So, the dealers who — maybe not surprisingly, who tend to be more reactive in the immediate moment in the real time, tend to be the smaller dealers that are operating more like entrepreneurs and less like bigger businesses who are running on budgets and forecasts. And so, you see that mix with us. What makes us have confidence is that with our ROI value proposition, that plays well in any environment. And I think increasingly, dealers are seeing that they believe and we have — we believe, we’re confident that we’ve always had a really strong ROI. But now as we are really improving the quality of our leads through things like Digital Deal, they’re starting to also realize that quality is very important because many dealers remember, don’t have the same size sales forces that they used to have.
And so, they need to try to handle or manage or service a certain volume of leads with fewer people. And so, the higher the quality of the lead, the higher the conversion rate, the more they can handle with a smaller sales force.
Operator: Our next question comes from the line of Marvin Fong with BTIG.
Marvin Fong: Just thought I’d follow up a bit on IMCO. I appreciate that you guys have dialed back the marketing there and improving the operations. I’m just curious about the bidding prices between the sellers and buyers, I think you guys said in prior quarters, but that also kind of needed a readjustment for sellers to kind of realize that car prices have come down, that sort of thing. And of course, the rental agencies are no longer those aggressive bidders. So just curious if you could kind of shed some light on how — are the prices getting narrower between sellers and buyers? And then, I have a follow-up.
Sam Zales: Hey Marvin, it’s Sam Zales. Thanks very much. I think they’re — yes, they’re getting narrower in the definition you’re using. I think the real situation right now is that consumers for the first six months of 2022 had incredible market opportunity to sell their vehicles at the highest prices they’ve ever been from a wholesale perspective. And I think any time in that environment, we had aggressive buyers in there, and we had a significant transaction volume because dealers were willing to pay anything in a rising tide environment to do so. I think the macro environment is just telling you consumers may be thinking they could go back to what their vehicle was worth six months ago, and it’s not worth that today. The consumer demand for purchasing vehicles is down.
So dealers are depressed in their bid prices right now on the program. So, I don’t think we’re any less competitive. We’re really just following the market trends right now, consumers hanging on to their vehicles and not selling as much and the bids lower because there isn’t as much demand for buying vehicles at the retail area right now with interest rates and other things, and it’s leaving us with less volume. I think you’ll also see that we’re being smart in saying with all these changes we’ve made operationally. The reduction in marketing expense when we know we’re failing more vehicles with our inspections, we’re being tighter on our processes and our data. We’re just going to be careful about how aggressive we’re going into that market.
So, we’re starting to see pricing sort of lift a little bit in the new year, but I think it’s too early to tell whether we’re on another upswing again. And if we are, I think you’ll see more of that balance in the buy-sell price and consumers will get more aggressive, and we’ll have more bids that will work on that front as we go forward.
