Car Search Aggregation

I was rereading Professor Rogers’ book and I had this brainstorm that somebody should develop an aggregator site to sit on top of digitally-enabled car dealers, the way Kayak does for airlines.  It could scrape all the listings into one vehicle-search page, aided perhaps by a standardized listing API. 

It turns out I am not the first one to have this idea, but the research was interesting.

First, we have to make a distinction between providing a lead and selling the car.  This is not always easy, because few customers require full digital retail, and most lead providers have some limited DR capability.  Still, this distinction is important to an aggregator:

To make said distinction, imagine the dealer in this diagram has a DR system and also uses a third-party classified site.  If you are a DR skeptic, imagine this is Carvana (or CarMax) with their own integrated car-selling site. 

I am using a thin line for leads and a thick line for deals.  This notation helps to show that the Kayak site should only connect to DR-capable dealers.  Otherwise, it’s lead provider on top of lead provider, with no added value.

Once a platform is widely established in its category, it is extremely hard to launch a direct challenger with a similar service – David Rogers

Here, I am just doing what any good futurist does – working backward from the goal state.  What the market wants is a single place to shop, like Amazon.  Rogers would call this a “platform,” and network effects says it’s a winner-take-all business.  There can be only one. 

Once you recognize this three-layer model, you can infer all sorts of fun things.  Like, suppose Carvana (or CarMax) decided to open up their DR capability to other dealers.  These would be certified and operationally compatible dealers, whose inventory Carvana could sell for a commission.  I’ll leave it to you to negotiate who earns the F&I gross:

I have been writing about digital retail for a few years now, speculating on how the goal state would be achieved.  Note that “DR aggregation” on the left side of the diagram, and “platform aggregation” on the right, correspond to the two vectors I described here.  

I have long advocated platform sites adding DR capability, as some are doing now.  This brings us to an interesting piece of history.  Airline booking sites Orbitz and Kayak were founded by the same guy, Steve Hafner, in that order:

Initially, Hafner undertook what we would call the DR piece, while Kayak opted to be simply an aggregated lead provider.  I still think it’s a good idea for listing sites to develop DR features, but history suggests the TrueCar approach – linking up with Roadster – is the correct one.

My Shift in the Call Centre

A User Story

I enter the PCI compliant cleanroom at eleven o’clock with only a quinoa bowl from Freshie’s, and log in to Salesforce on my locked down computer.  No cell phone, no scratch paper – and there are cameras.  I wave to Peter on Camera #1 and start to dial.  I do not have high hopes of reaching anyone in the middle of the workday.  Amid all the DNRs, I may catch an inbound call off of our direct mail campaign, or someone out on the floor may catch it while I am dialing.

I log in to the dialer and it presents my first call.  To save time, I hit “dial” and the phone rings while I paste the number into Salesforce and search for the Opportunity.  Our Cisco dialer has a predictive mode, but I am not using it.  For low volumes, preview dialing is supposed to be a better experience.  The Ministry of Commerce prefers it, too.  This number is guaranteed to be in Salesforce, with a prospect status, because the dialer file is generated nightly from the Opportunity table in Salesforce. 

Bonjour et félicitations pour votre achat d’un véhicule Nissan

My first call goes to voicemail, which is par for the course.  I recite the voicemail script, which I know by heart, and log the status in Salesforce.  I really wish the dialer could leave that damned message on its own.  I must recite it a hundred times a day.  I will dial this number three times before dropping it from the file, spread over a two-week period, in case my prospect is away on vacation.  Salesforce applies this business logic when it generates the dialer file. 

For the next few hours, I get voicemail, no answer, not interested, and never call me again, which I duly note in Salesforce.  This last category will be added to the phone number filtering logic, along with the Do Not Call list we purchased from the Ministry.  I recognize the next number.  Merde!  It’s Dave Duncan.  I try to cancel the call, but too late.

Dave proceeds to grill me about my affiliation with Nissan.  No, I do not work for your local dealer.  If I did, we would have an “existing business relationship” and we wouldn’t have to honor the DNC list.  No, I do not work for the factory, its captive, nor the captive’s department of protection products – but we are the one and only factory authorized direct marketer of said products.  That’s why it’s their number on your Caller ID. 

