If you’ve already gotten used to ordering everything from books to slippers on Am azon, then their next move might not surprise you that much. Recently the mega e-retailer announced its plans to begin selling cars online. While the news has been a surprise to many, the fact is, selling cars isn’t new to Amazon – and they aren’t the only ones looking into their online options.

Amazon has already been selling some cars to smaller markets in Europe. In Italy, Amazon offers a handful of Fiat models and the company is working to build a new company based in Brussels to expand the European market.

Volvo and other online car sales

In the States, Volvo has already experimented with online sales options. In some markets, Volvo, along with a few other companies, have worked with concierge online sales which allow people to go through the entire buying process online. The only contact they have with any dealership is when they meet to take delivery of the car.

It’s a service that has met with some success. Amazon hopes to build on this success by adding test-driving options that make online buying more attractive to reluctant customers.

Customer research by Amazon

Amazon has already launched a customer research portal designed to provide a foundation for its larger launch down the road. They have also been working with Mercedes-Benz and are reportedly exploring different ways to give online customers test drive options. The company is playing close to the vest with their next release and they have not released many details or a firm timeline.

Whatever happens, the public is already excited to see how Amazon will change the way we buy cars and how traditional dealerships will adjust to remain competitive.

Originally published on autoconversion.net.

Last week's news of Authenticom being granted its request from the court for an injunction against CDK and Reynolds and Reynolds to continue accessing dealerships' R&R data management systems to provide the information that dealers and agencies need and have a right to was a BIG WIN for the auto industry. 

Information is power – it’s a truism we all know. But in the 21st Century, access to information is where the real power lies. This point has been illustrated with crystal clarity in the recent CDK / Reynolds & Reynolds lawsuit brought by Authenticom. The public fight between these companies is finally getting its day in court and the first round has made headlines throughout the industry.

CDK and Reynolds & Reynolds handle the vast majority of the data management software sales for the auto industry. CDK alone boasts more than 27,000 retail client locations and is the primary provider of data management systems (DMS) to most of the top US dealer groups.

Reynolds also represents a large portion of the market and bundles DMS solutions with consulting, training and management systems for the entire dealership. Both companies also offer data integration, the combining of separate data to present one, unified view. Simply put, the two companies represent the lion’s share of the data available in the auto marketplace.

When you’re dealing with that much information, you’re also talking about a lot of power.

CDK / Reynolds & Reynolds - The Story

The story begins back in the early 2000s. At that time, the data management system market was developing – and flourishing. Both CDK and Reynolds had come out publicly supporting the idea that data belonged to the dealers.

At the time, Reynolds emphatically stated “The data belongs to the dealers. We all agree on that.” CDK agreed and said they had "always understood that dealerships own their data and enjoy having choices on how best to share and utilize that data with others."

This inclusive and open environment allowed the data integration market to flourish. With more than a dozen providers offering data integration services, the competition kept prices competitive while fostering plenty of innovation in terms of user-friendly software.

But all that began to change in 2007, when Reynolds and Reynolds was acquired by Bob Brockman. At the time, Brockman was the owner of Universal Computer Systems (UCS), a company he founded in 1970. Over three decades he built the company up to become a heavy hitter in the world of automotive services. When he headed up the acquisition of Reynolds and Reynolds, people expected a change – and Brockman delivered.

Almost immediately, Reynolds began restricting who could access the data their system had. Other data integrators found themselves with their credentials yanked and a wall built between them and the data they needed to deliver results to their own clients. It was a complete about face from the position of Reynolds just a few years ago, and the dawn of a new age when it came to data integration.

In a somewhat niche field like the auto industry, the actions of Reynolds and Reynolds effectively cut off nearly half of the available data to other integration service providers. Over the next few years, this tug of war over access to information effectively killed off much of the competition.

But even as Reynolds was limiting the flow of data, they were placing a higher premium on the data they alone could provide. Fees to access their data climbed to almost staggering numbers, with some dealerships coughing up $150,000 or more every year simply to access and manage their data.

