ideas across the business are truly profitable and where they will work best. Consumer and dealer incentives are among the biggest levers that automakers can pull to move metal and drive revenue; thus, they represent one of the greatest opportunities for in-market business experimentation. Conducting such experiments can determine if incentives are truly driving incremental sales or if they are instead encouraging behavior that would have occurred anyway. Beyond identifying which incentive programs work, Test & Learn can identify which incentive formats (e.g., payout value, goal structure, model inclusion) are most effective and in which types of dealerships they work best. Optimizing each incentive program in this way can generate millions of dollars in incremental profit improvement annually.

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挑战

A top ten auto manufacturer often deployed incentive programs to its dealerships, but given the inherent variability in its daily vehicle sales, struggled to understand their effectiveness. In one example, the company sought to answer key questions about one of its incentive programs, including: Does the Mid-size Sedan incentive program have a net positive impact on profit, after accounting for previously planned purchases and potential cannibalization of nonincentivized models? Which incentive structure among the two formats tested (Fixed Incentive or Stair-step Incentive) is most effective? In which regions should we offer the incentive program to maximize its profitability?

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解决方案

Using APT’s Test & Learn software, the client analyzed a dealer cash program for its Mid-size Sedan that it had previously run for dealerships in select markets. The software compared 'test dealerships,' where the automaker offered the incentive program, to customized groups of similar 'control dealerships,' where the incentive was not offered, to isolate the incremental profit impact of the program. APT’s rigorous test vs. control analysis showed that the incentive program led to a 21% lift in weekly units for the incentivized Mid-size Sedan model. However, the Compact Sedan model was cannibalized, experiencing a 39% weekly unit decline per dealer throughout the analysis period. Thus, overall the incentive program resulted in a 4% average increase in weekly units per dealer across the incentivized and cannibalized models. Further, the software compared results across the two incentive formats and found that the Stair-step structure was more effective than the Fixed structure, which drove little impact. Additionally, the software automatically analyzed thousands of factors, such as market demographics and dealership attributes, to identify characteristics associated with higher performance. Specifically, the software revealed that the incentive program performed better in dealerships located in lower income areas, with lower prior sales of the incentivized model, and with lower average associate tenure.

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运营影响

APT’s Test & Learn software allowed the automaker to isolate the incremental profit impact of the incentive program by comparing test dealerships to control dealerships.
The software revealed that the incentive program led to a 21% lift in weekly units for the incentivized Mid-size Sedan model.
The analysis showed that the Compact Sedan model was cannibalized, experiencing a 39% weekly unit decline per dealer.
The software identified that the Stair-step incentive structure was more effective than the Fixed structure.
The software's analysis revealed that the incentive program performed better in dealerships located in lower income areas, with lower prior sales of the incentivized model, and with lower average associate tenure.

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数量效益

The incentive program resulted in a 4% average increase in weekly units per dealer across the incentivized and cannibalized models.
The tailored and targeted rollout recommendation improved the program’s profitability, increasing the value of the incentive program by $8MM.

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