By six o’clock, I have a live prospect.  I alt-tab to my SPP system, which allows me to quote rates as well as set up a payment plan.  I also have a custom Product object in Salesforce which connects to the rating API, but I find it easier to work in SPP because most customers will want a payment plan anyway.  SPP calls the same API. 

Things are going well until my prospect insists upon seeing the contract.  I recite the talk track about cancellation and full refund within thirty days, but to no avail.  I can also email a specimen contract and we can review it right now while he’s on the line (better odds of closing).  I end up emailing a custom link, or PURL, from SPP that will open right to the rates and contract we discussed. 

I flag this one for callback in a few days.  It’s possible he will self-close on the SPP site, and then Salesforce will close the Opportunity automatically when it receives the file from SPP.  In any case, I now have an email address we can use for the next digital marketing campaign.  Speaking of digital marketing, whenever a voicemail greeting begins, “the Rogers mobile customer you’ve dialed,” I flag those as numbers to which the digital team can send text. 

My next prospect, I actually close on the call.  I am sitting in this fakakta cleanroom just in case I have to handle credit card information which, at last, I do.  My guy buys a 72-month plan, which I set up for 24 monthly payments on SPP.  Then, I download both contracts – the protection plan and the payment plan – and attach them to the Opportunity. 

Salesforce won’t close the Opportunity, though, for another day until it receives confirmation from SPP that all is well with the credit card.  If not, it will indicate that status, send an email, and I will have to call him back.  Once the Opportunity does close, as a win, Salesforce Connector will pick it up and Marketing Cloud will include both contracts in a direct mail welcome package, ending the Customer Journey. 

So, to summarize my workflow, I am manually pasting phone numbers into Salesforce and VINs into SPP.  Salesforce and SPP are each capable of rating and contracting via API, and the customer can check out with or without my assistance.  These tasks could be improved with some Computer Telephony Integration and an SPP interface.  Instead of sending data directly to SPP, all I really need is the logic to generate that PURL and then Salesforce could either launch it for me or send it to the customer as needed. 

At eight o’clock, the end of my shift, I doff my headset and run the job to generate tomorrow’s dialer file.  This is basically a query against the Opportunity table, applying the “next date to call” rules.  Without CTI, the best time to call is not supported.  Jeanette will have to pick those out of the comments manually.  Tomorrow is my day off. 

Top Digital Retail Systems

I have been writing about Digital Retail for several years now.  Keeping tabs on the players was part of my job at Safe-Guard, and people still call for my notes.  Since I am moving on to a new venture, I figured I would simply publish the list.

First, some notes about the category.  I split out online car dealers, TPC platforms, and finance-first sites.  Obviously, CarMax is omnichannel, but they’re not a software vendor.  My definition of a digital storefront is given here, and I differentiate then from TPC sites here

Anybody with a foothold in the dealer’s website is using it to pivot into digital retail.

The “pivoter” category from this last article is especially relevant, as more and more vendors transition into the space and flesh out their offerings.  Finance-first sites are those, like Rodo and AutoGravity, where customers go for finance and then turn over to a dealer.

List of Automotive Digital Retail Vendors

  • Roadster – Roadster’s Express Storefront was the first to use the “plug-in” delivery strategy.  They are in some very innovative dealers, like Paragon and Galpin. 
  • TagRail – Similar to Roadster.  My pal Kiran using analytics as a differentiator.  Now owned by digital marketing firm Fox.  I wrote about DR and Marketing tie-ups in my survey, DR and Dealer Websites.
  • MotoInsight – I did an OEM project with Moto, and visited their offices in Toronto.  I like the team, and what I especially like is the idea that dealers will use the same system instore that the customer uses online.  I profiled them here.
  • Gubagoo – Gubagoo started as a chat engine, and has now developed a DR solution called Clicklane for Asbury Automotive. Lithia also has a branded DR offering, called Driveway.
  • Modal – Formerly Drive, from serial entrepreneur Aaron Krane.  I cited Krane and Roadster CEO Andy Moss, here, as examples of “disrupters” from outside the industry.  Modal has recently inked a deal with Honda, and raised $15 million in funding.
  • CarNow – Another entrant from the chat space, I was surprised to discover so many dealers using CarNow’s BuyNow plug-in.  It seems to be especially popular on Dealer.com sites.
  • AutoFi – AutoFi expanded successfully from a finance plug-in to full DR with Express Checkout, used by a number of dealers including Ricart Ford.
  • Darwin – Darwin is unique in having pivoted to DR from an instore system.  They’re at Herb Chambers, branded as Smart Buy, and also my local Atlanta dealer, Jim Ellis. 
  • Digital Motors – This is a very new entrant (2020) but a strong team including Andy Hinrichs, formerly of AutoGravity.
  • Dealer eProcess – Getting DR from your website provider seems like a good idea, buy my survey found few instances of it.  Others in this category are Dealer Fire and Dealer Inspire.
  • Make My Deal – MMD is gone now, folded into Accelerate and attached to DDC.  So, it’s in the dealer website category, not a storefront.

