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Autotrader and VinSolutions; good for dealers?

Alex, you write:

"...I think people like you, Jeff, and me really help to set the stage.  I think we do a lot and bring a lot, but we could possibly be  impeding our dealership's potential in the long term."

I totally agree Alex & this ties right into this thread's theme (smaller companies selling to larger companies).  Visionaries see ideas and get them off the ground.  The SMART visionaries look for the opportunity to get out of the way and hand them off to players skilled in Operations (2 completely different skills)

This is exactly why Founders of companies RARELY evolve into CEOs.

Autotrader and VinSolutions; good for dealers?

Joe - I read your comment over the weekend and one thing didn't sit well with me:  "Look at how hard it was to replace you! ;-)"

To this day I speak to Checkered Flag a lot.  That's my family; I cannot turn my back on them.  With that said my leaving has done a lot for them.  In fact, I would go so far to say that my leaving has helped them to grow more than anything I could have ever done being there.  This is simply because I was not there to do everything.  They had to learn how to do it themselves.

I'm watching all sorts of things happen today that I only dreamed of while I was there.  I'm really liking what I'm seeing!

Your question made me think long and hard about all this over the weekend and I think people like you, Jeff, and me really help to set the stage.  I think we do a lot and bring a lot, but we could possibly be  impeding our dealership's potential in the long term.  Once we get them used to a certain level of performance, maybe it is best to get out of the way.  This way they have to learn it themselves.

I don't know.  Maybe Checkered Flag and Alex Snyder is an anomaly.  Maybe Checkered Flag and Christine Knowles is another anomaly.  Maybe Checkered Flag is the anomaly. 

Your statement got me thinking and I have still not arrived at a final hypothesis.   

Autotrader and VinSolutions; good for dealers?

My $.02 about google:

The vast majority of the web traffic that goes to AutoTrader.com and KBB.com are due to their brand power and marketing efforts. The consumers go directly to their website and skip google. They are household names. The traffic on their sites continue to grow every year.

Could a shopper potentially go to Google to find vehicles in the future? Perhaps... but will the user experience be as good as AutoTrader? I doubt it. A website 100% tailored to the automotive shopper with ratings, reviews, etc will always be the best site.

If I want to get an idea of what my current car is worth, am I going to go to google as well? Nope... KBB.com

Maybe I'm wrong.... but if I look at google's keyword traffic tool for what would seem like a common phrase like "dallas honda accord" the traffic estimate is so low it doesn't register... long tail and vehicle make model searches don't seem to currently exist. "Dallas honda dealer" does show traffic. So people seem to use google to find dealerships and not cars.

Autotrader and VinSolutions; good for dealers?

Alex,

I get what you're saying. Big bulky corporates can't be as nimble as a dealer based solution.

But, there are great inefficiencies in in-house solutions (unless you've hired Rob Fontano  ;-) http://twitter.com/#!/RobFontano

Ck out this GREAT example of the diverse skill sets needed in just a few small digital marketing departments:

Local SEO Best Practices:
There it is all wrapped up in a bow. Local SEO dominance on one actionable page. And it's fresh too (June 3rd 2011)!! Who does the dealer hand that off to? An intern?

2 weeks pass... Woops! Wait a minute, the intern says that Google Paces and the dealer website are tightly integrated and 4 of the TOP10 Local ranking factors are website related. Time to get the another specialist involved.

Here's Local PPC in 8 Easy steps:
Published by SEObook.com, it's authority is beyond question and it details every step nicely.  Who does the dealer hand that off to?

Let's say the Dealer finds the right person to pull this off.

Was it done right?  Does the Dealer have the knowledge and time to police and score their new person's results?

After all that time invested, what if the Dealer's new "Ms Digital SmartyPants" walks out? Dealers don't own the hours invested, nor the mistakes learned from.  Now they have to start it all over again?