Meanwhile, their stranglehold was about to become even stronger. While the number of players was dwindling in the field, Reynolds clearly wanted to narrow things even further. According to the story laid out in Authenticom’s Complaint, in February of 2015 Reynolds and Reynolds reached out to CDK to strike a deal.

The two teamed up to freeze out everyone else. They would attack, undermine and thwart the efforts of everyone else in the market, ultimately leaving the two companies to reap the full rewards of a niche – but lucrative – market. Not only would this plan leave the entire market theirs for the taking, it would allow them to set any price they wanted. They would control ALL of the information – meaning they could charge whatever they wanted for it and dealerships would have to fall in line.

Since then, the companies have controlled the data integration system world with an iron fist. It became the Nasty Little Secret everyone knew about. As companies fell by the wayside, turning their focus to another area of service or simply going under, the pressure was turned up on the competitors that remained.

A Problem (Not Just) for Authenticom

One such competitor was Authenticom, headed up by President and CEO Steve Cottrell, who was another well-known player in the automotive data industry. With more than three decades of experience in the industry, he had spent 15 years building Authenticom into an impressive and well-respected company.

During that time he managed to grow their revenue from $3.7 million to $20 million in under 5 years. In 2015, the company was saluted by President Obama as "one of America’s own fastest-growing private companies”, so his efforts were clearly paying off.

Until, he says, CDK and Reynolds decided there wasn’t enough room for all of them. Authenticom, like other rivals, felt the pinch of CDK and Reynolds’ attempts to prevent data integration companies from accessing their data.

Read the full story on DealerRefresh.

When Uber first appeared on the scene, skeptics were quick to point out how easily the company could fail.  An army of freelance, casual workers putting in time whenever they felt like it and customers willing to trust a smartphone app with payment and location information?  It seemed like a set-up positively doomed for failure.

The rise of Uber

But, despite the naysayers, Uber taxi flourished and inspired its biggest competitor, Lyft, as well as a slew of start-up services and Uber-inspired on-demand apps.  They also inspired a national conversation on how freeing – and how confining – freelance can be, for Uber drivers.    The company effectively changed the landscape of personal transportation – empowering freelance drivers and giving people more choices when it came to getting from Point A to Point B.  In many ways, they have been held up as the ideal start-up: a simple idea that filled a need and became part of our pop culture.

But, although Uber offered creative insight into new ways of organizing workers and creating custom services; their marketing and public relations disasters have shown how bad press can undermine even the best business plan.

Uber CEO mishaps

In December 2016, Uber’s CEO Travis Kalanick was tapped to join President Trump’s economic advisory council.  This put him and, by extension, all of Uber under greater scrutiny.   What followed was a series of public mishaps which have led to Kalanick’s recent announcement that he was “taking a leave of absence” from the company.

Shortly after his appointment, the President’s travel ban was announced.  Taxi drivers in New York went on strike as a protest and the NY Taxi Workers Alliance called for drivers to refuse pickups from the airport.  During the protest, Uber sent out a tweet about turning off surge pricing for customers requesting pickups from JFK.  The backlash was almost immediate, with critics slamming the company for taking advantage of the situation.  In the end, Kalanick came out publicly against the ban, resigned from the President’s Council and committed millions in legal aid to immigrants.  But by then, #DeleteU ber was already trending and the damage had been done.

Uber accused of pervasive culture of sexism within the company

In February, Susan Fowler published a piece on her blog about her experiences as an engineer with Uber.  In the piece, titled “Reflecting on One Very Strange Year at Uber” she openly discussed the sexual harassment she claims to have dealt with at the company as well as the HR department’s refusal to follow up on her complaints, which included chat messages from her boss about looking for someone to join him and his wife in a threesome.  The post was shared widely and did become the driving force behind investigations into the Uber company, which led to the firing of more than 20 people.

