VALUE FRAMEWORK

CONTEXT

Research done at CarMax for the purpose of understanding and improving how customers sell cars to CarMax.

PROCESS

WHAT'S IT LIKE TO SELL A CAR?

Through in-context observation in CarMax stores, competitive analysis, interviews, and stalking places like Reddit or consumer review sites, this is the model I built of the typical car selling journey.

Catalyst: An event that prompts selling

Learning: What is my car worth?

Comparing: Who will pay me what it's worth?

Transacting: Actually selling the car

As the seller moves through this journey, the car's price gets more and more definite. Unfortunately, though, this often looks like a marked decrease over time. With the drop in price comes a rise in frustration.

I came to realize that the primary cause of this frustration is that the qualities and standards by which a seller values their car don't match those of the pricing sources.

HOW DO SELLERS VALUE THEIR CARS?

To find out, I invited several participants to a parking lot. They looked at a CarMax car, and then at their own car. For each one they answered several questions about how much they thought it was worth, why they thought that, and how much they would buy or sell it for.

My goal was to understand what customers value in cars, and how that is reflected in monetary values. I also hoped to see if their ideas of value would be different for their car vs. another car. We recorded our observations, and found eight value anchors:

Source

Brand Trust

Features

Miles (per year)

Condition

Market

Offsetting Loss

Authority

These eight anchors showed up more strongly at some times than others. When considering which ones to focus on further, I chose condition, market and offsetting loss. These three promised the best combination of being important to sellers while also being areas in which CarMax could provide transparency. 

HOW MIGHT WE MAKE OFFERS THAT REFLECT THEIR VALUES?

Through a few small tests to gather more information on these three anchors, I learned how they factor into determining the fairness of an offer. By collaborating with another designer, who had been looking at how customers are attached to their cars, we created this:

OFFER PERCEPTION

VALUE PERCEPTION

Situation

Equity

Transparency

Sentiment

Parity

Empathy

This framework represents how customers need to see their ideas of value reflected in the offer for their car. Because they have put time/money, attachment and effort into their car, they need an offer that cares about these factors, and is comparable (in price and effort) to other offers or methods of selling.

MARKET DEEP DIVE

In order to start testing applications of this framework, I had to find out a little bit more about the "market" anchor. Back in the parking lot experiment, a good idea of the market was a very strong indicator of being able to accurately predict value — it was more effective than just being knowledgeable about the car itself.

But I found out that most people don't have a good idea of the market. The "market price" of a car varies based on time and location. Basically, I like to picture it like the stock market. However, for people I talked to, they thought the market price of their car changed once a year. I like to think that this is caused by the depreciation fairy, who knocks $1,000 or so off of your car's value every year on its birthday.

Virginia Adamson | July 2020