Some dealers are DIY, Look at our super Digital Eley Duke slugging it out with the Local SEO puzzle: http://forum.dealerrefresh.com/f43/google-places-your-dealership-1847.html#post14884

Autotrader and VinSolutions; good for dealers?

Joe
For the record I'm not against IPO's nor have any prejudice on this deal.  I love to watch businesses reinvent themselves through brilliant leadership and vision.  I think that AT had to morph into something different and the jury is out on what this individual pieces will add up to.

Autotrader and VinSolutions; good for dealers?

Brian,

I carry a BlockBuster card in my wallet as a reminder of how blind we humans can be AND how changes in the marketplace can completely decimate ANY Goliath it wishes.

Change is a part of life and preparing for change is embraced by experienced leaders.

For example, BlockBuster, Kodak, Xerox and IBM all we're challenged with new threats. IBM has re-invented itself so many times it's part of it's daily operations.  Kodak and Xerox slowly tossed it's legacy business and re-invented itself just before it's last breath.

AT's Chip Perry is doing what smart CEOs do.  Love, cherish and support their core business, but re-invest that wealth and Diversify (aka buy insurance).

Autotrader and VinSolutions; good for dealers?

Alex, I agree, more and more dealers have been "waking up" digitally, but, this digital revolution has been going on for the last decade.

Selling cars is a team sport. The owners & managers are responsible for assembling the team.  If the dealer has a "digital department" they are broke into 2 groups, those that sell (ISMs) and the digital workers (Digital Marketing and Digital Merchandising).

The Dealer needs both players to execute the master plan. 

Dealers got the ISM part figured out, it's the other player they don't have.  If the Dealer is a true progressive they wish to go in-house, they recruit a Digital Marketing and Digital Merchandising person that also knows and loves cars.  This is one rare bird.

Look at how hard it was to replace you! ;-)

Yes, each dealer has individual needs, but, the needs all revolve around the the same Digital Marketing and Digital Merchandising tasks.

-Change my site to reflect this months promotion
-Help me turn aged units
-I need my value-added goodies on my site
-Change my service coupon
-Get our TV commercial on our site
-oh yea, I need all that on FB too
-What's this Pay Per Click stuff?
-How come my store doesn't show for a used car dealer in my area?
-How do I get vehicle comments, do I need them?
-Can the vehicle comments mention my 3 day sale?
-How do I know if my cars are on all the sites?
-Why does my competitor show up with my name on Google?
-I need to email my customers every month
-I need to email my old and cold prospects every month
-I need to work my database to solicit prior customers

-The manuf'er just changed it's incentives!
...and on and on and on...

Each and every one of these requests require a unique digital specialist to execute it.  It's impossible for a dealer to recruit and co-ordinate one specialist for Data base mining another for PPC, another for Local SEO, another for Social Media another for VDP merchandising and so on.

IMO, It's far easier for a digital specialist vendor to staff and provide these services than it is for a dealer to do it in house.

Each and every year the Dealer Body gets a lil' more "into it" and moves itself up the ladder.  If you were to put a grade on how accomplished dealers are (kindergarten thru masters degree), the entire Dealer Body of 20,000 rooftops is about at 6th grade.

Autotrader and VinSolutions; good for dealers?

Joe - I would argue that more and more dealers are "waking up" digitally every day.  I'm talking to a lot of them and am getting more and more enthusiastic about the future of the digital space in automotive. 

Each of these dealers have individual needs that are tough to satisfy as one solution. 

Autotrader and VinSolutions; good for dealers?

This is all speculation on things that have yet to unfold.  However, it is fun to talk about!

Some of the questions I've had during this acquisition period is how long the innovators are contracted to stay on with their new parent companies?  Traditionally this is a 2 year period.  Knowing there's an end date, does that shape their motivation to continue innovating?  I'm sure they'd publicly say no right now, but that is also too far off in the future to know for sure.