In March, it was reported that Kalanick and a group of fellow executives had visited an escort bar while on a trip to South Korea.  One of the executives was a woman from Uber’s marketing department who later complained to HR that being stuck in the bar with the men calling out numbers for escorts made her feel uncomfortable.  At one point she reported to HR that  “It made me feel horrible as a girl (seeing those girls with number tags and being called out is really degrading).”

Doing what they could to work it out

Many times, Uber tried to remedy the situation publicly.  Presumably, this was to assure the public that even though the Uber corporate culture might be rough around the edges, they were doing what they could to work it out.  After the slew of sexual harassment allegations, that had levied against them, the company hired high-profile women like Apple exec Bozoma Saint John and Professor Frances Frei, author of Uncommon Service: How to Win by Putting Customers at the Core of Your Business.

But for every step they took publicly, there were new scandals waiting in the wings to reveal the Uber need for lessons in reputation. A leaked email from Kalanick ultimately illustrated the ‘frat house’ culture better than any allegations being touted by former employees and customers who had filed complaints about sexual assaults from Uber drivers.  Kalanick’s email consisted of warning about a ‘puking surcharge’ for employees who partied too hard and a reminder not to throw kegs off of “tall buildings”.

Is Uber doomed or will it survive?

In the end, Uber may not survive.  If it doesn’t, the company’s demise will have been brought about – not by problematic business decisions, but instead by a string of PR debacles and their own corporate culture, which has been described as toxic by many.  But even if their efforts prove to be too little too late to save the company, Uber will leave a lasting legacy for entrepreneurs looking to capitalize on the growing service industry as well as providing a real-world example of just how important – and powerful – a company’s reputation can affect its future.

Originally Published on AutoConversion - Is Uber Doomed to Fail?

While all dealers take in vehicle trades, more savvy dealers these days are proactively seeking vehicles from private sellers. At first look you might find that the average used car manager believes that buying cars from consumers is not worth the hassle, but after diving deeper into why dealers shy away from this more profitable approach to vehicle acquisition, I believe I've come across a less obvious factor - some used car managers love their auctions.

At a recent private dealer summit I attended for owners and operators deeply involved with the used car business of their dealerships, several attendees commented on the reality of how often they discover their wholesale buyers and used car managers being so attached to acquiring vehicles at auctions that they reject the idea of a more profitable approach that doesn’t involve going to the auction.

Many used car managers I speak with are preoccupied with brokering deals and moving metal. They don’t have time to be on a computer for vehicle listings from private sellers. They do however have a day or two dedicated each week for the auction.

Typically this involves leaving the dealership for an early lunch, getting themselves to and from the auction, often with fellow dealer cohorts, and working their way back to the dealership for an hour or so more. When I talk with those that frequent the auctions, their interest level in moving away from them is often low and seldom a priority.

Disrupt Old Practices

Used Car Operations expert Ed French was recently quoted as stating that, “Margin compression in used car operations means dealers must disrupt old practices that result in high vehicle acquisition costs and slow time-to-market speed.”

One way to improve acquisition volume and vehicle quality is to source inventory internally. This means not only sourcing trade-ins from existing customers and service lane customers, but also proactively buying cars from consumers.

Internally sourced units save auction fees and transportation costs, an average gross savings of $600 to $800. These vehicles are typically newer with mileage lower than auction candidates and they don’t need as much reconditioning so they’re frontline ready faster.

Simply put, buying from consumers is more profitable. This isn’t to say dealers shouldn’t use auctions, but if you’re attached to them for the wrong reasons and turning away from alternative ways to stock used vehicles then there’s a good chance you’re unnecessarily eating up your dealer profit.

Each and every day hundreds of people, if not thousands, are visiting your dealership website. While many people reach your website as a result of clicking on links from emails you send, ads you run, social media posts, etc....practically speaking a majority of people arrive as a result of searching your dealership name on Google.