Sorry if I missed anyone.  New entrants pop up every day.  I would say that the space is becoming crowded, but there are still thousands of unserved dealers.  Follow my Twitter feed, @ViragConsulting and the #DigitalRetail tag, for regular updates. 

Direct to Consumer VSC Sales

Direct to consumer (D2C) service contract sales can be divided into two broad categories: with and without dealer consent.  This, along with the lifecycle “touchpoint,” determines the choice of tactics. Today’s post will discuss the state of the art for dealer-driven D2C selling.

Direct-to-consumer marketers price VSCs to absorb high cancellation rates and can generate margins in excess of 25% – Gina Cocking

Outfits like Car Shield market directly to consumers using their own advertising and their own lead lists.  These are generally brokers, selling service contracts from their chosen administrators, outside the dealer process.  Car Chex does this, and also does marketing for dealers.  Endurance, whose ads you may have seen on television, is actually an administrator.  On the dealer side, obviously, D2C marketers will offer whatever service contract is sold in the dealership.  The leaders here are APC and Dialog Direct.

The traditional tactics are telemarketing and direct mail, but there are some exciting new entrants.  The image above is from Tec Assured.  Their 2-8-28 contact program uses a combination of digital and phone messages directing the customer to a branded website.  The site handles credit cards and premium finance.  Instead of a call center, Tec Assured leverages the dealer’s BDC.

So, the ideal approach would be some Hegelian synthesis of the old and the new.  First, though, let’s talk about touchpoints:

  1. Second chance – this is around thirty days after the vehicle purchase, and the talk track is something like, “hope you’re enjoying the new car, and you forgot to buy a service contract.”
  2. Warranty expiration – this is a few months before the factory warranty expires. A postcard is traditional.  Directing the customer to your website, via digital marketing, is more modern.
  3. Service visit – dealers have the inside track here, because they can follow up a service visit with something like, “lucky thing that repair was covered.”

Thinking about these touchpoints, you can see the power of adding digital tactics to traditional D2C marketing.  You may also have noticed the eligibility issue and the financing issue, because the sale is happening outside the dealership and after vehicle purchase.

Servicecontract.com offers monthly subscription pricing, which may begin during the factory warranty period.  This means the customer is paying in advance for coverage that hasn’t started yet.  On the other hand, if the factory warranty is expired, then they require an inspection at Pep Boys or a 30-day waiting period.

Financing is key.  No one is going to buy a $2,000 service contract on their credit card.  This is why Dialog Direct is affiliated with Budco, a well-known premium finance provider.  APC also has a financing arm.  Servicecontract.com is essentially an innovative form of premium finance.

In my experience, the hardest piece to build is the call center and support infrastructure.  Whoever handles the finance contract has to support accounting, cancellations, and customer service.  Even if you’re not doing telemarketing, you still need a call center.

Digital marketing means using email, text, social, and retargeting to direct the customer to your website, following a contact program like Tec Assured.  As a Salesforce trailblazer, I would call this a “customer journey.”  The journey should be driven by some analytics, and culminate in the customer clicking a Personalized URL that links to the website.  The journey can also include phone contact and direct mail.

The website can change its skin to match the dealer’s branding, based on the PURL.  When I was at MenuVantage, we supported a dozen different brands, like GMAC’s IntelliMenu, all from a single code base.  The site UX will include the usual shopping and checkout features, along with sales tools like testimonials and TCO data – not unlike an F&I menu system.

Also like a menu system, the website must be able to originate contracts via API for whatever product provider the dealer chooses.  See my various posts on this topic, as here and here.

This is classic digital transformation.  The challengers bring new tactics, and these tactics will certainly become the norm.  The incumbents are well entrenched, though, and tactics can be copied.