If I were in Matt Watson or Dale Pollack's shoes I'd be thinking of things I'm going to do with my new wealth while also drooling over the prospect of getting my hands on an enormous pool of data.  The prospect of that is HUGE!  Anyone has to appreciate both of those standpoints. 

There is the possibility that bureaucracy will rear its ugly head to stifle the innovation, but that is only a possibility right now. 

We've witnessed these kinds of things happen before.  We've seen it inside and outside automotive.  It is rare that innovation continues as quickly as it once did once the parent company begins to pull strings.  Of all the acquisitions that have happened, my gut tells me this isn't good for the dealer when it comes to getting new "shiny objects" just based on history.  However, it does provide a sense of corporate stability and that has a different kind of value for some dealers.

Autotrader and VinSolutions; good for dealers?

Joe
You are correct that Google can take it's Marketplace model from eCommerce goods and modify it for car leads and not sales, and the entire online classifieds marketplace gets changed forever.  Google would just have to make some commitments to get into the lead generation business for car dealers, like they have for insurance.  They are so close to that now, so I wonder why they haven't pulled the trigger earlier.  The same could be said for real estate advertising.
I also agree that AT wants to diversify their reliance on just classified advertising solutions and get more aligned with dealers as a complete marketing and advertising solution.  This will insulate them from a massive implosion in their centralized classified model.  

If you read the book "What Would Google Do?", you can see a possible connection to AT's desire to spread risk.  Centralized marketing models are being torn down every day; think Blockbuster. 

Autotrader and VinSolutions; good for dealers?

A strong IPO market cannot happen in a weak stock market. LNKD's double is a symptom, not a cause.

I'd like to lobby for the other side, being a publically traded company is not a negative. Take a moment and reflect on Reynolds today. Did going private IMPROVE their business? Not from my seat.  Sure IPO's can create business duds like Vonage, Webvan and eToys. But, these companies were doomed, public or not.

I'll spin this one more way. Not only are there synergies to leverage, but, there are defensive considerations too. My business instincts tell me that AT management has a close enough relationship with Google to see "the winds of change" written all over. AT's roll-up campaign will deversify it's model.

Here's MORE evidence that I came across today:

I'm pounding the table, BIG BIG change is coming our way.

Long: GOOG $526.00

reference: http://forum.dealerrefresh.com/f21/new-spin-autotrader-buy-thon-1394.html

Autotrader and VinSolutions; good for dealers?

BP,

I get the IPO logic, but, IPO or not, these roll ups are smart business.

From the Dealer side (aka Demand)...
#1). The Dealer body is vast and VERY fragmented.
#2). The Dealer body is not technology friendly.
#3). The Dealer Body is being over-run with all of the new media outlets
#4). The Dealer's marketing message is lost in it all.
#5). The Dealer prefers to stay focused on getting cars over the curb
#6). The Dealer needs a small army of specialists to execute the big plan.
#7). The Dealer has no experience in recruiting & training these specialists (in-house).
#8). The Dealer prefers a one call solution to a world they don't understand.

From the "new roll-up family" side (aka de-dupe and leverage synergies)
#1). Sales: Share leads and relationships
#2). Marketing: All parties merge goals to create a New Dealer Solution
#3). Platforms: Gigantic multi-month brainstorming sessions in top management chart out all new synergies
#4). Customer Service: Don't F* it up
#5). Lastly, Leverage it all thru the largest dealer direct sales force on the planet.

Autotrader and VinSolutions; good for dealers?

Since the AutoTrader.com announcement to purchase VinSolutions in mid May, I have been polling dealers and industry leaders on their perspective of the acquisition.

Autotrader-Wall-Street2.jpgSome have said that the consolidation wave in our industry was started when ADP decided to purchase Cobalt.  Some commented that this acquisition marked a new push to provide more value to dealers while other were unsure of what the future would hold.

