Maximizing Upsells: How car makers leverage packages and trims

A brief exploration of how packaging and trim structures drive revenue and how each OEM differs in approach

Introduction

For this article we’ve used a subset of VehiclePlannerPlus data to analyze over 2 Million VINs across 25 brands to interpret which trims are most commonly sold and how much package revenue is being upsold to determine which brands extract the most revenue and how they do it. We then dig one level deeper to analyze which feature types play the biggest part in this package revenue.

Which OEMs extract the most upsell revenue per VIN?

In this chart we plot the average per vehicle spend by brand, split between Trim & Package revenue, using this view, not only can we see who extracts the most upsell revenue, but how they do it.

Overperformers & Underperformers - Who Extracts the most revenue from packaging and trim upgrades?

The chart below shows the average incremental trim revenue (revenue above the MSRP of the base trim) against the average incremental package revenue achieved by each brand. In this analysis we found that mainstream brands typically have a more balanced approach to trim vs package upselling, with the main difference being how effective they are. Premium brands on the other hand are a bit more complicated, we found a pretty strong inverse correlation between Trim Upsell & Package upsell with almost all premium brands, suggesting a stronger opportunity cost between the two upsell methods.

Which OEMs rely most exclusively on Trim Upgrades Or Packages For Upsale Revenue?

We composed this chart to show the 3 brands for both Mainstream & Premium Types that focused most exclusively on Trim upgrades or package upgrades to drive incremental revenue. To do this we compared them to their brand type mean i.e. for mainstream brands we used the mainstream average for trim and package share and vice versa.

Which model from each segment extracts the most revenue above base MSRP ?

This insight shows the top model performers for each segment and displays the average additional revenue these vehicles generate. We also identified specific cases where vehicle models over-performed the market in package revenue extraction. GMC had a strong showing with the Yukon and Sierra 1500, driven by Comfort & Safety related packages, while Mercedes-Benz also performed very well, with their GLS standing out especially with it's Infotainment derived revenue.

Where does each OEMs package revenue come from?

When considering the entire market, Comfort related packages on average earn the highest percentage upsell revenue with 31 percent, and Convenience features make up the lowest percentage of revenue at 15 percent, however, this differs significantly by brand. This insight shows the differing percentages of package revenue that come from the 4 feature categories mentioned, it shows just how different these approaches can be and what that means for revenue. Note that features outside of the scope of these 4 categories were not considered in this calculation e.g. style.

Final Thoughts

As we can see, understanding the complex world of packaging and trim structures is becoming increasingly difficult as OEMs find innovate ways to position their offerings to maximize revenues.

VehiclePlannerPlus helped us dig deeper than ever before into this paradigm and understand the winners and losers in this space. We strongly feel that this space is going to become even more complex and competitive as customers become ever more educated.

Appendix

Methodology & Data Considerations

• Model Year 2019 used for this analysis
• Uses Proprietary SBD Automotive VIN Data from VehiclePlannerPlus
• Analyzed all brands within Mainstream and premium brand types, luxury brands such as Aston Martin were excluded.
• All results were VIN weighted, reflecting real market conditions
• Used VehiclePlannerPlus Vehicle Segmentation
• Honda & Acura excluded from analysis due to strict trim only strategy