Of the thousands that decide to click on a search result and visit your website, how many hundreds do NOT do this? Why do they overlook you and eliminate your dealership, and how valuable could they have been for you?

Phrased differently, how much potential business are you NOT acquiring as a result of cracks in your online presence, and how much is this costing you?

What Are the Losses?

Considering that each dealership customer is potentially worth a million bucks over a lifetime between the business they bring you directly and refer, the loss of potential business is significant. Even if only 1-3% of website visitors convert into incremental sales and service business immediately that doesn't mean the remaining 95%-plus have no value.

If you could make improvements to your online dealership presence that reduce the "lost potential traffic" by say 25% and get these people onto your website, how would this impact your bottom line and improve your ROI?

Reality is, there’s no way to know how much potential business you are losing because there’s no way to know how many people overlooked or eliminated your dealership. You only know how many are considering you.

Here’s What we Do Know

We know that low ratings on review sites cause people to eliminate your dealership. When you search a dealership name on Google and append the words, “dealership reviews” Google shows all the stars, ratings, and number of reviews on relevant sites such as Facebook, Yelp, DealerRater, Cars.com, Edmunds, and of course Google itself.

We know that people overlook you when they don’t like what they see.

We know that people click on these links which means they see what your profiles and listings look like. They see what your Facebook page looks like, they see what your Yelp listing looks like, they see what your YouTube channel and LinkedIn page looks like.

We know that you only have a few seconds to make a good first impression and if you don’t then you get eliminated.

So while you’re busy launching the next marketing campaign or ad initiative, spending tens of thousands a month to get your dealership front and center with folks to go online and research you and your online presence is not buttoned up, how many ad dollars are going down the drain don’t have to be?

Shopper Consideration Assessments

Unlike Mystery Shopping that puts your process and your people to the test, a Shopper Consideration Assessment puts your online presence to the test. An assessment that scrutinizes your dealership from the initial phase of the shopper’s consideration journey where you know you are being eliminated is a simple and practical test you can and should be running your dealership through at least twice a year if not every quarter.

One challenge with shopper consideration assessments is that they are difficult to do objectively because they can make the people responsible for your online presence at the dealership look bad. Nobody likes that. This is why it’s best to have a third party perform these types of assessments.

Another challenge with shopper consideration assessments are that you can’t have vendors performing them when the vendors themselves have stake in the performance of your online presence. They don’t want evidence pointing to them that they are the cause for cracks in your presence.

A final challenge with this type of assessment is while your dealership presence might look good on paper, you have no way of knowing how it compares with others. A dealership with 500 reviews on DealerRater and a 4.9 rating, but lacking reviews elsewhere does not fool the savvy shopper comparing that dealership to one with a balance of reviews and ratings across multiple sites.

Standing Out Above the Competition - It's a Numbers Game

I’ve been performing shopper consideration assessments for more than three years now. During this time I’ve accumulated data on hundreds of dealerships and even devised my own proprietary scoring system. You’d be amazed how low-performing the average dealership is in these areas, and what little effort it takes to stand out above the competition.

To give you an idea of the numbers, the social media portion of my assessments evaluates dealerships on Facebook, YouTube, and LinkedIn and is based on a potential high score of 19. Of those 19 points, Facebook is worth up to 10, YouTube up to 6, and LinkedIn up to 3.

Most dealers score between 4-6 points on Facebook, 1-2 on YouTube, and 0-1 on LinkedIn. The average overall score for social media fluctuates between 4 and 5 points.

So consider this...the dealers that take action on the areas keeping their score down can almost immediately place themselves in the Top 25% of dealerships when it comes to social media.

How long are you willing to wait before you stop the leaking from your online presence and improve your ROI?

Making a profit in the used car business is increasingly more challenging. With consumers becoming smarter and having access to more information, plus more options, it seems the only way for dealers to remain competitive and profitable is to change their mindset.

Used car managers understand that the faster you turn your inventory, the more profit there is to be made. When you design your profit strategy around this fact, you stop looking at profit on a per-vehicle basis, and instead realize the bigger picture.