The commentary that I did not hear is that Autotrader’s buying spree may not deliver anything more significant than an attractive package to roll-up into an IPO.   Could Chip Perry be more focused on creating a shiny IPO apple rather than delivering real value and integration for dealers?

The jury of the automotive community is divided.

If you have not been watching the financial news lately, there is a strong uptick in initial public offerings (IPO).  In fact some have said that the market has IPO fever once again.

With the recent IPO success of LinkedIn, I can guarantee that a wave of new filings and IPO debuts will be scheduled this year.  It’s once again fashionable to be in the IPO game. The small float of shares made available in the LinkedIn IPO created a high demand which resulted in the stock trading over double it’s opening price on its first day of trading.

The LinkedIn IPO, according to popular Mad Money TV host Jim Cramer, was reminiscent of stock market games that got us in trouble with the dot com bubble.  While smaller IPO’s come to market, the granddaddy of IPO’s will surely be Facebook.  This will surely heat up the IPO market and that means spill-over in our industry.

I’ve been told stories of how past acquisitions in the automotive service sector from larger entities resulted in nothing more than a media bubble.  These consolidations lost momentum once the shine was off the apple.    Is the Autotrader buying spree a new breed of roll-up activity?

Only time will tell what the Autotrader acquisition spree of the last 12 months will yield, but I predict they are preparing for an IPO.

Is this good for dealers?  Let’s see how this plays out.

TrueCar, Inc. Announces Partnership with Guthy-Renker

Santa Monica, California (April 5, 2011) – TrueCar, Inc., the automotive industry innovator in new and used car pricing, trends and forecasting, has announced that GR Match, an affiliate of Guthy-Renker LLC, will make a significant equity investment in the company. The seminal partnership will allow TrueCar to give millions more Americans access to truthful, transparent, upfront prices and a no-hassle car buying experience through Guthy-Renker’s highly successful and proven method of targeting, messaging and network strategies to increase awareness of the brand on a mass scale.

“Guthy-Renker believes in TrueCar’s mission, value proposition, and ability to revitalize and transform the auto sales industry – a landscape that currently provides few positive experiences for the consumer and shrinking margins for the retail car dealer,” said Scott Painter, CEO and Founder of TrueCar.

Guthy-Renker will play an integral role in shaping TrueCar’s brand visibility by broadening and amplifying the power of its  reach beyond the internet through the use of TV, print, radio, and other powerful advertising channels.

TrueCar has already helped more than 250,000 consumers save nearly $1 billion dollars on auto purchases, while simultaneously helping its nation-wide network of certified dealers increase velocity and maintaining margins through operational and marketing efficiencies, and a steady stream of in-market customers who are ready to buy.

For dealers who join the TrueCar certified network, the Guthy-Renker partnership opens up the floodgates for exposure to millions of potential car buyers – men, women and families who are in search of a fair price and a positive, no-hassle car buying experience.

“TrueCar offers a paradigm shift for an entire industry.  It is fundamentally changing the way cars are sold,” said Ben Van de Bunt, co-CEO of Guthy-Renker. “We are excited to partner with TrueCar and help them bring transparency and customer empowerment to an industry requiring both.”

TrueCar is poised to move beyond the services provided by traditional websites such as Kelley Blue Book and Edmunds – solutions that have provided a measure of information to car consumers over the years, but have never provided the kind of transparency, accuracy or context of the unbiased data provided by TrueCar.

“The days of lead generation and haggling over price are over,” said Bernie Brenner, Chief Strategy Officer for TrueCar.  “Moving forward, every car buyer in the United States can get a fair deal and a positive experience at the dealership.   It starts with the power of information and continues with real upfront pricing.  We are changing the game for both the dealer and the consumer.”

Brenner continued, “Guthy-Renker understands the art and the science of reaching a wide audience.  We believe this relationship is a once-in-a-lifetime opportunity to take the TrueCar brand national.”

