Dealers are always asking me about SETS & SUBSETS. Before I go any further I want to warn you that SETS and SUBSETS are not for everybody. They are especially not for you if you haven’t solved a lot of your other used car issues.
As I say in my workshops, SETS & SUBSETS are the last thing you need to be worrying about. You first need to nail down your processes and ensure that you’ve added the right ones and that the ones you know to be true are not evaporating on you.
I developed SETS & SUBSETS many years ago. Actually I stole it from my good friend Gene Hassell who taught it to me based on a PODS concept. Gene learned PODS from the good folks at the Coggin Group out of Jacksonville, FL. Over the years I refined it, made it better and the rest is history.
I teach SETS & SUBSETS in great detail in my workshops, so trying to explain it in a newsletter does not do it justice, but since so many of you keep asking about it, here you go.
SETS are all about setting up a price leader to drive traffic to the store. The lead or number 1 car is the most important car in the SET. You can do SETS in 2, 3, 4, or 5 car SETS. Experience has taught me that going deeper than 5 just confuses the issue and makes it much more difficult to manage.
The lead car needs to be a rough, high mileage car, ugly car. Make it safe, but don’t make it pretty. The more dents and oil leaks the better. (oh, chill out.) This is not about bait and switch. It’s about the customers transferring themselves to another car in the SET or to one out on the perimeter.
The key to SETS is picking the right lead car. Yes, I said it should be rough, but it needs to be desirable in the “public’s mind,” and most important it should be the latest model you can find for that SET.
There are two sources to determine which SETS you are going to work with. First, it’s based on Internal Data. What used car have you historically done well with? Second, it’s based on External data. Using tools like vAuto, Auto Trader and AutoCount USA, you should be able to figure out what the hottest models are in your area.
You don’t have to do SETS in a 5 car SET. You can do 2, 3, 4, or 5, but don’t do 6, 7, etc. Just trust me on this.
Cars in your SETS must be parked together in a row with the prices clearly marked on them. You want to get a $1500 to $3000 gap between each of the units. You would not want to advertise your lead car at $6995 and your number two car at $12,500. That’s too big of a jump from the lead to the second car.
A SUBSET is a SET with a non-desirable member in it. As an example since a Honda Accord is a pretty good seller in most markets, you might have a Honda Accord SET with a SUBSET tucked in the middle. A good SUBSET car would be a Mitsubishi Gallant. The Accord will drive traffic down the line to the Gallant. The Gallant won’t drive traffic to “nuttin’.”
Two of the biggest mistakes that dealers make is they try to make a profit on the lead car and they pick too nice of a car to be the lead. The lead car is a “loss leader.” More often than not the car dealers pick to be a lead is really a number 2 car. A 2 car is a profit maker and one that you’ve fully reconditioned so you would want to make sure you haven’t made it the lead.
I always tell dealers if you’re going to try SETS call me before you do so. 9 times out of 10 when they describe the lead car, it’s the wrong lead car.
If you want SETS to work you have to advertise your lead car at what you have in it or less. Do not (there is only one definition of do not) try to make a profit on the lead car. The sole purpose of the lead car is to drive traffic to the dealership.
When done correctly one of three things will happen:
1. The customer shows up and buys the lead car. (Ugg!)
2. The customers transfer themselves to the 2, 3, 4 or 5 car. (Yipee)
3. The customer buys something out on the perimeter. (More Yipee)
The key is that the customer showed up on your lot today and you have a chance to sell them something.
So, there it is. SETS described in its simplest form. There’s a bunch more to them than I can’t put in this newsletter. But, remember, I warned you at the beginning of this article, don’t even bother trying SETS until you fix a lot of your other issues first.
That’s all I’m gonna say, Tommy