Finding the vehicles you want and achieving a faster turn with a higher gross begins with acquisition, not liquidation. The more quickly you find the vehicles you know you can sell retail, and of course the less you pay for them is the first step towards greater profit. I think it goes without saying that dealer auctions don’t help achieve your profitable acquisition goals.

When you're trying to keep your pre-owned lot stocked with high-quality, in-demand vehicles, dealing with auctions can be a costly and time-consuming process. For one, you have to wade through a range of vehicles that don't meet your needs before finding the right model, in the right year, with the right options. You also risk having your price bid up by competing dealers.

Private party listings are today’s best alternatives to stocking your lot and reducing your expenses. As many dealers already agree, buying used cars from consumers is more profitable compared with auctions and even vehicle trades. By going straight to the source, you acquire vehicles directly from private sellers in your target market, and with lower acquisition costs.

Many dealers balk at the idea of negotiating an acquisition from a consumer not committed to buying from them. They find it difficult and often a waste of time. But this is an obstacle that can and needs to be overcome with proper training and coaching, because your profit lies on the other side of this hurdle.

There are numerous examples of dealers maximizing profit potential through used cars. Not just independent dealers but franchise dealers too, often creating satellite stores or buy centers that make it easier for consumers to sell their vehicles and more cost-effective for dealers to obtain metal.

By adapting to this mindset, dealers will realize a fundamental shift in their business models that leads to higher profits.

Questions...

What are you doing to acquire the vehicles you need? Do you have a buy center? Do you search for vehicles online listed by private sellers?

Do you evaluate used car profit on a per-unit basis or on your strategy as a whole?

Are you using online or physcial dealer auctions?

With more advertising channels comes more ways to reach potential consumers, but also more complicated analysis to determine if your investment is working. Effectively, your ability to attribute sales to specific marketing initiatives has evolved, but so too have the intricacies.

So where should savvy marketers start?

In marketing, attribution means the tracking of your marketing investment through each stage of path-to-purchase from creating awareness to driving traffic to close. Attribution allows you to understand which elements of your marketing mix were involved in the purchase decision process, and ideally, which were the most effective.

The role that attribution plays today and in the future is evolving rapidly as more sophisticated data becomes available and able to be interpreted and acted on more intelligently.

As an example, consumers now expect and respond better to messaging that is better customized to them personally, thus customization has become a key measurable characteristic with marketing attribution, an idea unimagined only a few years ago.

Others include…

• Implementing a streamlined form-fill process on all devices in conjunction with responsive design
• Consumer experience plays a significant role in the attribution process
• Attribution is more accurately measured when conversion is streamlined via e-mail or text message delivery

The better you’re able to understand your consumers and address their needs and wants (both from an information and product perspective), the more you’ll earn their trust.

I'm curious to know what are some tools and technologies that either your dealership or agency are using to "attribute" vehicle sales to specific marketing dollars?

Most companies know that investing in Facebook advertising is a worthwhile way to spend part of their marketing budget.  But for those in the auto industry, the gap between them and their customers is hard to overcome.  Using ads within Facebook can offer some help, but making a real connection has proven more difficult.

The general rule of thumb is that the longer a person stays engaged with a dealership using a web-based app or interacting with the website, the more likely they are to reach out to that dealership.  So how can they get customers more engaged?

ImpactWare, an advertising and marketing firm, thinks it has the answer.  They worked with DataOne to create an interactive application that gives customers information on the care and value of their car while giving dealerships information on who’s using the website and sales leads.

Connecting with customers on social media is no easy task.  Facebooks Ads can be helpful, but making a connection goes a lot further.  Programs such as the one developed by ImpactWare may hold the key to bridging that gap.  At the same time, they give dealerships what they need – a way to engage with customers quickly and easily, creating a greater ROI in an increasingly competitive market.

Read the full version of this article here.