Ford and FordDirect Launch iPad and Smart Phone Optimized Shopping Tool to Virtually Build and Price Ford and Lincoln Vehicles

Ford Motor Company and FordDirect, a joint venture between Ford Motor Company and its franchise dealers, today announced the launch of iPad-optimized versions of the Ford and Lincoln Build and Price online customer shopping tool, specifically designed for the iPad and iPad 2 as well as the iPhone and Android smart phones.

The newly optimized versions of this tool provide iPad and smart phone users with immediate access to the Build and Price feature of the Ford and Lincoln sites, allowing them to virtually build a car from top to bottom, receive a price estimate and find a local dealership that can facilitate the purchase.  Since its launch, the iPad Build and Price and smart phone experience has generated nearly 750 leads per week for Ford Motor Company dealers.

DEARBORN, Mich. June 1, 2011 – Ford Motor Company and FordDirect, a joint venture between Ford Motor Company and its franchise dealers, today launched iPad-optimized versions of the Ford and Lincoln Build and Price online customer shopping tool, specifically designed for the iPad and iPad 2 as well as the iPhone and Android smart phones.  This functionality is available on Ford.com, Lincoln.com and on the FordDirect dealer websites, DealerConnection and DealerConnection Premier Customization Service.

Increasing numbers of auto shoppers are conducting online research before buying a vehicle, and a growing proportion of them are using mobile phones and other wireless devices to price and compare products as they shop.  Now iPad and smart phone users can access the Build and Price feature of the Ford and Lincoln sites, allowing them to virtually build a car from top to bottom, receive a price estimate and find a local dealership that can facilitate the purchase.

When a consumer accesses the Ford.com or Lincoln.com site on an iPad or iPad2, the iPad will automatically launch the iPad-optimized version of the Build and Price pages. The Build and Price feature can be accessed directly on an iPad at t.bp3.ford.com and t.bp3.lincoln.com.

“Our new iPad and smart phone optimized Build and Price features provide consumers with more opportunities to learn about the Ford and Lincoln vehicles they are interested in, whatever their location,” said Stacey Coopes, chief executive officer of FordDirect. “In turn, Ford and Lincoln dealers gain more opportunities to reach consumers and access leads from interested shoppers for Ford and Lincoln dealers.”

Since its launch, the iPad Build and Price and smart phone experience has generated nearly 750 leads per week for Ford Motor Company dealers.

About FordDirect

FordDirect (forddirect.com/dealercenter) is a joint venture between Ford Motor Company and its franchised dealers to create a comprehensive Web presence for dealers and provide digital marketing services that help dealers sell more cars and trucks. Ford dealers sold more than 275,000 new vehicles from FordDirect Internet referrals in 2010. FordDirect provides dealers new and pre-owned marketing services, call tracking, lead management solutions, dealer Websites, search optimization and marketing, database marketing, marketing services for regional dealer advertising groups and other marketing services. FordDirect is headquartered in Dearborn, Mich.

iPad is a trademark of Apple Inc.

HookLogic Appoints David Metter as President, Automotive

Ann Arbor, MI—June 1, 2011—HookLogic announced today that David Metter has been appointed president, automotive with responsibility for a burgeoning business unit focused on solutions for automotive industry clients. In previous roles, Metter served as chief marketing officer for MileOne Automotive, a large dealer group, and as director of sales for Autobase, a leading CRM solutions provider.

“We’ve seen tremendous growth in the automotive vertical with even more potential ahead,” said Jonathan Opdyke, CEO of HookLogic. “David brings an amazing mix of industry expertise, strategic vision and hands-on sales and marketing experience that make him ideal for leading our next phase of growth. Our clients and partners will benefit immensely from his presence. We’re thrilled to have him on board.”

Metter is regarded as one of the foremost experts in the automotive marketing and e-commerce space. He is a frequent speaker at industry events including Digital Dealer, the Global Automotive Conference and JD Power’s Automotive Internet Roundtable.

