The Portal Puzzle

Many Provider Exchange Network customers have dealer-access “portal” sites.  These sites support electronic rating, contracting, and a variety of other functions.  Providers tell us they’re happy with this approach, and what they really want is DMS integration.  We end up referring these customers to 3PA and RCI.  Along the way, we try to make the case for PEN.

As I wrote recently in P&A Magazine, the purpose of PEN is to transfer data directly between the DMS and the provider’s administrative system, bypassing any intermediate systems.  While we do support a menu system, we connect “behind” it, on the provider side.

Farsighted providers, like Safe-Guard, recognize that their portal is just one tool the dealer might use to sell F&I products.  Indeed, some providers use a web-service approach to support a portal in parallel with multiple menu systems.  Our pitch with PEN is that going direct to the DMS results in a more streamlined process for the dealer.

Upfront Pricing

AutoNation is going to have another try at no-haggle pricing.  This time, I think they will succeed.  I think the market is ready for it.  By coincidence, I had just read Zag’s white paper when Mike Jackson made the announcement.   He was talking about no-haggle in the showroom, but this has important implications for my field, e-commerce.

Zag’s argument is that if you’re the only dealer in town not giving a price on the internet, then you’ll be left behind.  The flip side is that if you’re the only dealer who is doing it, then your competitors can easily undercut you.  The trick is to create a movement in the industry – and AutoNation has the scale to do that.  The article also cites Sonic, Asbury and Lithia.

Mr. Jackson says pricing is the last frontier in auto retail, and this is doubly true on the internet.  It’s the one thing preventing true, business-to-consumer, online F&I.

The Sad History of Disambiguation

Ambiguity is a problem often faced by software designers.  If a program requests a single record from the database, and multiple records meet the criteria, then we have an “ambiguous” result.  The designer must anticipate this possibility, and provide measures to resolve the ambiguity.

I winced the first time I heard the verb “disambiguate,” in December 2002.  I was working at Route One, where one of our dealer identifiers was found to match more than one of Ford’s.  The speaker was R.J. Bussone, and for all I know the coinage was original with him.  The term has since entered common usage, at least among software designers.

At MenuVantage, we found that we could not precisely identify the model of a given Ford Truck from its VIN alone.  The error message “ambiguous model” was despised by our customers, not only because it placed a burden on them to resolve the ambiguity – but also because few car dealers seem to recognize the term.  One called our help desk wanting to know if an “ambiguous” vehicle was one that could run in the water.

MenuVantage is based in Fort Lauderdale, and it happens that tour-bus operators here use amphibious vehicles called “ducks”.

“Look,” I said to our lead developer, Jeremy, “there goes one of those ambiguous vehicles.”

“It is ambiguous,” he replied, “I can’t tell if it’s a truck or a boat!”

Why e-Contracting Doesn’t Work

In the software business, we often blame the customer for not embracing our latest innovation.  This has certainly been the case with e-contracting.  We solved a host of technical problems, from data standards to digital signatures, only to discover – dealers won’t use it.

They have some good reasons.  Laser forms require multiple copies and multiple signatures.  Signature pads cost money and customers don’t trust them.  Laser printers are expensive.  Inkjet printers are cheap enough, but you need one in each office.  Blank paper is $9.00 a ream, compared with contract stock brought in free by agents and field reps.  All things considered, the impact printer works just fine.

This reminds me of when we first put credit applications online.  Dealers already had the perfect solution.  “I go have a smoke while they fill out the app, and then I blast fax five lenders.”  How do you compete with that?

We showed that online credit, combined with automatic approval, closed more deals.  We showed that the internet was cheaper than the fax, and that the system would share data with your DMS.  We also kicked in a $20.00 spiff, as I recall, which we recovered in data entry costs.

Today’s challenge is no different.  Dealers are shrewd enough to know that the benefits of automation accrue mainly to the finance sources and the product providers.  As innovators, it is our job to show what’s in it for them.