In 1997, on the NADA exposition floor, my father and I became a “franchised” Autobytel dealer for the Ford brand in Kentucky.  We already had a website so this was our next logical step.  There was no Google, Yahoo, Bing or YouTube.  Mark Zuckerberg was only 13 years old and Facebook wouldn’t be around for another 7 years.  No one was Yelping or DealerRating online about our products and services and the Automotive eTailing future was really intriguing for cutting edge dealerships.

Our Autobytel marketplace for Ford was border to border.  We were convinced owning this piece of the Internet marketplace was essential to our Dot Com strategy even though we didn’t now what our Dot Com strategy was as a dealership.  Candidly, we didn’t really know what Dot Com meant.  Our original website from 1996 is fun to remember…no inventory and just a few pictures and descriptions of our dealership.  It took about 3 minutes to load using dial up modems but at the time it was really cutting edge.

Our dealership, like many others at the time, participated in an Internet land grab not realizing that the territory was infinite.  We assumed that there was a defined layout and, much like the real world, that the opportunities would be limited and that we needed to act before someone else took the market.  Little did we know that Autobytel was just the beginning and that the Automotive Internet Marketplace would go through multiple iterations over the next 15 years and change would remain constant.

In the late 90’s, dealerships were investing heavily in hardware and software at a remarkable rate with little or no return.  There were no CRM’s as we know them today in place at dealerships.  Most of us had salespeople working out of plastic card boxes where prospect and customer data was compiled on 4x6 cards.  The data was written with extra care so we knew birthday’s, spouse names, kids names, likes, dislikes, nuances, etc. to enhance our opportunity to build owner loyalty.  If we needed to drum up business, we would take our card boxes out and call and handwrite letters to our previous customers.  If only we kept up these same great habits when we went electronic with our CRM’s.  Very little is known about our customers and prospects today even though it would seem even easier to keep track of them.  I sometimes pine for the days where we truly knew our customer wants and needs because that’s what it took to drive sales and owner loyalty.

When our dealership started using the Autobytel Lead Management Tool with our dial up connection, you could literally hit send on an email and go get a cup of coffee and it would still be sending the message when you got back.  Things were so slow compared to today but they were extra fast compared to postal mail so we thought it was cool.  There were no email blasts because we didn’t have the capacity and spam was essentially unheard of. 

Roll the clock forward to 2012 and you realize how smart it was for dealers to invest heavily on the Internet because, if we hadn’t, we wouldn’t have the results we have today.  Back in the late 90’s, a lot of dealers felt customers would be buying cars direct online and that the franchise system would be dismantled in favor of customers buying from the factory.  The investments made then became the foundation for what we enjoy now. 

If CarsDirect, CarOrder, Carpoint (Microsoft) and even Priceline hadn’t pushed dealers so hard competitively, we may not be the savvy group we are today.  All of these business models provided the threat to the Dealer Franchise system to motivate us to create sustainable online retailing models that allowed dealers to survive then and nowadays thrive.  With ~90% of customers using the Internet at some point in the car buying process, we all benefit from this early investment.

I can speak firsthand that this challenge motivated Ford’s 2000 Dealer Council to create FordDirect.com.  Ford dealers joined Ford Motor Company to create this unique joint venture where we leveraged Ford’s marketing dollars and dealer’s inventory to offer customers something they never had before.  Leo Hillock, a Florida Ford Dealer and Executive VP of Dealer Relations at FordDirect, had an exceptional idea and he and his fellow Ford dealer’s ran with it.  I traveled state to state to gain the perspective and support of state dealer associations before we launched in New Jersey (under the guidance of NJCar’s Jim Appleton) with a handful of brave dealers.  As a result, the Ford dealer buy-in was strong since it was their own company and their association execs understood and felt it was beneficial.  This would have been a good path for Zag/TrueCar to take when they launched.  

The threat for dealers in the late 90’s was concern for being surpassed by outside challenges to the franchise system, as well as innovative marketers.  The threat today is dealer apathy and resistance to remain focused on the customer experience.  We used to look at our competitors across the street and mimic their actions in our sales and marketing strategies.  Today, we simply browse their websites and click around to see where they list their vehicles to ensure we stay in the game.  We should stop looking at our competitors and start looking at leading online retailers.

Today’s customer wants more and they are voting with their dollars.  It’s been too many years since dealers were truly innovative and took a risk in the Automotive Internet Marketplace.  It’s a good time to consider your own strategy and the safest bet is to side with the customer experience.  Customers love the Internet and especially love Mobile.  In fact, it’s a common occurrence for a customer to be in your showroom and be submitting a request at your competitor’s dealership for pricing while you are actively working a deal for them.   Dealer’s have got to respond with some cool and convenient updates to make it easier for customers to self serve and compete the car buying process with as little effort as possible. 

A friend of mine described his car buying experience with a national used vehicle retailer this way…”It was like going to the grocery store.  I was able to shop online, talk with the salesperson, they brought it from another location and it took about 40 minutes for me to complete the paperwork at the dealership”.  We see dealerships promote “buy in an hour” and I really think that’s what we need to strive for.  We’ve seen so many great gains in Automotive eTailing to this point.  In my opinion, the next frontier will be driven by the dealers who redefine and easy experience for the customer by leveraging the mobile devices to simplify the process for customers and salespeople.  Imagine a customer signing their agreement on your salesperson’s iPad and driving home in less than an hour.  Someone’s going to figure it out.  Might as well be you.

Hope you enjoyed this look back on Automotive eTailing.  It’s been fun remembering what those early days were like and considering the possibilities for the future.  If I can ever be of service, please let me know.

David Kain

President, KainAutomotive.com

859-533-2626 cell/text

david@kainautomotive.com

www.KainAutomotive.com