Metter brings a history of success at both automotive dealers and service providers. He began his career in sales, rising to be one of the top Chrysler salesmen in the country and general manager of a dealership. Later, his sales leadership helped grow Autobase from a small start-up to the leading CRM software vendor in the space.

As Chief Marketing Officer of MileOne Automotive, Metter pioneered the use of many new technologies, including HookLogic, decreasing the dependence on expensive traditional marketing tactics and dramatically improving online advertising results. As a consultant, his strategies have served as a model for dealer marketing and e-commerce departments throughout North America.

“When I first met the team three years ago, I was impressed by their success in the travel and retail verticals with clients like Expedia and Overstock.com,” said Metter. “As one of their first automotive clients, I learned firsthand how well the product works. HookLogic is one of the best returns on investment an automotive marketer will ever see. I’m truly excited to join the team and build out our automotive business.”

About HookLogic’s Solutions for the Automotive Industry: HookLogic powers targeted incentive programs that drive in-market shoppers to auto dealerships and other lead-driven businesses. HookLogic solutions are easily implemented, work with any marketing medium and enable end-to-end reporting and optimization. Headquartered in New York City, the company has offices in Ann Arbor, MI and Manchester, UK. Clients include Lithia Motors, MileOne Automotive, Suzuki, Germain Motor Company, Suburban Collection, and AutoTrader.com. Learn more at www.hooklogic.com/automotive.

Rent a Car From Someone Nearby with Getaround.com

Jeff,

Good stuff. Connecting people with solutions within a niche like this is so easy now.

Along the same lines, except for people needing a place to stay (or have a place to rent) check out Airbnb. Just launched and already has a $1BB market valuation. Airbnb | Vacation rentals, cabins, beach houses, & more

The iPhone app is incredible as well...

Are Your Employees "Coin Operated"?

Selling the benefits of the initiative to the group instead of bitchin' about what isn't working. Good stuff!

How about one on one coaching to reinforce the message?

Oh yeah, that's right....we're selling cars....we don't have any time for one on ones!

But what if it were possible to find 5-10 minutes per day per salesperson to coach them on the 3 top initiatives you're focusing on?

Maybe you could help them sell themselves on the benefits of the initiative. Maybe try SPIN selling. Using Jeff's scenario....

Situation Questions: Mr/Ms sales staff, how many vehicles did you sell over the last quarter? How many of those sales were made to be-back and previous customers? How did the grosses and effort to make the sale compare between fresh walk ins and your follow up based sales once you got them in?

Problem Questions: Do you think you're getting as many follow up based sales as you'd like? How many more would you like to get? How many contacts do you currently average per day with your previous customers and possible be-backs? How many more contacts do you think you'd have to make to get those additional follow up based sales?

Implication Questions:Since you said sales to previous customers and be-backs are easier to make once you get them in, how would you benefit by making more of them? How much more income could those additional sales generate for you? How would you use the extra money?

Need Payoff Questions:So the challenge is getting more be-backs and repeat customers to buy from you and you're interested in anything that will help you accomplish that? What if you were able to increase your email capture rate to 80%, how would that help you? So the resulting 20% increase in sales opportunities would get you closer to your goal? Do you think the dealership marketing on your behalf might help too?

Okay, I know leadership in your dealership might not have time to do even a shortened version of this. You're too busy selling cars to do one on ones with your staff even twice a week.

But why not try? If it doesn't work you can always complain some more then spiff 'em.

Are Your Employees "Coin Operated"?

Mitch - priceless!

Jeff - "da plane, da plane" you're living on fantasy island; not fantasy world. You're an island that has recognized the root of the problem.  You're an island in a world that has shunned responsibility.  And that's enough of the metaphors for today.

I LOVE the article.  If there is a simple take-away for management it is simply to consider what the feature of this thing you're asking your people to do is, and position the sale so that this feature is now a benefit.  It is sales 101.

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